1081
Exercise 20–11 (continued)
2.
Cost assignment and reconciliation – FIFO
Cost of 60,000 units from beginning inventory
$ 167,066
Materials to complete (24,000 EUP x $2.58 per EUP)
61,920
Conversion to complete (36,000 EUP x $2.16 per EUP)
77,760
Total cost of 60,000 units from beginning inventory
Costs of units started and completed
Direct materials (240,000 EUP x $2.58 per EUP)
Conversion costs (240,000 EUP x $2.16 per EUP)
Total cost of 240,000 units started and completed
Costs of units in ending inventory
Direct materials (65,600 EUP x $2.58 per EUP)
Conversion costs (24,600 EUP x $2.16 per EUP)
53,136
Total cost of 82,000 units in ending inventory
$1,666,730
$167,066
Direct materials – current period
Conversion costs – current period
Total costs to be assigned
$1,666,730
Beg. Inv
Conv
Transferred out
End. Inv.
1082
Exercise 20-12 (30 minutes)
ASHAD COMPANY
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) ……………………………….
Total costs to account for …………………………………………………………………
$567,000
Unit Information
Units to Account For
Units Accounted For
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 …………………………..
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) …………………………..
Cost of ending work in process
1083
Exercise 20-13 (40 minutes)
ASHAD COMPANY
Process Cost Summary – FIFO Method
For Month Ended July 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
Total units accounted for …………….
Equivalent units of production
Direct
Materials
Conversion
Units to complete beginning WIP
1084
Exercise 20-13 (Concluded)
Cost per EUP
Direct
Materials
Conversion
Costs incurred this period…………
$ 357,500
$ 188,670
Cost assignment and reconciliation
Costs transferred out
Accounts Receivable …………………………………………….
Cost of Goods Sold ………………………………………………
Exercise 20-14 (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 ……………………………………
Direct labor ………………………………………….
$3,275,000
Part 2: Summary journal entries.
June 30
Work in Process Inventory—Sewing ……………………..
2,370,000
1086
Exercise 20-15 (25 minutes)
Summary journal entries (all dated June 30)
a.
Raw Materials Inventory ………………………………………..
500,000
Accounts Payable ……………………………………………
500,000
Purchased raw materials.
240,000
Used direct materials.
c.
120,000
Raw Materials Inventory …………………………..
120,000
Used indirect materials.
360,000
Factory Wages Payable …………………………..
e.
Factory Wages Payable …………………………..
Used indirect labor.
156,000
Other Accounts ……………………………………………….
Incurred other overhead costs.
960,000
540,000
Factory Overhead …………………………..………………..
Cash ……………………………………………………….
Paid total payroll.
1087
Exercise 20-16 (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
Costs incurred this period
Total costs to account for ………………………………..
Unit information
Units to account for
Units accounted for
Beginning work in process …………………………..
Units started this period …………………………..
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
22,000 EUP
18,750 EUP
Cost per EUP
Direct
Materials
Conversion
Cost of beginning work in process..
22,000 EUP
18,750 EUP
1088
Exercise 20-16 (continued)
Cost assignment and reconciliation
Costs transferred out
Costs of ending work in process
Exercise 20-17 (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
Costs incurred this period
Beginning work in process ………….
Units started this period ………………
1089
Exercise 20-17 (Concluded)
Equivalent units of production
Direct
Materials
Conversion
Units completed & transferred out…
13,000 EUP
13,000 EUP
Units of ending work in process
3,000 EUP
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……………
16,000 EUP
13,750 EUP
Cost assignment and reconciliation
Costs transferred out
Costs of ending work in process
Exercise 20-18 (10 minutes)
Equivalent units of production—FIFO
Units of
Percent
Equivalent
EUP (for materials and conversion)
Product
Added
Units
Beginning work in process ………….
1090
Exercise 20-19 (20 minutes)
[Note: Solution key is on the following page.]
Punching
Bending
Warehouse
$18,000
(6) $22,500
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
1091
Exercise 20-19 (Continued)
Key to solution of flowchart:
(1)
Beginning work in process in punching
$ 7,500
Direct materials added
$ 60,000
Direct labor added
Factory overhead added
Total manufacturing costs added
(2)
Total costs in process in punching department
$ 94,500
Less ending work in process
(3)
Beginning work in process in bending
$ 9,750
Total costs added
Total costs added = $249,150 – $9,750 = $239,400
Direct materials added
Direct labor added
Factory overhead added
Costs transferred from punching
(4)
Total costs in process in bending department
$249,150
Ending work in process
(5)
Beginning Finished Goods inventory
$ 18,000
Add costs transferred to finished goods
(6)
Cost of goods available for sale
$254,400
Less ending inventory
1092
Exercise 20-20 (30 minutes)
1.
Units to account for
Units Accounted For
2. and 3.
Equivalent Units of Production (EUP)
Direct
Materials
Conversion
Units of ending work in process………
4. and 5.
Cost per EUP
Direct
Materials
Conversion
Costs of beginning work in process…..
$ 45,000
$ 56,320
1093
Exercise 20-20 (concluded)
6.
Costs transferred out
Direct materials [$14.00 per EUP x 23,000 EUP] ….
Conversion [$15.40 per EUP x 23,000 EUP] ………..
Total transferred out ………………………………………….
7.
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 …………………………..
Exercise 20-21 (10 minutes)
1.
Raw Materials Inventory ………………………………………..
80,000
2.
Work in Process Inventory ……………………………………..
42,000
3.
22,500
1094
Exercise 20-22 (10 minutes)
1.
Work in Process Inventory ……………………………………..
75,000
Factory Overhead …………………………………………………..
20,000
3.
Factory Wages Payable ………………………………………….
95,000
Exercise 20-23 (5 minutes)
1.
Factory Overhead ………………………………………………….
38,750
2.
Work in Process Inventory ……………………………………..
82,500
Exercise 20-24 (5 minutes)
1.
Finished Goods Inventory ………………………………………
135,600
2.
Accounts Receivable ……………………………………………..
175,000
1095
Exercise 20-25 (25 minutes)
1.
Oct. 31
Work in Process Inventory ……………………………………..
522,000
Raw Materials Inventory …………………………..
Oct. 31
Work in Process Inventory ……………………………………..
130,000
Factory Wages Payable …………………………..
Oct. 31
Work in Process Inventory ……………………………………..
227,500
Factory Overhead …………………………………………….
Oct. 31
595,000
Work in Process Inventory …………………………..
Oct. 31
Accounts Receivable ……………………………………………..
950,000
Sales ……………………………………………………….
Oct. 31
540,000
Finished Goods Inventory …………………………..
1096
Exercise 20-26 (25 minutes)
a. Purchased raw materials on credit at a cost of $52,000.
b. Used direct materials costing $42,000 in production.
Exercise 20-27 (10 minutes)
A hybrid costing system contains features of both process costing and job
order costing. A hybrid system of processes requires a hybrid costing
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 20
1097
PROBLEM SET A
Problem 20-1A (45 minutes)
Part 1: Cost of goods transferred and cost of goods sold
Beginning work in process inventory …………………………..
$ 435,000
Direct materials used in production …………………………..
157,500
Part 2: Summary journal entries
a.
May 31
Raw Materials Inventory ………………………………………..
250,000
May 31
Work in Process Inventory …………………………..
May 31
Direct labor used in production ………………………………………
780,000
Beginning finished goods inventory …………………………..
Less ending finished goods inventory …………………………..
1098
Problem 20-1A (Continued)
d.
May 31
Work in Process Inventory …………………………..
780,000
Factory Wages Payable …………………………..
780,000
Incurred direct labor costs.
e.
May 31
750,000
Factory Wages Payable …………………………..
750,000
Incurred indirect labor costs.
May 31
Cash ……………………………………………………….
Paid factory payroll.
May 31
Other Accounts ……………………………………………….
Incurred other overhead costs.
May 31
Work in Process Inventory …………………………..
Factory Overhead …………………………..………………..
Applied overhead at 115% of direct labor cost.
May 31
Work in Process Inventory …………………………..
May 31
Accounts Receivable …………………………………………….
Sales ……………………………………………………….
Sold finished goods.
May 31
Finished Goods Inventory …………………………..
Record cost of goods sold for May.
1099
Problem 20-2A (50 minutes)
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 …………………….
180,000
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 ……………………………………..
Cost per equivalent unit of production ……………………
Part 3 Assigning product costs to units
Costs transferred out
Direct materials (700,000 EUP x $3.00 per EUP) …….
$2,100,000
Conversion (700,000 EUP x $4.50 per EUP) …………..
Costs of ending work in process
Direct materials (180,000 EUP x $3.00 per EUP) …….
Conversion (54,000 EUP x $4.50 per EUP) …………….
1100
Problem 20-2A (Concluded)
Part 4
MEMORANDUM
TO:
FROM:
DATE:
RE: Percentage of Completion Error Analysis