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Ex. 18–15 (FINMAN); Ex. 3–15 (MAN)
a. $23,064; determined as follows:
Beginning work in process balance……………………………………………
…
$ 20,856
Cost of beginning work in process completed during November…………
…
b. Cost of beginning work in process……………………………………………… $ 23,064
c. $16,398; determined as follows:
d. Direct materials cost per equivalent unit: $14.50 ($17,400 ÷ 1,200 units)
18-21
Ex. 18–16 (FINMAN); Ex. 3–16 (MAN)
Whole Direct
UNITS Units Materials Conversion
(1) (1)
Units charged to production:
Inventory in process, August 1 700
Received from materials storeroom 14,300
MORNING BREW COFFEE COMPANY
Cost of Production Report—Roasting Department
For the Month Ended August 31, 2014
Equivalent Units
18-22
Ex. 18–16 (FINMAN); Ex. 3–16 (MAN) (Concluded)
Direct
COSTS Materials Conversion Total
Costs per equivalent unit:
Total costs for August in Roasting
Costs allocated to completed and
partially completed units:
Inventory in process, August 1 balance $ 3,479
To complete inventory in process,
1$65,780 + $21,942
2560 units × $1.50
b. Materials: From current period………………………………………………
…
Costs
$ 4.60
18-23
Ex. 18–17 (FINMAN); Ex. 3–17 (MAN)
a.
Whole Direct
UNITS Units Materials Conversion
Units charged to production:
Inventory in process, January 1 1,400
Received from Weaving Department 58,000
Total units accounted for by the
KARACHI CARPET COMPANY
Cost of Production Report—Cutting Department
For the Month Ended January 31, 2014
Equivalent Units
18-24
Ex. 18–17 (FINMAN); Ex. 3–17 (MAN) (Concluded)
Direct
COSTS Materials Conversion Total
Total costs accounted for by the
Cutting Department $1,051,521
Cost allocated to completed and
partially completed units:
Inventory in process, January 1 balance $ 22,960
Inventory in process, January 31 40,960 4,896 45,856
Total costs assigned by the Cutting
Department $1,051,521
1$134,550 + $151,611
b. Materials: From current period………………………………………………
…
Costs
$12.80
18-25
Ex. 18–18 (FINMAN); Ex. 3–18 (MAN)
a. 1. Work in Process—Casting Department 350,000
Materials—Alloy 350,000
*Supporting calculations:
Cost of 2,530 transferred-out pounds:
Inventory in process, May 1…………………………………………………………… $ 32,844
Cost to complete May 1 inventory:
Supporting equivalent unit and cost per equivalent unit calculations:
Whole Units Materials Conversion
Inventory in process, May 1
(60% completed) 230 0 92
$350,000
2,500
Equivalent Units
= $140 per poundCost per equivalent unit of materials:
1
18-26
Ex. 18–18 (FINMAN); Ex. 3–18 (MAN) (Concluded)
b. $29,760; determined as follows:
c. Materials: From current period……………………………………
…
$140
18-27
Ex. 18–19 (FINMAN); Ex. 3–19 (MAN)
a. 1. Work in Process—Papermaking Department 330,750
Materials—Pulp 330,750
*Supporting calculations:
Cost of 103,900 transferred-out units:
Inventory in process, March 1………………………………………………………… $ 9,139
Cost to complete March 1 inventory:
Supporting equivalent unit and cost per equivalent unit calculations:
Whole Units Materials Conversion
Inventory in process, March 1
(35% completed) 2,600 0 1,690
b. $14,319; determined as follows:
Equivalent Units
1
18-28
Ex. 18–20 (FINMAN); Ex. 3–20 (MAN)
Memo
To: Production Manager
The cost of production report is used to identify the cost per case for each of the
four flavors as shown below.
Orange Cola Lemon-Lime Root Beer
Orange Cola Lemon-Lime Root Beer
Concentrate $1.85 $2.15 $2.10 $1.90
Water 0.50 0.50 0.50 0.50
Cost per Case by Cost Element
18-29
Ex. 18–21 (FINMAN); Ex. 3–21 (MAN)
The solution to this exercise is to determine if the cost per pound trends in paper
stock, conversion, and coating costs are remaining stable over time. The
following table can be developed from the data:
a. January February March April May June
Paper stock
($ ÷ pounds output) $0.70 $0.70 $0.70 $0.70 $0.70 $0.70
Coating
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
remaining stable.
Operator 3 is concerned about coating costs. The coating cost per output
pound is increasing over time. Thus, we can conclude that the coating
efficiency is declining over time. Apparently, twice the coating material was
being spread per pound of output in June than in January. The coating
18-30
Ex. 18–22 (FINMAN); Ex. 3–22 (MAN)
The Hawkeye Machining managers are displaying typical fears to a just-in-time
processing system. Just-in-time removes the safety provided by materials, in-
process, and finished goods inventory balances. Indeed, these types of comments
The in-process inventories can be reduced significantly if the underlying
manufacturing processes are made reliable. The director of manufacturing is
correct in his observation, but his solution is wrong. The solution is not to
increase inventory but to improve the reliability of the machines so that they do
not experience emergency breakdowns. Thus, the manufacturing operation must
18-31
Appendix Ex. 18–23 (FINMAN); Ex. 3–23 (MAN)
a. and b.
a. Whole b. Equivalent Units
Units of Production
Units to be accounted for:
Beginning work in process 1,900
18-32
Appendix Ex. 18–24 (FINMAN); Appendix Ex. 3–24 (MAN)
a. Drawing Department
Whole Equivalent Units
Units of Production
Units to be accounted for:
Beginning work in process 500
Units started during period 11,600
b. Winding Department
Whole Equivalent Units
Units of Production
Units to be accounted for:
Beginning work in process 350
1
18-33
Appendix Ex. 18–25 (FINMAN); Appendix Ex. 3–25 (MAN)
a. Units in process, May 1…………………………………………………………
…
4,200
b. Equivalent
Whole Units of
Units Production
Units to be accounted for:
Beginning work in process 4,200
18-34
Appendix Ex. 18–26 (FINMAN); Appendix Ex. 3–26 (MAN)
a. and b.
Equivalent
Whole Units of
Units Production
Units to be accounted for:
Beginning work in process 900
Total Equivalent Units
c. Cost per Equivalent Unit =
Total Production Costs
18-35
Appendix Ex. 18–27 (FINMAN); Appendix Ex. 3–27 (MAN)
a. Equivalent
Whole Units of
Units Production
Units to be accounted for:
Beginning work in process 500
Total Equivalent Units
Cost per Equivalent Unit =
Total Production Costs
18-36
Appendix Ex. 18–28 (FINMAN); Appendix Ex. 3–28 (MAN)
Whole Equivalent Units
UNITS Units of Production
Units to account for during production:
Inventory in process, May 1 1,150
COSTS Costs
Costs per equivalent unit:
Total costs for May in Roasting Department $42,804
HIGHLANDS COFFEE COMPANY
Cost of Production Report—Roasting Department
For the Month Ended May 31, 2014
1
18-37
Appendix Ex. 18–29 (FINMAN); Appendix Ex. 3–29 (MAN)
Whole Equivalent Units
UNITS Units of Production
Units charged to production:
Inventory in process, January 1 3,400
COSTS
Costs per equivalent unit:
Total costs for January in Cutting Department $575,010
Costs allocated to completed and partially completed units:
Transferred to finished goods in January
DALTON CARPET COMPANY
Cost of Production Report—Cutting Department
For the Month Ended January 31, 2014
1
18-38
Prob. 18–1A (FINMAN); Prob. 3–1A (MAN)
1. a. Materials 74,200
Accounts Payable 74,200
b. Work in Process—Spinning Department 38,300
Work in Process—Tufting Department 31,200
c. Work in Process—Spinning Department 22,300
Work in Process—Tufting Department 16,900
e. Factory Overhead—Spinning Department 1,000
Factory Overhead—Tufting Department 800
Prepaid Insurance 1,800
Prob. 18–1A (FINMAN); Prob. 3–1A (MAN) (Concluded)
2. Work in Work in
Process— Process— Finished
Materials Spinning Dept. Tufting Dept. Goods
Balance, August 1…
…
$ 3,700 $ 1,200 $ 1,900 $ 4,800
3.
Balance, August 1…
…
$0 $0
Factory Overhead— Factory Overhead—
Spinning Dept. Tufting Dept.
18-40
