Exercise 16–11 (continued)
3.
Cost assignment and reconciliation – FIFO
Beginning inventory
$ 167,066
61,920
77,760
139,680
$ 306,746
Costs of units started and completed
$619,200
518,400
Costs to be assigned:
Beginning inventory
$167,066
Direct materials – current period
850,368
Conversion costs – current period
649,296
$1,666,730
Dept. 1 – WIP
Beg. Inv
Conv
Transferred out
End. Inv.
Exercise 16-12 (30 minutes)
ASHAD COMPANY—Molding Department
Process Cost Summary – Weighted Average Method
For Month Ended July 31
Costs Charged to Production
Costs of beginning work in process ($18,550 + $2,280) ………………………
$ 20,830
Costs incurred this period ($357,500 + $188,670) ……………………………….
546,170
Total costs to account for …………………………………………………………………
$567,000
Unit Information
Units to Account For
Units Accounted For
Beginning work in process ……………….
2,000
Completed & transferred out …………………………..
32,000
Units started this period ……………………
32,500
Ending work in process …………………………..
2,500
Total units to account for ………………….
34,500
Total units accounted for …………………………..
34,500
Equivalent Units of Production (EUP)
Direct
Materials
Conversion
Units completed and transferred out …………………………..
32,000 EUP
32,000 EUP
Units of ending work in process …………………………..
2,500 EUP
1,500 EUP
Equivalent units of production …………………………..
34,500 EUP
33,500 EUP
Cost per EUP
Direct
Materials
Conversion
Costs of beginning work in process …………………………..
$ 18,550
Costs incurred this period …………………………..
Total costs ……………………………………………………….
$376,050
Cost Assignment and Reconciliation
Costs transferred out
Direct materials (32,000 x $10.90) …………………………..
Conversion (32,000 x $5.70) ……………………………………………………….
Cost of ending work in process
Exercise 16-13 (40 minutes)
ASHAD COMPANY—Molding Department
Process Cost Summary – FIFO Method
For Month Ended July 31
Costs Charged to Production
Costs of beginning work in process
Direct materials…………………………………………
$ 18,550
Conversion………………………………………………
2,280
$ 20,830
Costs incurred this period
Direct materials…………………………………………
357,500
Conversion………………………………………………
188,670
546,170
Total costs to account for………………………………
$567,000
Unit cost information
Units to account for
Units accounted for
Beginning work in process….
2,000
Completed & transferred out ………..
32,000
Units started this period……..
32,500
Ending work in process ………………
2,500
Total units to account for……
34,500
Total units accounted for …………….
34,500
Equivalent units of production
Direct
Materials
Conversion
Units to complete beginning WIP
Direct materials (2,000 x 0%)……………
Conversion (2,000 x 80%)………………..
Direct materials…………………………….
Conversion…………………………………..
Equivalent units of production…………….
Exercise 16–13 (Concluded)
Cost per EUP
Direct
Materials
Conversion
Costs incurred this period…………
$ 357,500
$ 188,670
EUP (from prior page) ………………
÷ 32,500
÷ 33,100
Cost per EUP………………………….
$11.00 per
EUP
$5.70 per
EUP
Cost assignment and reconciliation
Costs transferred out
Cost of beginning work in process…
$20,830
Cost to complete beginning work in process
Direct materials (0 EUP x $11.00 per EUP)……..
$ 0
Conversion (1,600 EUP x $5.70 per EUP)………
9,120
9,120
Costs of units started and completed this period
Conversion (30,000 EUP x $5.70 per EUP)……….
Costs of ending work in process
Direct materials (2,500 EUP x $11.00 per EUP)….
Conversion (1,500 EUP x $5.70 per EUP)…………
Exercise 16-14 (30 minutes)
Part 1: Cost of goods transferred and cost of goods sold
Weaving
Sewing
Finished
Department
Department
Goods
Beginning inventory …………………………….
$ 300,000
$ 570,000
$1,266,000
Direct materials ……………………………………
240,000
75,000
Direct labor ………………………………………….
1,200,000
360,000
Overhead applied (80% & 150% of labor) ……
960,000
540,000
Total costs—Weaving…………………………
2,700,000
Less ending inventory—Weaving ……….
(330,000)
TRANSFERRED TO SEWING (a) …………………..
$2,370,000
2,370,000
Total costs—Sewing ……………………………….
3,915,000
Less ending inventory—Sewing ………..
(700,000)
TRANSFERRED TO FINISHED GOODS (b) ……..
$3,215,000
3,215,000
Less ending inventory—Finished goods ….
(1,206,000)
COST OF GOODS SOLD (c) ……………………….
$3,275,000
Part 2: Summary journal entries.
2,370,000
(a)
Work in Process Inventory—Weaving ……………….
3,215,000
Work in Process Inventory—Sewing …………………
Accounts Receivable …………………………………………….
4,000,000
(c)
Sales ……………………………………………………….
Cost of Goods Sold ………………………………………………
3,275,000
Finished Goods Inventory …………………………..
3,275,000
Exercise 16-15 (25 minutes)
Summary journal entries (all dated June 30)
a.
Raw Materials Inventory ………………………………………..
500,000
Accounts Payable …………………………..……………….
500,000
Purchased raw materials.
b.
Work in Process Inventory—Weaving …………………….
240,000
Work in Process Inventory—Sewing ………………………
75,000
Raw Materials Inventory …………………………..
315,000
Used direct materials.
c.
Factory Overhead …………………………………………………
120,000
Raw Materials Inventory …………………………..
120,000
Used indirect materials.
d.
Work in Process Inventory—Weaving ……………………
1,200,000
Work in Process Inventory—Sewing ……………………..
360,000
Factory Wages Payable …………………………..
1,560,000
Used direct labor.
e.
Factory Overhead …………………………………………………
1,500,000
Factory Wages Payable …………………………..
1,500,000
Used indirect labor.
Factory Overhead …………………………………………………
156,000
Other Accounts ……………………………………………….
Incurred other overhead costs.
g.
Work in Process Inventory—Weaving ……………………
960,000
Work in Process Inventory—Sewing ……………………..
540,000
Factory Overhead …………………………………………….
1,500,000
h.
Factory Wages Payable …………………………………………
Cash ……………………………………………………….
Paid total payroll.
Exercise 16–16 (25 minutes)
ELLIOTT COMPANY
Process Cost Summary – Weighted Average Method
For Month Ended March 31
Costs Charged to Production
Costs of beginning work in process
Direct materials …………………………..…………………
$ 2,500
Conversion …………………………………………………….
6,360
$ 8,860
Costs incurred this period
Direct materials …………………………..…………………
168,000
Conversion …………………………………………………….
479,640
647,640
Total costs to account for ………………………………..
$656,500
Unit information
Units to account for
Units accounted for
Beginning work in process …………………………..
Units started this period …………………………..
5,000
Total units to account for …………………………..
Total units accounted for …………….
Equivalent units of production
Direct
Materials
Conversion
Units completed & transferred out..
17,000 EUP
17,000 EUP
Units of ending work in process
Direct materials (5,000 x 100%)……
5,000 EUP
Conversion (5,000 x 35%)………….
__________
1,750 EUP
Equivalent units of production…….
22,000 EUP
18,750 EUP
Cost per EUP
Direct
Materials
Conversion
Cost of beginning work in process..
Total costs……………………………..
22,000 EUP
18,750 EUP
Exercise 16-16 (continued)
Cost assignment and reconciliation
Costs transferred out
Direct materials (17,000 EUP x $7.75 per EUP)…
$131,750
Conversion (17,000 x $25.92 per EUP)……………
440,640
$572,390
Costs of ending work in process
Direct materials (5,000 EUP x $7.75 per EUP)……
38,750
Conversion (1,750 EUP x $25.92 per EUP)……….
45,360
84,110
Total costs accounted for…………………………….
$656,500
Exercise 16-17 (40 minutes)
OSLO COMPANY
Process Cost Summary – Weighted Average Method
For Month Ended May 31
Costs Charged to Production
Costs of beginning work in process
Direct materials……………………………………………
$ 2,880
Conversion…………………………………………………
5,358
$ 8,238
Costs incurred this period
Direct materials……………………………………………
197,120
Conversion…………………………………………………
234,992
432,112
Beginning work in process ………….
Units started this period ………………
Total units to account for …………….
Total units accounted for …………………………..
Exercise 16–17 (Concluded)
Equivalent units of production
Direct
Materials
Conversion
Units completed & transferred out…
13,000 EUP
13,000 EUP
Units of ending work in process
Direct materials (3,000 x 100%)……
3,000 EUP
Conversion (3,000 x 25%)…………..
__________
750 EUP
Equivalent units of production………
16,000 EUP
13,750 EUP
Cost per EUP
Direct
Materials
Conversion
Cost of beginning work in process…
$ 2,880
$ 5,358
Costs incurred this period……………
197,120
234,992
Total costs………………………………
$200,000
$240,350
÷ EUP…………………………………….
16,000 EUP
13,750 EUP
Cost per EUP……………………………
$12.50 per
EUP
$17.48 per
EUP
Cost assignment and reconciliation
Costs transferred out
$162,500
Conversion (13,000 x $17.48 per EUP)……………
227,240
Costs of ending work in process
Direct materials (3,000 EUP x $12.50 per EUP)…
Conversion (750 EUP x $17.48 per EUP)…………
Beginning work in process ………….
Exercise 16–19 (20 minutes)
[Note: Solution key is on the following page.]
Punching
Bending
$12,750
Beginning Work in
Process
$7,500
Direct
Materials
$60,000
Direct
Labor
$12,000
Factory
Overhead
$15,000
Total costs in process in
punching department
(1) $94,500
Ending Work in
Process
$6,000
Costs transferred
to bending
(2) $88,500
Beginning Work in
Process
$9,750
Direct
Materials
(3) $83,250
Direct
Labor
$30,750
Factory
Overhead
$36,900
(4)
Total costs in process in bending department
$249,150
Ending work in process
12,750
Costs transferred to finished goods
$236,400
(5)
Beginning Finished Goods inventory
$ 18,000
Add costs transferred to finished goods
236,400
Cost of goods available for sale
$254,400
(6)
Cost of goods available for sale
$254,400
Less ending inventory
[?]
Cost of goods sold
Exercise 16–19 (Continued)
Key to solution of flowchart:
(1)
Beginning work in process in punching
$ 7,500
Direct materials added
$ 60,000
Direct labor added
12,000
Factory overhead added
15,000
Total manufacturing costs added
87,000
Total costs in process in punching department
$ 94,500
(2)
Total costs in process in punching department
$ 94,500
Less ending work in process
6,000
Costs transferred to bending
$ 88,500
(3)
Beginning work in process in bending
$ 9,750
Total costs added
[?]
Total costs in process in bending department
$249,150
Total costs added = $249,150 – $9,750 = $239,400
Direct materials added
$ [?]
Direct labor added
30,750
Factory overhead added
36,900
Costs transferred from punching
88,500
Total costs added (from above)
$239,400
Direct materials added = $239,400-$30,750-$36,900-$88,500
= $83,250
Exercise 16–20 (20 minutes)
1. and 2.
Equivalent Units of Production (EUP)
Direct
Materials
Conversion
Units completed and transferred out…
23,000 EUP
23,000 EUP
Units of ending work in process………
Direct materials (7,000* x 100%)……….
7,000 EUP
Conversion (7,000 x 40%)………………
.
2,800 EUP
Equivalent units of production…………
*Units in beginning WIP + units started – units
completed; 2,000 + 28,000 – 23,000 = 7,000.
30,000 EUP
25,800 EUP
Costs of beginning work in process…..
Costs incurred this period………………
5.
Costs transferred out
Direct materials [$14.00 per EUP x 23,000 EUP] ….
$322,000
Conversion [$15.40 per EUP x 23,000 EUP] ………..
354,200
Total transferred out ………………………………………….
$676,200
6.
Cost of ending work in process
Direct materials [$14.00 per EUP x 7,000 EUP] ……
Conversion [$15.40 per EUP x 2,800 EUP] ………….
Total ending work in process …………………………..
141,120
Exercise 16-21 (10 minutes)
1.
Raw Materials Inventory ………………………………………..
80,000
Accounts Payable ……………………………………………
80,000
Purchased materials on credit.
2.
Work in Process Inventory—Roasting …………………….
42,000
Raw Materials Inventory …………………………………..
42,000
Used direct materials in production.
3.
Factory Overhead ………………………………………………….
22,500
Raw Materials Inventory …………………………………..
22,500
Used indirect materials.
Exercise 16–22 (10 minutes)
1.
Work in Process Inventory—Roasting …………………….
42,000
Work in Process Inventory—Blending …………………….
Factory Wages Payable …………………………………….
33,000
75,000
Incurred direct labor costs.
Factory Overhead …………………………………………………..
20,000
Factory Wages Payable …………………………………….
20,000
Incurred indirect labor costs.
3.
Factory Wages Payable ………………………………………….
95,000
Cash ………………………………………………………………..
95,000
Paid factory payroll.
Exercise 16–23 (5 minutes)
1.
Factory Overhead ………………………………………………….
38,750
Cash ……………………………………………………………….
38,750
Incurred and paid overhead costs.
2.
Work in Process Inventory—Roasting …………………….
46,200
Work in Process—Blending ……………………………………
Factory Overhead ……………………………………………
36,300
82,500
Applied overhead: $42,000 x 110%; $33,000 x 110%
Exercise 16–24 (10 minutes)
1.
Finished Goods Inventory ………………………………………
135,600
Work in Process Inventory—Assembly ……………..
135,600
Transfer goods from production to finished goods.
2.
Accounts Receivable ……………………………………………..
315,000
Sales ………………………………………………………………..
315,000
Sold goods on credit.
Cost of Goods Sold ………………………………………………..
175,000
Finished Goods Inventory …………………………………
175,000
Record cost of goods sold.
Exercise 16–25 (25 minutes)
1.
Work in Process Inventory—Shredding ………………….
522,000
Raw Materials Inventory …………………………..
522,000
Direct materials used in production.
2.
Work in Process Inventory—Shredding ………………….
26,000
Work in Process Inventory—Bagging ……………………..
Factory Wages Payable …………………………..
104,000
130,000
Direct labor ($130,000 x 20%; $130,000 x 80%).
3.
Work in Process Inventory—Shredding ………………….
45,500
Work in Process Inventory—Bagging ……………………..
Factory Overhead ……………………………………………
182,000
227,500
Overhead applied: 175% of direct labor.
4.
Work in Process Inventory—Bagging …………………….
595,000
Work in Process Inventory—Shredding …………….
595,000
6.
Accounts Receivable ……………………………………………..
950,000
Sales ……………………………………………………….
950,000
Sales on credit.
7.
Cost of Goods Sold ……………………………………………….
540,000
Finished Goods Inventory …………………………..
540,000
Exercise 16–26 (25 minutes)
a. Purchased raw materials on credit at a cost of $52,000.
b. Used direct materials costing $42,000 in production.
c. Incurred direct labor costing $32,000 in production.
d. Incurred indirect labor costing $6,000.
e. Incurred overhead costs of $10,000, which are paid in cash.
f. Used indirect materials costing $10,000.
Problem 16-1A (45 minutes)
Part 1: Cost of goods transferred and cost of goods sold
(a) Beginning work in process inventory—Cutting …………..
$ 43,500
Direct materials used in production …………………………..
21,750
Direct labor used in production ………………………………………
15,600
Overhead applied (150% of direct materials cost)…………….
32,625
Total production costs ………………………………………………….
113,475
Less ending work in process inventory—Cutting …………..
(51,500)
Transferred to work in process—Stitching (a) ………………….
$ 61,975
$ 63,300
Direct materials used in production …………………………..
Overhead applied (120% of direct labor cost) …………………..
Total production costs ………………………………………………….
262,555
Less ending work in process inventory—Stitching ………..
(60,500)
Transferred to finished goods (b) ……………………………………
$202,055
(c) Beginning finished goods inventory …………………………..
$ 20,100
Transferred-in from Stitching ………………………………………….
Cost of goods available for sale …………………………………….
202,055
222,155
Less ending finished goods inventory …………………………..
(8,250)
Cost of goods sold (c) …………………………………………………….
$213,905
Problem 16-1A (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.
c.
May 31
Factory Overhead …………………………………………………
6,000
Raw Materials Inventory …………………………..
6,000
Used indirect materials.
d.
May 31
Work in Process Inventory—Cutting ……………………..
15,600
Work in Process Inventory—Stitching ……………………
Factory Wages Payable …………………………..
62,400
78,000
Incurred direct labor costs.
May 31
Factory Overhead …………………………………………………
55,000
Factory Wages Payable …………………………..
55,000
Incurred indirect labor costs.
May 31
Factory Wages Payable ………………………………………….
Cash ……………………………………………………….
Paid factory payroll.
May 31
Factory Overhead …………………………………………………
Other Accounts ……………………………………………….
Incurred other overhead costs.
h.
May 31
Work in Process Inventory—Cutting ………………………
32,625
Work in Process Inventory—Stitching ……………………
Factory Overhead ……………………………………………
74,880
Problem 16-1A (continued)
i.
May 31
j.
May 31
Work in Process Inventory—Stitching ……………………
Work in Process Inventory—Cutting …………………
Transferred costs of partially completed goods.
Finished Goods Inventory …………………………..
61,975
202,055
61,975
Work in Process Inventory—Stitching ………………
202,055
Transferred completed products from
production to finished goods inventory.
k.
May 31
213,905
May 31
Accounts Receivable …………………………………………….
256,000
Problem 16-2A (40 minutes)
For the first process:
Part 1
(a) and (b) Equivalent units with respect to direct materials and conversion
Direct
Equivalent units of production (EUP)
Materials
Conversion
Units completed and transferred out ……………….
700,000
700,000
Units of ending work in process ……………………..
Direct materials (180,000 x 100%) ………………
180,000
Conversion (180,000 x 30%) ………………………
_______
54,000
Total equivalent units of production ………………..
880,000
754,000
Part 2
Cost per equivalent unit of production
Direct
Materials
Conversion
Costs of beginning work in process ……………………….
$ 420,000
$ 139,000
Costs incurred this period ……………………………………..
2,220,000
3,254,000
Total costs ……………………………………………………….
$2,640,000
$3,393,000
÷ Equivalent units of production …………………………..
880,000 EUP
754,000 EUP
Cost per equivalent unit of production ……………………
$3.00 per EUP
$4.50 per EUP
Part 3 Assigning product costs to units
Costs transferred out
Costs of ending work in process
Problem 16-3A (75 minutes)
Part 1
Weighted average
Units
Cutting Dept.—Units
Units started
Units in ending inventory
Units transferred out
End. Inv
FAST CO.—Cutting Department
Process Cost Summary – Weighted Average Method
For the month ended October 31
Costs Charged to Production
Costs of beginning work in process
Direct materials……………………………………………
$ 17,100
Conversion…………………………………………………
67,200
$ 84,300
Costs incurred this period
Direct materials……………………………………………
144,400
Conversion costs…………………………………………
862,400
1,006,800
Total costs to account for…………………………………
$1,091,100
Unit cost information
Beginning work in process …………………………..
150,000
Units started this period…………………………..
140,000
Total units to account for …………………………..
170,000
170,000