1021
Exercise 16-13 (20 minutes)
a. Equivalent units of production: Weighted-average
Direct Materials
Conversion
Units
Percent
Complete
EUP
Percent
Complete
EUP
Completed and transferred out ……..
7,000
100%
7,000
100%
7,000
Ending work in process …………….
1,000
100%
Direct Materials
Conversion
Costs of beginning work in process ………….
$ 2,400
$ 1,600
Costs added this period …………………………..
Total costs ……………………………………………….
$ 9,600
c.
Cost assignment—Weighted-average
Completed and transferred out
EUP
Cost per EUP
Total Cost .
Direct materials ……………………..
7,000
$1.20
$ 8,400
Conversion …………………………..
7,000
$2.50
17,500
$25,900
Direct materials ……………………..
Conversion …………………………..
1022
Exercise 16-14 (30 minutes)
ASH COMPANY—Molding Department
Production Cost Report – Weighted Average Method
For Month Ended July 31
Units to account for:
Units accounted for:
Beginning work in process ….
2,000
Completed and transferred out ……
32,000
Units started this period ………
Ending work in process ……………
Direct Materials
Conversion
Cost per EUP
Direct Materials
Conversion
Costs of beginning work in process ……….
$ 18,550
$ 2,280
Costs added this period …………………………
357,500
188,670
Total costs …………………………………………….
$ 190,950
34,500 EUP
33,500 EUP
Cost Assignment
EUP
Cost per EUP
Total Cost
Completed and transferred out
Direct materials …………………………..…..
32,000
$10.90
$348,800
Conversion ……………………………………..
32,000
Ending work in process
Direct materials …………………………..…..
Conversion ……………………………………..
1023
Exercise 16-15A (40 minutes)
ASH COMPANY—Molding Department
Production Cost Report – FIFO Method
For Month Ended July 31
Units to account for:
Units accounted for:
Beginning work in process ….
2,000
Beginning work in process ………….
2,000
Units started this period ………
32,500
Units started and completed ……..
30,000
Ending work in process ……………
Conversion
30,000
Equivalent Units of Production …..
Cost per EUP
Direct Materials
Conversion
Costs added this period …………………………
$ 357,500
$ 188,670
÷ Equivalent units of production …………….
32,500 EUP
33,100 EUP
Cost per equivalent unit of production ……
$11.00 per EUP
$5.70 per EUP
Cost Assignment
EUP
Cost per EUP
Total Cost
Beginning work in process …………………
$ 20,830
To complete beginning work in process
0
Conversion ………………………………………
Started and completed
Direct materials ………………………………..
330,000
Conversion ………………………………………
501,000
Completed and transferred out ………….
530,950
Ending work in process
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
1024
Exercise 16-16 (40 minutes)
ELLIOTT COMPANY—First Department
Production Cost Report – Weighted Average Method
For Month Ended March 31
Units to account for:
Units accounted for:
Beginning work in process ….
2,000
Completed and transferred out ……
17,000
Units started this period ………
20,000
Ending work in process ……………
5,000
Total units to account for …….
22,000
Total units accounted for ………….
22,000
Conversion
22,000 EUP
18,750 EUP
Cost per EUP
Direct Materials
Conversion
Costs of beginning work in process ……….
$ 2,500
$ 6,360
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 …………………………..…..
17,000
$7.75
$131,750
Conversion ……………………………………..
17,000
$25.92
440,640
$572,390
Ending work in process
Direct materials …………………………..…..
$7.75
Conversion ……………………………………..
$25.92
1025
Exercise 16-17 (40 minutes)
OSLO COMPANY—First Department
Production Cost Report – Weighted Average Method
For Month Ended May 31
Units to account for:
Units accounted for:
Beginning work in process ….
4,000
Completed and transferred out ……
13,000
Units started this period ………
Ending work in process ……………
Conversion
Cost per EUP
Direct Materials
Conversion
Costs of beginning work in process ……….
$ 2,880
$ 5,358
Costs added this period …………………………
197,120
234,992
Total costs …………………………………………….
$ 200,000
$ 240,350
÷ Equivalent units of production …………….
16,000 EUP
13,750 EUP
Cost per equivalent unit of production ……
Cost Assignment
Completed and transferred out
Ending work in process
Exercise 16-18 (10 minutes)
1.
Raw Materials Inventory ………………………………….
80,000
2.
Work in Process Inventory—Roasting ……………..
42,000
3.
Factory Overhead ……………………………………………
22,500
Exercise 16–19 (10 minutes)
1.
Work in Process Inventory—Roasting ……………..
42,000
Work in Process Inventory—Blending ……………..
33,000
2.
Factory Overhead ……………………………………………
20,000
Exercise 16–20 (5 minutes)
1.
Factory Overhead ……………………………………………
40,000
2.
Work in Process Inventory—Roasting ……………..
46,200
Work in Process Inventory—Blending ……………..
36,300
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
1027
Exercise 16–21 (10 minutes)
2.
Jan. 31
Work in Process Inventory—Blending ……………
120,000
Work in Process Inventory—Bottling ……………..
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
Exercise 16–22 (20 minutes)
1.
a.
Work in Process Inventory—Cooking ………………
18,000
Work in Process Inventory—Bottling ………………
8,200
Raw Materials Inventory ……………………………..
26,200
Work in Process Inventory—Cooking ………………
12,000
Work in Process Inventory—Bottling ………………
6,800
Factory Wages Payable ………………………………
18,800
c.
Work in Process Inventory—Cooking ………………
15,000
Work in Process Inventory—Bottling ………………
8,500
Factory Overhead …………………………………….
23,500
2.
a.
Work in Process Inventory—Bottling ………………
42,000
Work in Process Inventory—Cooking ………….
42,000
67,000
Work in Process Inventory—Bottling ………….
67,000
3. a.
Work in Process Inventory—Cooking
Beginning balance
0
Direct materials
18,000
Conversion
27,000
Transferred out
Beginning balance
Transferred in
42,000
Direct materials
Conversion
15,300
Transferred out
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
1029
Exercise 16–23 (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 …………..
104,000
Factory Wages Payable …………………………
130,000
Direct labor used in production.
3.
Work in Process Inventory—Shredding ……….
45,500
Work in Process Inventory—Bagging …………..
182,000
Factory Overhead ………………………………….
227,500
Overhead applied: 175% of direct labor cost.
4.
Work in Process Inventory—Bagging …………..
595,000
Work in Process Inventory—Shredding ….
595,000
5.
Finished Goods Inventory …………………………...
580,000
Work in Process Inventory—Bagging ………
580,000
6.
Accounts Receivable …………………………………..
950,000
Sales ……………………………………………………..
950,000
7.
Cost of Goods Sold ……………………………………..
540,000
Finished Goods Inventory ………………………
540,000
Record cost of sales.
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
Exercise 16-24 (30 minutes)
1. Cost of goods transferred out and cost of goods sold
WIP—
Weaving
WIP—
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
540,000
Total costs—Weaving ………………………
2,700,000
Less ending WIP inventory—Weaving .
3,915,000
Less ending WIP inventory—Sewing .
3,215,000
Less ending inventory—Finished goods .
2. Journal entries
June 30
Work in Process Inventory—Sewing ………..
2,370,000
(a)
Work in Process Inventory—Weaving….
2,370,000
Transferred products from weaving to sewing.
June 30
3,215,000
Work in Process Inventory—Sewing ……
3,215,000
sewing to finished goods inventory.
June 30
Accounts Receivable ………………………………
4,000,000
(c)
Sales …………………………………………………
4,000,000
Record sales on credit.
June 30
Cost of Goods Sold …………………………………
3,275,000
Finished Goods Inventory ………………….
3,275,000
Record cost of goods sold.
1031
Exercise 16–25 (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 ………..
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 ……………………………………
1,224,000
Factory Wages Payable ………………………
1,224,000
Used indirect labor.
Factory Overhead ……………………………………
Cash …………………………………………………..
Incurred other overhead costs.
g.
Work in Process Inventory—Sewing ………..
Factory Overhead ……………………………….
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
1032
Exercise 16–26 (20 minutes)
[Note: Solution key is on the following page.]
Punching
Process
$6,000
Bending
$12,750
Warehouse
Beginning Work in
Process
$7,500
Direct
Materials
$60,000
Direct
Labor
$12,000
Factory
Overhead
$15,000
Beginning Work in
Process
$9,750
Direct
Materials
(3) $83,250
Direct
Labor
$30,750
Factory
Overhead
$36,900
Beginning
Finished Goods
$18,000
Cost of Goods Available
For Sale
(5) $254,400
Ending Finished
Goods
(6) $22,500
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
Exercise 16–26 (Continued)
Key to solution of flowchart:
(1)
Beginning Work in Process Inventory—Punching ……
$ 7,500
Direct materials added …………………………………………
$ 60,000
Direct labor added ………………………………………………
Factory overhead added ………………………………………
Total manufacturing costs added ………………………….
87,000
Total costs of Work in Process—Punching …………….
$ 94,500
(2)
Total costs of Work in Process—Punching …………….
$ 94,500
Less ending Work in Process—Punching ………………
6,000
Costs transferred from Punching to Bending ………….
$ 88,500
(3)
Beginning Work in Process—Bending …………………..
$ 9,750
Total costs added ……………………………………………….
[?]
Total costs of Work in Process—Bending ………………
$249,150
Total costs added in Bending = $249,150 – $9,750 = $239,400
Direct materials added …………………………………………
$ [?]
Direct labor added ………………………………………………
Factory overhead added ………………………………………
Costs transferred from Punching ………………………….
88,500
Total costs added in Bending (from above) ……………
$239,400
Direct materials added = $239,400-$30,750-$36,900-$88,500 = $83,250
(4)
Total costs in process in Bending department ………..
$249,150
Ending Work in Process Inventory—Bending ………….
12,750
Costs transferred to Finished Goods Inventory ……….
$236,400
(5)
Beginning Finished Goods Inventory …………………….
$ 18,000
Add costs transferred to Finished Goods Inventory …
236,400
Cost of goods available for sale …………………………...
$254,400
(6)
Cost of goods available for sale …………………………...
$254,400
Less ending Finished Goods Inventory ………………….
[?]
Cost of goods sold ……………………………………………..
$231,900
1034
Exercise 16-27 (10 minutes)
1.
Finished Goods Inventory ………………………………
135,600
Work in Process Inventory—Assembly ………
2.
Accounts Receivable ……………………………………..
315,000
Sales ………………………………………………………..
315,000
Cost of Goods Sold ………………………………………..
175,000
Exercise 16–28 (10 minutes)
1.
Current month
Prior month
Costs transferred to finished goods …
$168,000
$165,750
Units transferred to finished goods ….
Cost per completed unit …………………..
2. The cost per completed unit decreased by $0.50 in the current month as
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
1035
Exercise 16–29A (15 minutes)
1. Beginning inventory is 100% complete with respect to direct materials.
Ending inventory is 100% complete with respect to direct materials.
Equivalent units of production: FIFO method
Direct Materials
Units
Percent
Added
EUP
Beginning work in process ………….
30,000
0%
0
20,000
2. Beginning inventory is 30% complete with respect to direct materials.
Ending inventory is 80% complete with respect to direct materials.
Equivalent units of production: FIFO method
Direct Materials
Units
Percent
Added
EUP
Beginning work in process ………….
30,000
70%
21,000
20,000
80%
3. Beginning inventory is 60% complete with respect to direct materials.
Ending inventory is 20% complete with respect to direct materials.
Equivalent units of production: FIFO method
Direct Materials
Units
Percent
Added
EUP
Beginning work in process …………
30,000
40%
12,000
20,000
20%
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
1036
Exercise 16-30 (15 minutes)
1. Cost per unit = Fabrication process costs + Cost of logo
Production cost
Screen-printed
Embroidered
Direct materials ……………..
$12.00
$12.00
Conversion ……………………
2. Selling price per unit = Cost per unit + Markup
Selling price
Screen-printed
Embroidered
Cost per unit………………….
$20.00
$28.00
Markup (30%) ……………….
$26.00
3. Computation of process yield percent
Number of non-defective sweatshirts produced ……….
4,900
98%
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
1037
PROBLEM SET A
Problem 16-1A (40 minutes)
Part 1. Equivalent units of production: Weighted-average
Direct Materials
Conversion
Units
Percent
Complete
EUP
Percent
Complete
EUP
880,000
754,000
Part 2. Cost per equivalent unit of production: Weighted-average
Direct Materials
Conversion
Costs of beginning work in process ………….
$ 420,000
$ 139,000
Costs added this period …………………………..
Total costs ……………………………………………….
$2,640,000
$3,393,000
Part 3.
Cost assignment—Weighted-average
EUP
Cost per EUP
Total Cost .
Completed and transferred out
Direct materials ……………………..
700,000
$3.00
$2,100,000
$5,250,000
Conversion …………………………..
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
Problem 16-2A (45 minutes)
Part 1
FAST COMPANY—Cutting Department
Production Cost Report – Weighted Average Method
For Month Ended October 31
Units to account for:
Units accounted for:
Beginning work in process ….
30,000
Completed and transferred out ……
150,000
Units started this period ………
140,000
Ending work in process ……………
Direct Materials
Conversion
Equivalent Units of Production (EUP)
Units
% Complete
EUP
% Complete
EUP
Completed and transferred out ..
150,000
100%
150,000
100%
150,000
Ending work in process …………..
20,000
100%
20,000
80%
16,000
Equivalent Units of Production ..
170,000 EUP
166,000 EUP
Cost per EUP
Conversion
Costs of beginning work in process ……….
Costs added this period …………………………
Total costs …………………………………………….
÷ Equivalent units of production …………….
Cost per equivalent unit of production ……
Cost Assignment
EUP
Cost per EUP
Total Cost
Completed and transferred out
Direct materials …………………………..…..
150,000
$0.95
$142,500
Conversion ……………………………………..
150,000
$5.60
840,000
$ 982,500
Ending work in process
Direct materials …………………………..…..
$0.95
Conversion ……………………………………..
$5.60
89,600
Part 2
Oct. 31
Work in Process Inventory—Assembly …………
982,500
Work in Process Inventory—Cutting ………..
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
Problem 16-3A (80 minutes)
Part 1
TAMAR COMPANY—Forming Department
Production Cost Report – Weighted Average Method
For Month Ended May 31
Units to account for:
Units accounted for:
Beginning work in process ….
3,000
Completed and 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
Conversion
Cost per EUP
Direct Materials
Conversion
Costs of beginning work in process ……….
$ 19,800
$ 221,940
Costs added this period …………………………
496,800
2,165,940
Total costs …………………………………………….
$ 516,600
$2,387,880
÷ Equivalent units of production …………….
24,600 EUP
24,120 EUP
Cost per equivalent unit of production ……
$21.00 per EUP
$99.00 per EUP
Cost Assignment
EUP
Cost per EUP
Total Cost
Completed and transferred out
Ending work in process
Part 2
May 31
Work in Process Inventory—Assembly ……….
2,664,000
Wild and Shaw, Financial and Managerial Accounting 9e Solutions Manual: Chapter 16
1040
Problem 16-4AA (80 minutes)
Part 1
TAMAR COMPANY—Forming Department
Production Cost Report – FIFO Method
For Month Ended May 31
Units to account for:
Units accounted for:
Beginning work in process ….
3,000
Beginning work in process ………….
3,000
Units started this period ………
21,600
Units started and completed ……..
19,200
Ending work in process ……………
Direct Materials
Conversion
Cost per EUP
Direct Materials
Conversion
Costs added this period …………………………
$ 496,800
$2,165,940
÷ Equivalent units of production …………….
÷ 21,600
÷ 22,920
Cost per equivalent unit of production ……
$23.00 per EUP
$94.50 per EUP
Cost Assignment
EUP
Cost per EUP
Total Cost
To complete beginning work in process
$23.00
$ 0
Conversion ………………………………………
$94.50
170,100
Started and completed
Direct materials ………………………………..
19,200
$23.00
441,600
Conversion ………………………………………
19,200
$94.50
1,814,400
Completed and transferred out ………….
Ending work in process
$23.00
$94.50