Ex. 18.9 (concluded)
e. 161,000
Work in Process: Baking Department 161,000
500 equivalent units of mixed materials × $5 per unit
Total costs assigned to work in process on August 31
375 equivalent units of direct materials × $3 per unit
50 equivalent units of conversion × $6 per unit
Units started and completed in May 40,000
Ex. 18.10
a. Beginning work in process, May 1 8,000
Units started by Cutting Department in May 50,000
b. Direct
Input resources required Materials Conversion
To finish beginning inventory in process on May 1:
To start and complete 40,000 units in May 40,000 40,000
To start ending inventory in process on May 31
Direct materials (8,000 units require 0% to complete) 0
Finished Goods Inventory
Cost of beginning inventory on August 1 5,880$
Total cost of units transferred 161,000$
To record the transfer of 11,500 cakes to Finished Goods
Inventory in August:
August mixed materials (10,900 equivalent units × $5)
August direct materials (11,020 equivalent units × $3)
August conversion (11,260 equivalent units × $6)
Ex. 18.10 (concluded)
c. Direct Conversion
Materials Costs
200,000$ 87,200$
d. 288,000
To record the transfer of 48,000 units to the Coating
May conversion (41,600 equivalent units × $2)
Department in May:
Cost of beginning inventory on May 1
May direct materials (40,000 equivalent units × $4)
Total cost of units transferred
Total costs assigned to work in process on May 31
10,000 equivalent units of direct materials × $4 per unit
2,000 equivalent units of conversion × $2 per unit
a.
b. 6,000
Units started and completed in May
Total units in process during May
Beginning work in process, May 1
Ending work in process, May 31
Units transferred to Finished Goods Inventory in May
48,000
One set of cut mats is required for each set coated by the Coating
Beginning work in process, May 1
Units started by Coating Department in May
Cost of direct materials and conversion incurred in May
Work in Process: Coating Department
Ex. 18.11
Equivalent units of resources in May (see part b. )
Cost per equivalent unit of input resource in May
Cost per equivalent unit of input resource
(see part c)
Cost of direct materials incurred in May
Cost of conversion incurred in May
Equivalent units of resources in May
May conversion (40,200 equivalent units × $1.75)
May cut materials (39,000 equivalent units × $6)
May direct materials (41,400 equivalent units × $0.25)
Inventory in May:
To record the transfer of 45,000 mat sets to Finished Goods
Finished Goods Inventory
Input resources required
To finish beginning inventory in process on May
Cost of cut mats transferred in
(see Ex. 18.10, part d)
Direct materials (6,000 units require 40%
Conversion (6,000 units require 20%
Cut materials (9,000 units 100% complete) 9,000
Direct materials (9,000 units 70% complete) 6,300
Conversion (9,000 units 90% complete) 8,100
To start and complete 39,000 units in May
To start ending inventory in process on May 31
Equivalent units of input resources in May
Ex. 18.11 (concluded)
f. 54,000$
1,575
a. 1,500
Add: Ending inventory in Pressing Department, June 30
Total units in process during June
Less: Beginning inventory in Pressing Department, June 1
Units started by Pressing Department in June
b. 1,500
Less: Beginning inventory in Pressing Department, June 1
Units started and completed by Pressing Department in June
c. Direct
Materials Conversion
0
Conversion (300 require 80% to complete) 240
Direct materials (500 units 100% complete) 500
Conversion (500 units 40% complete) 200
Equivalent units of input resources in June
To start and complete 1,200 units in June (see part b)
To start ending inventory in process on June 30
d. Direct Conversion
Materials Costs
Cost of direct materials and conversion incurred in June
Equivalent units of resources in June (see part c )
Cost per equivalent unit of input resource in June
Units transferred to the Painting Department in June
Input resources required
To finish beginning inventory in process on June 1:
Direct materials (300 units require 0% to complete)
Units transferred to the Painting Department in June
9,000 equivalent units of cut materials × $6 per unit
6,300 equivalent units of direct materials × $0.25 per unit
Ex. 18.12
8,100 equivalent units of conversion × $1.75 per unit
Total costs assigned to work in process on May 31
Ex. 18.12 (concluded)
e. 60,000
Work in Process: Painting Department 60,000
200 equivalent units of conversion × $25 per unit
500 equivalent units of direct materials × $15 per unit
Total costs assigned to Pressing Department on June 30
a. Direct Conversion
Materials Costs
50,400$ 36,000$
Direct materials (300 equivalent units × 40%) ÷ 120
Cost per equivalent unit carried forward from August
Costs in beginning inventory, September 1
Work in Process: Pressing Department
Ex. 18.14
Equivalent units in process, September 1:
The recommendation to eliminate the company’s current work in process accounts and charge all
manufacturing costs directly to Finished Goods Inventory makes sense for this company. If we assume
that the company operates 300 days per year, daily production is 100,000 pencils (30,000,000 pencils per
Ex. 18.13
June conversion (1,440 equivalent units × $25) 36,000
Total cost of units transferred 60,000$
To record the transfer of 1,500 units to the Painting
Department in June:
Cost of beginning inventory on June 1
June direct materials (1,200 equivalent units × $15)
Ex. 18.14 (concluded)
b.
Direct
Materials Conversion
180
Direct Conversion
Materials Costs
Equivalent units in September (see step 1 )
Cost per equivalent unit in September
789,750$ 787,500$
c.
a. 58,000
Units in process on February 1
Total units in process during February
Less: Units started in February
2,000
Ex. 18.15
The cost figures computed in parts aand bconvey to management that the cost of input
resources in the Bonding Department have increased in September above their August
Add: Units in process on February 28
Units transferred out of the Blending Department in February
Step 1: Compute input resources required in September
Input resources required
Step 2: Compute equivalent costs per unit in September
Cost of direct materials and conversion incurred in September
To finish beginning inventory in process on September 1:
Direct materials (300 units require 60% to complete)
Conversion (300 units require 75% to complete)
Equivalent units of input resources in September
To start and complete 1,200 units in September*
To start ending inventory in process on September 30
Ex. 18.15 (continued)
b. 58,000
c. 12,000$
÷ 6,000
2$
6$
6$
Start inventory in process on February 28 (2,000 units × 20%)
Conversion costs incurred in February
Cost per equivalent unit of conversion from January
6,000 units in process × 70% complete
Conversion costs carried forward from January
Equivalent units of conversion carried forward from January
Equivalent units of conversion in February
Less: Units of conversion used in February to
Start and complete 52,000 units (see part b)
Percentage required to complete February 1 inventory
Units in inventory on February 1
Equivalent units of conversion carried forward from January:
Cost per equivalent unit of conversion in February
Equivalent units required to complete inventory on February 1
Units transferred out of the Blending Department in February
Direct material costs in beginning inventory, February 1
Units of inventory on February 1 (materials 100% complete)
Cost per equivalent unit of direct material from January
Cost per equivalent unit of conversion from January*
Less: Units in process on February 1 (see part a)
Units started and completed in February
Ex. 18.15 (concluded)
d. February cost per equivalent unit of direct material* 3$
*Computations:
Step 1: Compute equivalent units of direct material
Step 2: Compute cost per equivalent unit
SOLUTIONS TO PROBLEMS SET A
20 Minutes, Easy
PROBLEM 18.1A
BRITE IDEAS
a.
Conversion
(900 units require 10% to complete) 90
4,100 4,100 4,100
Body materials (1,100 units 100% complete) 1,100
Wiring materials (1,100 units 0% complete) 0
4,600
Beginning inventory in process, July 1
Units transferred out in July
Step 1: Determine flow of physical goods
Step 1: Determine flow of physical goods
To start and complete 4,100 units in June
To start ending inventory in process on June 30:
5,000
(900 units require 0% to complete) 0
(900 units require 0% to complete) 0
Units transferred out in June
Beginning inventory in process, June 1
Units started and completed in June
Step 2: Determine equivalent units
To finish beginning inventory, June 1:
PROBLEM 18.1A
BRITE IDEAS (concluded)
Body Wiring
Materials Materials Conversion
Body materials
(1,100 units require 0% to complete) 0
Step 2: Determine equivalent units
Input resources required
To finish beginning inventory, July 1:
Wiring materials
Conversion
To start and complete 3,500 units in July
To start ending inventory in process on July 31:
30 Minutes, Easy
PROBLEM 18.2A
SUN APPLIANCE
a. (1) $50 [($160,000 + $15,000 + $25,000) ÷ 4,000 units]
b.
In evaluating the overall efficiency of the Motor Department, management would look at
30 Minutes, Medium PROBLEM 18.3A
SUN APPLIANCE
Part I. Physical Flow Total Units
Inputs:
• Beginning WIP -0-
• Started 4,000
Part II. Equivalent Units Direct Materials Conversion
Based on monthly input:
• Beginning WIP -0- -0-
• Units started 4,000 4,000
Based on monthly output:
• Units completed 4,000 4,000
• Ending WIP -0- -0-
Part III. Cost Per Equivalent Unit Total Unit Cost Direct Materials
Conversion
Costs from Tub Department $160,000 $40,000
Costs from Motor Department 80,000 32,000
TOTAL $240,000 $72,000
Divide by equivalent units ÷ 4,000 ÷ 4,000
Costs per equivalent unit $78.00 $ 60.00 $ 18.00
Part IV. Total Cost Assignment Total Costs Direct Materials
Conversion
Costs to account for:
• Cost of beginning WIP $ -0-
• Cost added during the period 312,000 240,000 72,000
Total cost to account for $312,000 $240,000 $72,000
Costs accounted for:
• Cost of goods transferred
Beginning WIP last period $ -0- $ -0- $ -0-
Total cost transferred $312,000 $240,000 $72,000
• Add ending WIP -0- -0- -0-
Total cost accounted for $312,000 $240,000 $72,000
Outputs:
• Units completed 4,000
• Ending WIP -0-
PROBLEM 18.4A
TOLL HOUSE
a. Work in Process: Mixing Dept. 12,600
Materials Inventory 3,600
Direct Labor 3,000
Manufacturing Overhead 6,000
Summary of costs incurred in mixing 14,000 lbs.
of cookie dough in May. Cost per lb., $0.90
($12,600 ÷ 14,000 lbs.).
d.
May 31 Work in Process: Packaging Dept. 26,400
Work in Process: Baking Dept. 26,400
To record transfer cost of 4,000 gross of cookies sent
to the packaging department in May.
e. Work in Process: Packaging Dept. 4,320
Materials Inventory 1,020
Direct Labor 2,100
Manufacturing Overhead 1,200
packaging 48,000 boxes of cookies. Cost per box,
f.
Work in Process: Packaging Dept. 30,720
To record the completion of 48,000 boxes of
cookies in May. Cost per box, $0.64
($30,720 ÷ 48,000 boxes).
g.
Management will use the unit costs appearing in entries a, c, and e, in separately
30 Minutes, Medium
b.
Work in Process: Mixing Dept. 12,600
to the baking dept. during May.
c. Work in Process: Baking Dept. 13,800
Direct Labor 1,800
Manufacturing Overhead 12,000
Summary of costs incurred in baking department
in baking 4,000 gross of cookies in May.
Cost per gross, $3.45 ($13,800 ÷ 4,000 gross).
35 Minutes, Medium
PROBLEM 18.5A
BADGERSIZE COMPANY
a.
Direct
Materials Conversion
0
b.
Direct Conversion
Materials Costs
150,000$ 252,000$
Cost per equivalent unit in August ($7 per unit)
Equivalent units consumed in August (see part a. )
Total cost incurred in August
Input resources required
To finish beginning inventory, August 1:
Direct materials (20,000 units require 0% to complete)
Conversion (20,000 units require 80% to complete)
Total equivalent units in August
Direct materials (10,000 units 100% complete)
30 Minutes, Medium PROBLEM 18.6A
BADGERSIZE COMPANY
a. Production Cost Report
Part I. Physical Flow Total Units
Inputs:
• Beginning WIP 20,000
• Started 50,000
Units to account for 70,000
Part II. Equivalent Units Direct Materials Conversion
Consumed
Based on monthly input:
• Finish BWIP -0- 16,000
• Start new units 50,000 47,000
Equivalent units of input 50,000 63,000
Based on monthly output:
• T ransferred units 40,000 56,000
• EWIP units 10,000 7,000
Equivalent units of output 50,000 63,000
Part III. Cost Per Equivalent Unit Total Unit Cost Direct Materials
Conversion
Input costs in August $150,000 $252,000
Equivalent units, August ÷50,000 ÷63,000
Costs per equivalent unit, Aug. $7.00 $ 3.00 $ 4.00
Forming Department, Month of August
Outputs:
• Units completed 60,000
• Ending WIP 10,000
Units accounted for 70,000
PROBLEM 18.6A
BADGERSIZE COMPANY (concluded)
Total Costs Direct Materials
Conversion
$104,000
402,000
$506,000
b.
Costs accounted for:
• Cost of goods transferred
Total cost to account for
Part IV. Total Cost Assignment
Costs to account for
• Cost of beginning WIP
• Cost added during the period
Management can compare production cost reports from month to month to help control
costs and assess efficiency of their processes. For example, the equivalent units can be
$104,000 $ 80,000 $ 24,000
$448,000 $200,000 248,000
$506,000 $230,000 $276,000
Total cost transferred
Total cost accounted for
50 Minutes, Strong
PROBLEM 18.7A
HOUND HAVENS
a.
(1)
2,800
48,200
51,000
(2) Direct
Materials Conversion
280
1,960
44,800 44,800
2,720
47,800 47,440
To start units in process on April 30:
Equivalent units of resources in April
Direct materials (3,400 units 80% complete)
To start and complete 44,800 units in April
(3) Direct Conversion
Materials Costs
669,200$ 521,840$
Equivalent units in April (see part 2 )
Work in Process: Finishing Department
Cost per equivalent unit in April
44,520$
631,120
514,360
April conversion (46,760 equivalent units × $11)
To finish units in process on April 1:
Conversion (2,800 units require 70% to complete)
Units started in April
Units in process during April
Requirements for the Molding Department in April
Flow of physical units: Molding Department
Units in beginning inventory, April 1
Input resources
Direct materials (2,800 units require 10% to complete)
Cost per equivalent unit in April
Costs incurred by Molding Department in April
April direct materials (45,080 equivalent units × $14)
Cost of beginning inventory, April 1 ($33,340 + $11,180)
Department in April:
To record the transfer of 47,600 units to the Finishing
47,600
44,800
Units in beginning inventory, April 1
Units started and completed in April
Units in ending inventory, April 30
Units transferred to Finishing Department in April
PROBLEM 18.7A
HOUND HAVENS (continued)
(5)
38,080$
b.
(1)
5,000
47,600
52,600
50,600
45,600
Units transferred to Finishing Dept. in April
Units in process during April
Units in beginning inventory, April 1
Units started and completed in April
(2) Molding Direct
Materials Materials Conversion
Molding materials
(5,000 units require 0% to complete) 0
Direct materials
(5,000 units require 70% to complete) 3,500
Conversion
(5,000 units require 60% to complete) 3,000
45,600 45,600 45,600
To start and complete 45,600 units in April
To start units in process on April 30:
47,600 49,600 49,200
(3) Molding Direct Conversion
Materials Materials Costs
Costs charged to Finishing Department
in April* 1,190,000$ 496,000$ 147,600$
Equivalent units in April [see part (2) ]
Cost per equivalent unit in April
Equivalent units of resources in April
To finish units in process on April 1:
Units in beginning inventory, April 1
Units started in April (see part a (1) )
Cost per equivalent unit in April
Input resources
Work in Process: Molding Department, April 30
Direct materials (2,720 equivalent units × $14)
Requirements for the Finishing Dept. in April
Flow of physical units: Finishing Department
7,480
45,560$
Conversion (680 equivalent units × $11)
Ending inventory in process, April 30
PROBLEM 18.7A
HOUND HAVENS (concluded)
(4) 1,922,800
Work in Process: Finishing Department 1,922,800
(5)
50,000$
56,800$
Conversion (600 equivalent units × $3)
Ending inventory in process, April 30
Direct materials (500 equivalent units × $10)
Finished Goods Inventory
To record the transfer of 50,600 units
Work in Process: Finishing Department,
Molding materials (2,000 equivalent units × $25)
to the Finished Goods
April 30
Total cost of units transferred 1,922,800$
Inventory in April:
50 Minutes, Strong
PROBLEM 18.8A
WILSON DYNAMICS
a.
1.
5,000
75,000
2. Direct
Materials Conversion
0
3,000
67,000 67,000
8,000
6,000
75,000 76,000
Direct materials (8,000 units 100% complete)
Conversion (8,000 units 75% complete)
Equivalent units of resources in July
3. Direct Conversion
Materials Costs
675,000$ 608,000$
Cost per equivalent unit in July
Equivalent units in July [see part (2) ]
4. 1,224,000
Work in Process: Forging Department 1,224,000
61,000$
Total cost of units transferred
July conversion (70,000 equivalent units × $8)
July direct materials (67,000 equivalent units × $9)
5. Work in Process: Forging Department, July 31
Requirements for the Forging Department in July
Flow of physical units: Forging Department
Units in beginning inventory, July 1
Units started in July
To finish units in process on July 1:
Input resources
To start and complete 67,000 units in July
To start units in process on July 31:
Conversion (5,000 units require 60% to complete)
Direct materials (5,000 units require 0% to complete)
Work in Process: Assembly Department
To record the transfer of 72,000 units to the Assembly
Department in July:
Cost of beginning inventory, July 1 ($45,000 + $16,000)
Costs incurred by Forging Department in July
Cost per equivalent unit in July
80,000
72,000
67,000
Units transferred to Assembly Department in July
Units in process during July
Units in ending inventory, July 31
Units in beginning inventory, July 1
Units started and completed in July