551
E–7
a.
A
B
C
1
Units
Equivalent Units
of Production
2
Units to be accounted for:
3
Beginning Work in Process
2,000
4
46,200
Total
Transferred to Finished Goods in April
45,900
Inventory in process, April 30 (70% completed)
Total units
48,200
*70% × 2,300
Cost per Equivalent Unit =
Units Equivalent Total
Costs Production Total
552
E–8
A
B
C
1
COLONEL DIRKS COFFEE COMPANY
2
Cost of Production Report—Roasting Department
3
For the Month Ended August 31
4
Units
Units
Equivalent Units
of Production
5
Units charged to production:
6
Inventory in process, August 1
2,000
7
8
9
Transferred to Finished Goods in August
Total units to be assigned cost
*80% × 1,250
A
B
1
Costs
2
Unit costs:
3
Total costs for August in Roasting Department
$ 587,450
4
Total equivalent units
÷ 94,750
5
Cost per equivalent unit
$ 6.20
6
Costs assigned to production:
7
8
Costs incurred in August
579,320
9
Total costs accounted for by the Roasting Department
$ 587,450
Transferred to Finished Goods in August (93,750 units × $6.20)
$ 581,250
Inventory in process, August 31 (1,000 equivalent units × $6.20)
6,200
553
E–9
A
B
C
1
ORIENTAL CARPET COMPANY
2
Cost of Production Report—Cutting Department
3
For the Month Ended May 31
4
Units
Units
Equivalent Units
of Production
5
Units charged to production:
6
Inventory in process, May 1
8,000
7
8
9
Units to be assigned cost:
Transferred to Finished Goods in May
Total units to be assigned cost
*10% × 9,000
A
B
1
Costs
2
Unit costs:
3
Total costs for May in Cutting Department
$1,258,800
4
Total equivalent units
÷ 104,900
5
Cost per equivalent unit
6
Costs assigned to production:
7
Inventory in process, May 1
$ 75,000
8
Costs incurred in May
1,183,800
9
Total costs accounted for by the Cutting Department
$1,258,800
Costs allocated to completed and partially completed units:
Transferred to Finished Goods in May (104,000 units × $12.00)
$ 1,248,000
Inventory in process, May 31 (900 equivalent units × $12.00)
10,800
Total costs assigned by the Cutting Department
$ 1,258,800
554
E–10
Memo
To: Production Manager
The cost of production report was used to identify the cost per case for each of
the four flavors as shown below.
A
B
C
D
E
1
Grape
Cola
Orange
Root Beer
2
Total cost
$26,075
$393,000
$292,500
$17,700
3
4
A
B
C
D
E
1
Cost per Case by Cost Element
2
Grape
Cola
Orange
Root Beer
3
Concentrate
$1.90
$2.25
$2.20
$1.80
4
5
6
7
8
555
E–11
The objective of this exercise is to determine if cost-per-pound trends in paper
stock, conversion, and coating costs are remaining stable over time. The follow-
ing table can be developed from the data:
a.
A
B
C
D
E
F
G
1
April
May
June
July
August
Sept.
2
Paper stock
($/pounds output)
$0.80
$0.80
$0.80
$0.80
$0.80
$0.80
3
($/pounds output)
$0.18
$0.20
$0.22
$0.25
$0.26
$0.30
4
Conversion cost
($/pounds output)
$0.40
$0.40
$0.40
$0.40
$0.40
$0.40
5
Yield (pounds transferred
out/pounds input)
b. Operator 1 believes that energy consumption is becoming less efficient. The
energy cost is part of the conversion cost. The conversion cost per output
556
PROBLEMS
P–1
A
B
C
1
JOSHUA FLOUR COMPANY
2
Cost of Production Report—Sifting Department
3
For the Month Ended March 31
4
Units
Units
Equivalent Units
of Production
5
Units charged to production:
6
Inventory in process, March 1
3,200
7
9
Units to be assigned cost:
Total units to be assigned cost
A
B
1
Costs
2
Unit costs:
3
Total costs for March in Sifting Department
$73,350*
4
÷16,300
5
Cost per equivalent unit
6
Costs charged to production:
7
Inventory in process, March 1
$ 3,500
8
Costs incurred in March
9
Total costs accounted for by the Sifting Department
$73,350
Costs allocated to completed and partially completed units:
Transferred to Packaging Department in March (14,900 units × $4.50)
Inventory in process, March 31 (1,400 equivalent units × $4.50)
6,300
Total costs assigned by the Sifting Department
$73,350
557
P–2
A
B
C
1
SERGEANT WILKES COFFEE COMPANY
2
Cost of Production Report—Roasting Department
3
For the Month Ended October 31
4
Units
Units
Equivalent Units
of Production
5
Units charged to production:
6
Inventory in process, October 1
7,500
7
8
9
Units to be assigned cost:
Transferred to Packing Department in October
A
B
1
Costs
2
Unit costs:
3
Total costs for October in Roasting Department
$350,000
4
÷ 70,000
6
Costs charged to production:
Inventory in process, October 1
8
Costs incurred in October
Costs allocated to completed and partially completed units:
Transferred to Packing Department in October (64,000 units × $5.00)
Inventory in process, October 31 (6,000 equivalent units × $5.00)
30,000
*$135,600 + $118,900 + $67,900