PROBLEM 3-4B
(a)
Equivalent Units
Physical
Units
Materials
Units to be accounted for
Work in process, October 1
Started into production
Total units
Units accounted for
Transferred out
Work in process, October 31
Total units
25,000
435,000
460,000
425,000
35,000
460,000
425,000
35,000
460,000
*35,000 X 40%
Beginning work in
process
Added during month
Total
Equivalent units
Cost per unit
Materials cost
$ 29,000
1,006,000
$1,035,000
460,000
$2.25
Conversion costs
$ 16,500
246,900
$263,400
439,000
$.60
($138,900 + $108,000)
(b)
Costs accounted for
Transferred out (425,000 X $2.85)
Work in process, October 31
Materials (35,000 X $2.25)
Conversion costs (14,000 X $.60)
Total costs
$78,750
8,400
PROBLEM 3-4B (Continued)
(c) LUXMAN COMPANY
Assembly Department
Production Cost Report
For the Month Ended October 31, 2014
Equivalent Units
Quantities
Physical
Units
Materials
Conversion
Costs
(Step 1)
(Step 2)
Units to be accounted for
Work in process, October 1
Started into production
Total units
Units accounted for
Transferred out
25,000
435,000
460,000
425,000
425,000
425,000
Work in process, October 31
35,000
35,000
14,000
(35,000 X 40%)
Total units
460,000
460,000
439,000
Costs
Materials
Conversion
Costs
Total
Unit costs (Step 3)
Total cost
Equivalent units
Unit costs (a) ÷ (b)
Costs to be accounted for
Work in process, October 1
Started into production
Total costs
(a)
(b)
$1,035,000
460,000
$2.25
$263,400
439,000
$.60
$1,298,400
$2.85
$ 45,500
1,252,900
$1,298,400
Cost Reconciliation Schedule (Step 4)
Costs accounted for
Transferred out (425,000 X $2.85)
Work in process, October 31
Materials (35,000 X $2.25)
Conversion costs (14,000 X $.60)
Total costs
$78,750
8,400
$1,211,250
87,150
$1,298,400
PROBLEM 3-5B
(a)
(1)
Equivalent Units
Physical
Units
Materials
Conversion
Costs
Units to be accounted for
Work in process, May 1
Started into production
Total units
Units accounted for
Transferred out
Work in process, May 31
Total units
500
2,000
2,500
1,700
800
2,500
1,700
800
2,500
1,700
320*
2,020
*800 X 40%
(2)
Materials cost
Conversion costs
Beginning work in
process
Added during month
Total
Equivalent units
Cost per unit
$15,000
50,000
$65,000
2,500
$26
$18,000
52,700
$70,700
2,020
$35
($19,020 + $33,680)
(3)
Costs accounted for
Transferred out (1,700 X $61)
Work in process, May 31
Materials (800 X $26)
Conversion costs (320 X $35)
Total costs
$20,800
11,200
$103,700
32,000
$135,700
PROBLEM 3-5B (Continued)
(b) SWINN COMPANY
Bicycle Department
Production Cost Report
For the Month Ended May 31, 2014
Equivalent Units
Quantities
Physical
Units
Materials
Conversion
Costs
(Step 1)
(Step 2)
Units to be accounted for
Work in process, May 1
Started into production
Total units
Units accounted for
Transferred out
500
2,000
2,500
1,700
1,700
1,700
Work in process, May 31
800
800
320
(800 X .40)
Total units
2,500
2,500
2,020
Costs
Materials
Conversion
Costs
Total
Unit costs (Step 3)
Total cost
Equivalent units
Unit costs (a) ÷ (b)
Costs to be accounted for
Work in process, May 1
Started into production
Total costs
(a)
(b)
$65,000
2,500
$26
$70,700
2,020
$35
$135,700
$61
$ 33,000
102,700
$135,700
Cost Reconciliation Schedule (Step 4)
Costs accounted for
Transferred out (1,700 X $61)
Work in process, May 31
Materials (800 X $26)
Conversion costs (320 X $35)
Total costs
$20,800
11,200
$103,700
32,000
$135,700
PROBLEM 3-6B
(a) Computation of equivalent units:
Equivalent Units
Physical
Units
Materials
Conversion
Costs
Units accounted for
Transferred out
Work in process, March 31
(60% materials,
(20% conversion costs)
Total units
66,000
20,000
86,000
66,000
12,000
78,000
66,000
4,000
70,000
Computation of March unit costs
Materials: $156,000 ÷ 78,000 equivalent units = $2.00
(b) Cost Reconciliation Schedule
Costs accounted for
Transferred out (66,000 X $3.40)……………….. $224,400
Work in process, March 31
*PROBLEM 3-7B
(a) Basketballs
(1) Equivalent units—Materials
Physical
Units
Materials
Added
This Period
Equivalent
Units
Work in process, August 1
Started and completed
Work in process, August 31
Total
500
1,400
600
2,500
(2,000 – 600)
* 0%*
100%
100%
0
1,400
600
2,000
Equivalent units—Conversion
Physical
Units
Conversion
Added
This Period
Equivalent
Units
Work in process, August 1
500
40% (1 – .6) 200
Started and completed
Work in process, August 31
Total
1,400
600
2,500
(2,000 – 600)
100%
50%
1,400
300
1,900
(2) Unit costs
Materials
Conversion
Costs in August (a)
Equivalent units (b)
Unit costs [(a) ÷ (b)]
$1,600
2,000
$.80
**$2,280**
1,900
$1.20
*PROBLEM 3-7B (Continued)
(3) Assignment of costs to units transferred out and in process
Costs to Be
Assigned
Assignment of Costs
Equivalent
Units
Unit
Cost
Total Costs
Assigned
Total mfg. costs
Transferred out
***$5,005***
Work in process, August 1
Conversion
Started and completed
Total costs transferred out
200
1,400
1.20
2.00
$1,125
240
2,800
$4,165
Work in process, August 31
Materials
Conversion costs
Total costs
600
300
.80
1.20
480
360
840
$5,005
***Work in process, August 1, $1,125 + Materials $1,600 + Labor $1,280 + Overhead
$1,000
Soccer balls
(1) Equivalent units—Materials
Physical
Units
Materials
Added
This Period
Equivalent
Units
Work in process, August 1
Started and completed
Work in process, August 31
Total
200
1,850
150
2,200
(2,000 – 150)
* 0%*
100%
100%
0
1,850
150
2,000
*All materials are added at the beginning of the production process
Equivalent units—Conversion
Physical
Units
Conversion
Added
This Period
Equivalent
Units
Work in process, August 1
200
20% (1 – .8) 40
Started and completed
Work in process, August 31
Total
1,850
150
2,200
(2,000 – 150)
100%
70%
1,850
105
1,995
*PROBLEM 3-7B (Continued)
(2) Unit costs
Materials
Conversion
Costs in August (a)
Equivalent units (b)
Unit costs (a) ÷ (b)
$2,800
2,000
$1.40
$2,394**
1,995
$1.20
**Direct Labor $1,000 + Manufacturing Overhead $1,394
Costs to Be
Assigned
Assignment of Costs
Equivalent
Units
Unit
Cost
Total Costs
Assigned
Total mfg. costs
Transferred out
***$5,644***
Work in process, August 1
Conversion
Started and completed
Total costs transferred out
40
1,850
$1.20
$2.60
$ 450
48
4,810
$5,308
Work in process, August 31
Materials
Conversion costs
Total costs
150
105
$1.40
$1.20
210
126
336
$5,644
***Work in process, August 1, $450 + Materials $2,800 + Labor $1,000 + Overhead
$1,394
*PROBLEM 3-7B (Continued)
(b) HOLIDAY COMPANY
Production Cost Report—Basketballs
For the Month Ended August 31
Equivalent Units
Quantities
Physical
Units
Materials
Conversion
Costs
(Step 1)
(Step 2)
Units to be accounted for
Work in process, August 1
Started into production
Total units
Units accounted for
Completed and transferred out
Work in process, August 1
Started and completed
Work in process, August 31
Total units
500
2,000
2,500
500
1,400
600
2,500
0
1,400
600
2,000
200
1,400
300
1,900
Costs
Materials
Conversion
Costs
Total
Unit costs (Step 3)
Costs in August (a)
Equivalent units (b)
Unit costs [(a) ÷ (b)]
Costs to be accounted for
Work in process, August 1
Started into production
Total costs
Cost Reconciliation Schedule
Costs accounted for
Transferred out
Work in process, August 1
Conversion costs to complete
beginning inventory (200 X $1.20)
Started and completed
(1,400 X $2.00)
Work in process, August 31
Total costs
$1,600
2,000
$.80
$1,125
240
2,800
$2,280
1,900
$1.20
$1,125
3,880*
$5,005
$4,165
$3,880
$2.00