Wild and Shaw, Financial & Managerial Accounting, 8e Solutions Manual: Chapter 16
967
Problem 16-3A (concluded)
Equivalent units of production
Direct
Materials
Conversion
Units completed & transferred out..
150,000 EUP
150,000 EUP
Units of ending work in process
Equivalent units of production……
Cost per EUP
Direct
Materials
Conversion
Cost of beginning work in process..
$17,100
$67,200
Costs incurred this period…………
144,400
862,400
Total costs…………………………….
$161,500
$929,600
÷ EUP…………………………………..
170,000 EUP
166,000 EUP
Cost per EUP…………………………
Cost assignment and reconciliation
Costs transferred out
Costs of ending work in process
Part 2
Oct. 31
Work in Process Inventory—Assembly …………………..
982,500
Work in Process Inventory—Cutting …………………
982,500
Transfer of goods to next department.
Wild and Shaw, Financial & Managerial Accounting, 8e Solutions Manual: Chapter 16
968
Problem 16-4A (80 minutes)
Part 1
TAMAR CO.—Forming Department
Process Cost Summary – Weighted Average Method
For Month Ended May 31
Costs Charged to Production
Costs of beginning work in process
Direct materials………………………………………
$ 19,800
Conversion……………………………………………
221,940
$ 241,740
Costs incurred this period
Direct materials………………………………………
Conversion……………………………………………
Total costs to account for……………………………
$2,904,480
Unit cost information
Beginning work in process..
Completed & transferred out ………..
Total units to account for…..
Total units accounted for …………….
Equivalent units of production
Direct
Materials
Conversion
Units completed & transferred out…
22,200 EUP
22,200 EUP
Units of ending work in process…..
Direct materials (2,400 x 100%)….
2,400 EUP
Conversion (2,400 x 80%)…………
__________
1,920 EUP
Equivalent units of production……
24,600 EUP
24,120 EUP
Total costs……………………………..
24,600 EUP
24,120 EUP
969
Problem 16-4A (Concluded)
Cost assignment and reconciliation
Costs transferred out
Direct materials (22,200 EUP x $21.00 per EUP)…
$ 466,200
Conversion (22,200 x $99.00 per EUP)…………….
2,197,800
$2,664,000
Direct materials (2,400 EUP x $21.00 per EUP)…..
Conversion (1,920 EUP x $99.00 per EUP)………..
Part 2
May 31
Work in Process Inventory—Assembly …………………..
2,664,000
Work in Process Inventory—Forming ……………….
2,664,000
Transfer of goods to next department.
Part 3
3a. Two major estimates are the: i) overhead allocation rate, and ii)
970
Problem 16-5A (80 minutes)
Part 1
TAMAR CO.—Forming Department
Process Cost Summary – FIFO Method
For Month Ended May 31
Costs Charged to Production
Costs of beginning work in process
Direct materials……………………………………..
$ 19,800
Conversion…………………………………………..
Costs incurred this period
Direct materials……………………………………..
Conversion…………………………………………..
Total costs to account for…………………………..
Unit cost information
Units to account for
Units accounted for
Beginning work in process..
3,000
Completed & transferred out ………..
22,200
Units started this period……
21,600
Ending work in process ……………..
2,400
Total units to account for….
24,600
Total units accounted for ……………
24,600
Equivalent units of production
Direct
Materials
Conversion
Units to complete beginning WIP
Direct materials (3,000 x 0%)…………
Conversion (3,000 x 60%)……………..
Units of ending work in process
Direct materials (2,400 x 100%)………
Equivalent units of production…………
971
Problem 16-5A (Concluded)
Cost per EUP
Direct
Materials
Conversion
Costs incurred this period ………………
Cost assignment and reconciliation
Costs transferred out
Cost of beginning work in process…………………
$ 241,740
Cost to complete beginning work in process
Direct materials (0 EUP x $23.00 per EUP)………
$ 0
Conversion (1,800 EUP x $94.50 per EUP)………
170,100
170,100
Costs of units started and completed this period
Conversion (1,920 EUP x $94.50 per EUP)………
181,440
Part 2
May 31
Work in Process Inventory—Assembly …………………..
2,667,840
Wild and Shaw, Financial & Managerial Accounting, 8e Solutions Manual: Chapter 16
972
Problem 16-6A (45 minutes)
1.
Units in beginning inventory …………………………………..
37,500
Units started and completed …………………………………..
Total units transferred to Assembly ………………………..
2. Equivalent units of production—FIFO
Direct
Equivalent units of production—FIFO
Materials
Conversion
Units to complete beginning work in process
Direct materials (37,500 x 40%)…………………
15,000
Units in ending work in process
3. Cost per equivalent unit of direct materials and conversion—FIFO
Direct
Cost per equivalent unit—FIFO
Materials
Conversion
Costs incurred this period…………………………
$ 505,035
$ 396,568
Wild and Shaw, Financial & Managerial Accounting, 8e Solutions Manual: Chapter 16
973
Problem 16-6A (Concluded)
4. Assignment of costs to output of Cutting department—FIFO
Costs of goods transferred out
Cost of beginning work in process inventory
Direct materials……………………………………
$74,075.00
Conversion…………………………………………
28,493.00
$ 102,568.00
Costs to complete beginning work in process
Direct materials (15,000 EUP x $2.58 per EUP)..
38,700.00
Conversion (22,500 EUP x $2.17 per EUP)……..
Cost of units started and completed this period
Direct materials (150,000 EUP x $2.58 per EUP)…
Conversion (150,000 EUP x $2.17 per EUP)……
Total cost of units started and completed……..
Cost of ending work in process inventory
Direct materials (30,750 EUP x $2.58 per EUP)..
79,335.00
Conversion (10,250 EUP x $2.17 per EUP)……..
22,242.50
Wild and Shaw, Financial & Managerial Accounting, 8e Solutions Manual: Chapter 16
974
Problem 16-7A (80 minutes)
Part 1
DENGO CO.—Roasting Department
Process Cost Summary – FIFO Method
For Month Ended October 31
Costs Charged to Production
Costs of beginning work in process
Direct materials ……………………………………………………….
$ 9,900
Conversion ………………………………………………………………
110,970
$ 120,870
Costs incurred this period
Direct materials ……………………………………………………….
Total costs to account for …………………………………………..
Unit cost information
Units to account for
Units accounted for
Beginning work in process..
3,000
Completed & transferred out ………..
22,200
Units started this period…...
21,600
Ending work in process ………………
2,400
Total units to account for…
24,600
Total units accounted for …………….
24,600
Equivalent units of production
Direct
Materials
Conversion
Units to complete beginning WIP
Units of ending work in process
975
Problem 16-7A (Continued)
Cost per EUP
Direct
Materials
Conversion
Costs incurred this period…………
$ 248,400
$1,082,970
÷ EUP…………………………………..
÷ 21,600
÷ 22,920
Cost per EUP…………………………
$11.50 per
EUP
$47.25 per
EUP
Cost assignment and reconciliation
Direct materials (0 EUP x $11.50 per EUP)………
Costs of units started and completed this period
Direct materials (19,200 EUP x $11.50 per EUP)…
220,800
Conversion (19,200 EUP x $47.25 per EUP)………
907,200
1,128,000
Total cost of goods finished this period…………...
1,333,920
Costs of ending work in process
Conversion (1,920 EUP x $47.25 per EUP)……….
90,720
118,320
Part 2
Oct. 31
Work in Process Inventory—Blending ………………………….
1,333,920
Wild and Shaw, Financial & Managerial Accounting, 8e Solutions Manual: Chapter 16
976
Problem 16-7A (Concluded)
Part 3
If equivalent units of production for a production department’s ending
inventory for October are understated, then total equivalent units of
Wild and Shaw, Financial & Managerial Accounting, 8e Solutions Manual: Chapter 16
977
PROBLEM SET B
Problem 16–1B (45 minutes)
Part 1: Cost of goods transferred and cost of goods sold
(a) Beginning work in process inventory—Mixing ……………
$ 156,000
Direct materials used in production …………………………..
174,000
Direct labor used in production ………………………………………
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
Direct labor used in production ………………………………………
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
Cost of goods sold (c) …………………………………………………….
Transferred-in from Blending ………………………………………….
388,488
978
Problem 16–1B (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 ……………………….
174,000
Work in Process Inventory—Blending ……………………
Raw Materials Inventory …………………………..
44,000
Mar 31
41,200
Raw Materials Inventory …………………………..
41,200
d.
Mar 31
Work in Process Inventory—Mixing ………………………
52,500
Work in Process Inventory—Blending ……………………
Factory Wages Payable …………………………..
74,680
127,180
Incurred direct labor costs.
Mar 31
69,500
Factory Wages Payable …………………………..
Incurred indirect labor costs.
Mar 31
196,680
Cash ……………………………………………………….
196,680
Paid factory payroll.
g.
Mar 31
64,660
Other Accounts ……………………………………………….
Incurred other overhead costs.
h.
Mar 31
Work in Process Inventory—Mixing ……………………….
130,500
Work in Process Inventory—Blending …………………..
Factory Overhead ……………………………………………
44,808
175,308
Applied overhead at 75% of direct materials
costs (Mixing) and 60% of direct labor cost
(Blending).
Wild and Shaw, Financial & Managerial Accounting, 8e Solutions Manual: Chapter 16
Problem 16–1B (continued)
i.
Mar 31
j.
Work in Process Inventory—Blending ……………………
Work in Process Inventory—Mixing ………………….
Transferred costs of partially completed goods.
263,000
263,000
k.
Mar 31
Mar 31
Accounts Receivable …………………………………………….
Wild and Shaw, Financial & Managerial Accounting, 8e Solutions Manual: Chapter 16
980
Problem 16-2B (50 minutes)
For the first process:
Part 1
(a) and (b) Equivalent units with respect to direct materials and conversion
Direct
Equivalent units of production
Materials
Conversion
Units completed & transferred out …………………..
Units of ending work in process ……………………..
Part 2
Cost per equivalent unit of production
Direct
Materials
Conversion
Costs of beginning work in process ………………
$ 58,000
$ 86,400
Costs incurred this period …………………………..
$770,000
Part 3: Assigning product costs to units
Costs transferred out
Cost of ending work in process
981
Problem 16-2B (Concluded)
Part 4
MEMORANDUM
TO:
FROM:
DATE:
RE: Percentage of Completion Error Analysis
For the first process:
If the units in ending inventory are 75% complete instead of 25% with respect
to conversion, the number of equivalent units in ending inventory with respect
to conversion is understated, and the total equivalent units produced for the
Wild and Shaw, Financial & Managerial Accounting, 8e Solutions Manual: Chapter 16
982
Problem 16-3B (75 minutes)
Part 1
BRUN COMPANY—Mixing Department
Process Cost Summary – Weighted Average Method
For Month Ended November 30
Costs Charged to Production
Costs of beginning work in process
Direct materials ……………………………………………………
Conversion ………………………………………………………….
Costs incurred this period
Direct materials ……………………………………………………
Conversion ………………………………………………………….
Total costs to account for ………………………………………
Unit cost information
Units to account for
Units accounted for
Beginning work in process ………….
7,500
Completed & transferred out …………………………..
100,000
Units started this period ………………
104,500
Ending work in process …………………………..
12,000
Total units to account for …………….
112,000
Total units accounted for …………………………..
112,000
Units of ending work in process
Cost per EUP
Direct
Materials
Conversion
983
Problem 16-3B (Concluded)
Cost assignment and reconciliation
Costs transferred out
Direct materials (100,000 EUP x $1.10 per EUP) ……
$110,000
Direct materials (12,000 EUP x $1.10 per EUP) ……..
Part 2
Nov. 30
Work in Process Inventory—Baking ……………………….
1,160,000
1,160,000
Wild and Shaw, Financial & Managerial Accounting, 8e Solutions Manual: Chapter 16
984
Problem 16-4B (80 minutes)
Part 1
SWITCH COMPANY—Cutting Department
Process Cost Summary – Weighted Average Method
For Month Ended January 31
Costs Charged to Production
Costs of beginning work in process
Costs incurred this period
Unit cost information
Units to account for
Units accounted for
Beginning work in process ………….
10,000
Completed & transferred out …..
220,000
Units started this period ……………..
250,000
Ending work in process ………
40,000
Total units to account for …………….
260,000
Total units accounted for ……
260,000
Equivalent units of production
Direct
Materials
Conversion
Units completed & transferred out………
220,000 EUP
220,000 EUP
Cost per EUP
Wild and Shaw, Financial & Managerial Accounting, 8e Solutions Manual: Chapter 16
985
Problem 16-4B (Concluded)
Cost assignment and reconciliation
Costs transferred out
Part 2
Jan. 31
Work in Process Inventory—Assembly …………………..
741,400
Part 3
3a. Two major estimates are the: i) overhead allocation rate, and ii)
percentage of completion for materials and conversion.
3b. Management might want an overhead allocation rate that assigns the
986
Problem 16-5B (80 minutes)
Part 1
SWITCH COMPANY—Cutting Department
Process Cost Summary – FIFO Method
For Month Ended January 31
Costs Charged to Production
Costs of beginning work in process
Direct materials ……………………………………………………
$ 7,500
Conversion ……………………………………………………….
49,840
$ 57,340
Costs incurred this period
Direct materials ……………………………………………………
Conversion ……………………………………………………….
Total costs to account for ………………………………………
Unit cost information
250,000
260,000
Total units accounted for ………
Equivalent units of production
Direct
Materials
Conversion
Units to complete beginning WIP
Direct materials (10,000 x 25%) ………………………
2,500 EUP
Units of ending work in process
Direct materials (40,000 x 50%) ………………………