Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
Problem 16-4AA (Continued)
Part 2
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
1042
Problem 16-5A (45 minutes)
Part 1: Cost of goods transferred to finished goods and cost of goods sold
(a) Beginning work in process inventory—Cutting ………
$ 43,500
Direct materials used in production …………………………….
21,750
15,600
Overhead applied (150% of direct materials cost) ………..
(b) Beginning work in process inventory—Stitching ……..
$ 63,300
Transferred-in from Cutting ………………………………………….
Direct materials used in production ………………………………
61,975
0
62,400
Overhead applied (120% of direct labor cost) ………………..
(c) Beginning finished goods inventory……………………….
$ 20,100
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
1043
Problem 16-5A (continued)
Part 2: Summary journal entries
a.
May 31
Raw Materials Inventory …………………………….
25,000
Accounts Payable ………………………………..
25,000
Purchased raw materials.
b.
May 31
Work in Process Inventory—Cutting ……………
21,750
Raw Materials Inventory ………………………..
21,750
Used direct materials.
May 31
Factory Overhead ………………………………………
Raw Materials Inventory ……………………….
d.
May 31
Work in Process Inventory—Cutting ……………
15,600
Work in Process Inventory—Stitching ………….
62,400
Factory Wages Payable ………………………….
78,000
Incurred direct labor costs.
e.
May 31
Factory Overhead ……………………………………….
55,000
Factory Wages Payable ………………………….
55,000
Incurred indirect labor costs.
f.
May 31
Factory Overhead ……………………………………….
46,505
Cash ……………………………………………………..
46,505
Incurred other overhead costs.
g.
May 31
Work in Process Inventory—Cutting …………….
32,625
Work in Process Inventory—Stitching ………….
74,880
Factory Overhead …………………………………..
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
1044
Problem 16-5A (continued)
h.
May 31
Work in Process Inventory—Stitching …………
61,975
Work in Process Inventory—Cutting ……….
Transferred costs of partially completed goods.
i.
May 31
Finished Goods Inventory …………………………..
202,055
Work in Process Inventory—Stitching ……
May 31
Accounts Receivable …………………………………
256,000
Sales ……………………………………………………
k.
May 31
213,905
Finished Goods Inventory …………………….
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
1045
Problem 16-6AA (40 minutes)
1. Equivalent units of production—FIFO
Direct Materials
Conversion
Units
Percent
Added
EUP
Percent
Added
EUP
Beginning work in process
37,500
40%
15,000
60%
22,500
51,250
2. Cost per equivalent unit of production—FIFO
Cost per equivalent unit—FIFO
Direct Materials
Conversion
Costs added this period ………………………………..
$ 505,035
$ 398,395
Cost per equivalent unit of production …………..
$2.58 per EUP
3. Assignment of costs to output of Cutting department—FIFO
Cost assignment—FIFO
EUP
Cost per EUP
___Total Cost____
Beginning work in process
$ 102,750
To complete beginning work in process
Direct materials
15,000
$2.58
$ 38,700
Conversion
22,500
$2.18
49,050
Started and completed
Direct materials
$2.58
Conversion
$2.18
327,000
Completed and transferred out
Ending work in process
Direct materials
30,750
$2.58
Conversion
10,250
$2.18
22,345
1046
Problem 16-7AA (30 minutes)
1. Equivalent units of production: FIFO method
Direct Materials
Conversion
Units
Percent
Added
EUP
Percent
Added
EUP
Beginning work in process ……….
3,000
0%
0
60%
1,800
2. Cost per equivalent unit of production: FIFO method
Direct Materials
Conversion
Costs added this period …………………………..
$ 248,400
$1,082,970
3.
Cost assignment—FIFO
EUP
Cost per EUP
_ Total Cost __
Beginning work in process ………………..
$ 120,870
To complete beginning work in process
Direct materials ……………………………….
0
$11.50
$ 0
Conversion ……………………………………..
1,800
$47.25
85,050
Direct materials ……………………………….
$11.50
Conversion ……………………………………..
$47.25
Completed and transferred out ………..
Direct materials ……………………………….
$11.50
Conversion ……………………………………..
1,920
$47.25
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
1047
PROBLEM SET B
Problem 16-1B (50 minutes)
Part 1. Equivalent units of production: Weighted-average
Direct Materials
Conversion
Percent
EUP
Percent
EUP
Part 2. Cost per equivalent unit of production: Weighted-average
Direct Materials
Conversion
Costs of beginning work in process ………….
$ 58,000
$ 86,400
Costs added this period …………………………..
Total costs ……………………………………………….
$770,000
$2,066,400
Part 3.
Cost assignment—Weighted-average
EUP
Cost per EUP
Total Cost .
Completed and transferred out
Direct materials ……………………..
80,000
$ 8.75
$ 700,000
Conversion …………………………..
80,000
$2,716,000
Direct materials ……………………..
$ 8.75
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
1048
Problem 16-1B (Concluded)
Part 4
MEMORANDUM
TO:
FROM:
DATE:
RE: Percent Complete Error Analysis
For the first process:
If the units in ending inventory are 75% complete instead of 25% for conversion,
the number of equivalent units in ending inventory for conversion is
Regarding financial statements, this error causes an overstatement of cost of
goods sold and an understatement of net income on the income statement for
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
1049
Problem 16-2B (50 minutes)
Part 1
BRUN COMPANY—Mixing Department
Production Cost Report – Weighted Average Method
For Month Ended November 30
Units to account for:
Units accounted for:
Beginning work in process ….
7,500
Completed and transferred out ……
100,000
Units started this period ………
Ending work in process ……………
Conversion
EUP
Cost per EUP
Direct Materials
Conversion
Costs of beginning work in process ……….
$ 6,800
$ 14,500
Costs added this period …………………………
116,400
1,067,000
Total costs …………………………………………….
÷ Equivalent units of production …………….
112,000 EUP
103,000 EUP
Cost per equivalent unit of production ……
Cost Assignment
EUP
Cost per EUP
Total Cost
Completed and transferred out
Direct materials ……………………………….
100,000
$1.10
$ 110,000
Conversion ……………………………………..
100,000
$10.50
1,050,000
$1,160,000
Ending work in process
Direct materials ……………………………….
$1.10
Conversion ……………………………………..
$10.50
Part 2
Nov. 30
Work in Process Inventory—Baking ………..
1,160,000
Work in Process Inventory—Mixing ……
Transfer of goods from Mixing to Baking …..
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
1050
Problem 16-3B (50 minutes)
Part 1
SWITCH COMPANY—Cutting Department
Production Cost Report – Weighted Average Method
For Month Ended January 31
Units to account for:
Units accounted for:
Beginning work in process ….
Completed and transferred out ……
220,000
Units started this period ………
250,000
Ending work in process ……………
Direct Materials
Conversion
Equivalent Units of Production (EUP)
Units
% Complete
EUP
% Complete
EUP
Completed and transferred out ….
220,000
100%
220,000
100%
220,000
Ending work in process …………….
40,000
50%
20,000
30%
12,000
Equivalent Units of Production ….
240,000 EUP
232,000 EUP
Cost per EUP
Conversion
Costs of beginning work in process ……….
Costs added this period …………………………
Total costs …………………………………………….
Cost per equivalent unit of production ……
Cost Assignment
EUP
Cost per EUP
Total Cost
Completed and transferred out
Direct materials ……………………………….
220,000
$0.50
$110,000
Conversion ……………………………………..
220,000
$2.87
Ending work in process
Direct materials ……………………………….
20,000
$0.50
Conversion ……………………………………..
12,000
$2.87
Part 2
Jan. 31
Work in Process Inventory—Assembly ………………
741,400
Work in Process Inventory—Cutting …………….
741,400
Transfer of goods from Cutting to Assembly.
1051
Problem 16-4BA (80 minutes)
Part 1
SWITCH COMPANY—Cutting Department
Production Cost Report – FIFO Method
For Month Ended January 31
Units to account for:
Units accounted for:
Beginning work in process ….
10,000
Beginning work in process ………….
10,000
Units started this period ………
250,000
Units started and completed ……..
Ending work in process ……………
Direct Materials
Conversion
Equivalent Units of Production (EUP)
Units
% Added
EUP
% Added
EUP
Beginning work in process …………
10,000
25%
2,500
40%
4,000
Started and completed ……………..
Ending work in process ……………
40,000
Equivalent Units of Production …
Cost per EUP
Direct Materials
Conversion
Costs added this period …………………………
$ 112,500
$ 616,000
Cost per equivalent unit of production ……
Cost Assignment
EUP
Cost per EUP
Total Cost
Beginning work in process …………………
$ 57,340
To complete beginning work in process
Direct materials ………………………………..
2,500
$0.484
$ 1,210
Conversion ………………………………………
4,000
$2.726
10,904
12,114
Started and completed
Direct materials ………………………………..
$0.484
101,640
Conversion ………………………………………
$2.726
572,460
Completed and transferred out ………….
743,554
Ending work in process
Direct materials ………………………………..
$0.484
Conversion ………………………………………
$2.726
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
1052
Problem 16-4BA (Concluded)
Part 2
Jan. 31
Work in Process Inventory—Assembly ………..
743,554
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
1053
Problem 16-5B (45 minutes)
Part 1: Cost of goods transferred out and cost of goods sold
(a) Beginning work in process inventory—Mixing ……..
$ 156,000
Direct materials used in production ………………………….
174,000
52,500
Overhead applied (75% of direct materials cost) ……….
513,000
Transferred to work in process—Blending (a) …………..
(b) Beginning work in process inventory—Blending ….
$ 160,000
Transferred-in from Mixing ………………………………………..
Direct materials used in production …………………………..
263,000
44,000
74,680
Overhead applied (60% of direct labor cost) ………………
586,488
Transferred to finished goods (b) ………………………………
(c) Beginning finished goods inventory…………………….
$ 80,200
468,688
Transferred-in from Blending ……………………………………
388,488
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
1054
Problem 16-5B (continued)
Part 2: Summary journal entries
a.
Mar 31
Raw Materials Inventory …………………………..
212,000
Accounts Payable ………………………………
212,000
Purchased raw materials.
Mar 31
Work in Process Inventory—Mixing ………….
Work in Process Inventory—Blending ………
44,000
Raw Materials Inventory ……………………..
c.
Mar 31
41,200
Raw Materials Inventory ……………………..
41,200
d.
Mar 31
Work in Process Inventory—Mixing …………
52,500
Work in Process Inventory—Blending ………
74,680
Factory Wages Payable ………………………
Incurred direct labor costs.
e.
Factory Wages Payable ………………………
Incurred indirect labor costs.
f.
Mar 31
64,608
Cash …………………………………………………..
Incurred other overhead costs.
g.
Mar 31
Work in Process Inventory—Mixing ………….
Work in Process Inventory—Blending ……..
44,808
Factory Overhead ………………………………
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
1055
Problem 16-5B (continued)
h.
Mar 31
Work in Process Inventory—Blending ………
263,000
Work in Process Inventory—Mixing …….
Transferred costs of partially completed goods.
i.
Mar 31
Finished Goods Inventory ………………………..
388,488
Work in Process Inventory—Blending …
j.
Mar 31
Accounts Receivable ……………………………….
490,000
Sales ………………………………………………….
k.
Mar 31
408,438
Finished Goods Inventory ………………….
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
1056
Problem 16-6BA (40 minutes)
1. Equivalent units of production—FIFO
Direct Materials
Conversion
Units
Percent
Added
EUP
Percent
Added
EUP
Beginning work in process
62,500
60%
37,500
20%
12,500
2. Cost per equivalent unit of production—FIFO
Direct Materials
Conversion
$ 683,750
$ 446,050
$2.50 per EUP
$2.20 per EUP
3. Assignment of costs to output of department—FIFO
Cost assignment—FIFO
EUP
Cost per EUP
___Total Cost____
Beginning work in process
$ 172,500
To complete beginning work in process
Direct materials
37,500
$2.50
$ 93,750
Conversion
12,500
$2.20
27,500
Started and completed
Direct materials
$2.50
Conversion
$2.20
385,000
Completed and transferred out
Ending work in process
Direct materials
$2.50
152,500
Conversion
15,250
$2.20
33,550