1121
Problem 20-5B (Concluded)
Cost per EUP
Direct
Materials
Conversion
Costs incurred this period………
$ 112,500
$ 616,000
÷ EUP………………………………..
÷ 232,500
÷ 226,000
Part 2
1122
Problem 20-6B (45 minutes)
1.
Units in beginning inventory …………………………………..
62,500
Units started and completed …………………………………..
Total units transferred to finished goods ………………..
2. Equivalent units of production—FIFO
Direct
Equivalent units of production
Materials
Conversion
3. Cost per equivalent unit of direct materials and conversion—FIFO
Direct
Materials
Conversion
Costs to complete beginning work in process
Direct materials (37,500 EUP x $2.50 per EUP) .
Conversion (12,500 EUP x $2.20 per EUP) ………
27,500
Total costs to complete …………………………………
Cost of units started and completed this period
Direct materials (175,000 EUP x $2.50 per EUP).
385,000
Cost of ending work in process inventory
Direct materials (61,000 EUP x $2.50 per EUP)..
4. Assignment of costs to output of department—FIFO
Costs of goods transferred out
Cost of beginning work in process inventory …..
Direct materials …………………………………………….
$ 99,075
Conversion ……………………………………………………
53,493
$ 152,568
1124
Problem 20-7B (80 minutes)
Part 1
BELDA CO.—Cutting Department
Process Cost Summary – FIFO Method
For Month Ended March 31
Costs Charged to Production
Costs of beginning work in process
Costs incurred this period
Unit cost information
Beginning work in process..
220,000
250,000
260,000
Total units accounted for ……..
260,000
Equivalent units of production
Direct
Materials
Conversion
Units to complete beginning WIP
Units started and completed
1125
Problem 20-7B (Continued)
Cost per EUP
Direct
Materials
Conversion
Costs incurred this period…………
$ 223,200
$1,233,960
Cost assignment and reconciliation
Costs transferred out
Cost of beginning work in process………………
$ 114,520
Cost to complete beginning work in process
Part 2
Work in Process Inventory—Blending ……………………
1,486,960
1126
Problem 20-7B (Concluded)
If equivalent units of production for the production department’s ending
inventory for March are overstated, then total equivalent units of
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 20
1127
SERIAL PROBLEM — SP 20
1. Features of job order and process costing follow.
Job order costing
Process costing
2. Given the size of her company, and the types of products she sells,
Santana should probably stay with job order costing. The furniture
she makes would be made in small batches, probably to customer
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 20
1128
COMPREHENSIVE PROBLEM
Comprehensive Problem, Major League Bat Company (110 minutes)
[Instructor note: General Ledger accounts are shown in Part 4.]
Part 1 (Using either weighted-average or FIFO)
July Journal Entries
a.
Raw Materials Inventory ………………………………………..
125,000
Cash ………………………………………………………………..
125,000
Purchased raw materials for cash.
Work in Process Inventory ……………………………………..
Raw Materials Inventory ……………………………………
c.
Work in Process Inventory ……………………………………..
202,250
Factory Wages Payable ……………………………………
227,250
d.
227,250
Cash ……………………………………………………………….
227,250
Paid factory payroll with cash.
e.
Cash ……………………………………………………………….
Work in Process Inventory ……………………………………..
101,125
Factory Overhead …………………………………………….
101,125
Allocated overhead at 50% of direct labor.
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 20
1129
Comprehensive Problem (Continued)
Part 2 (Using weighted-average)
MAJOR LEAGUE BAT CO.
Process Cost Summary (Weighted Average)
For Month Ended July 31
Costs Charged to Production
Costs of beginning work in process
Direct materials…………………………………………
$ 2,660
Conversion………………………………………………
5,475
$ 8,135
Unit cost information
Units to account for
Units accounted for
Complete & transferred out …………
Total units accounted for …………….
Equivalent units of production
Direct
Materials
Conversion
Units completed & transferred out..
11,000 EUP
11,000 EUP
Units of ending work in process
Direct materials (8,000 x 100%)…..
Conversion (8,000 x 40%)…………
19,000 EUP
14,200 EUP
÷ EUP
19,000 EUP
14,200 EUP
Costs incurred this period
Direct materials…………………………………………
Total costs to account for
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 20
1130
Comprehensive Problem (Continued)
(Using weighted-average)
Cost assignment and reconciliation
Costs transferred out
Part 3 — Journal entries (Using weighted-average)
g.
271,150
h.
Cash ……………………………………………………………………..
625,000
265,700
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 20
1131
Comprehensive Problem (Continued)
Part 4 (Using weighted-average)
General ledger accounts
Raw Materials Inventory
Acct. No. 132
Date
Explanation
Debit
Credit
Balance
June
30
Balance
25,000
Work in Process Inventory
Acct. No. 133
Date
Explanation
Debit
Credit
Balance
June
30
Balance
8,135
Direct materials
Overhead allocation
363,950
Transfer to Fin. Goods
Finished Goods Inventory
Acct. No. 135
Date
Explanation
Debit
Credit
Balance
June
30
Balance
110,000
381,150
July sales
Purchases
150,000
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 20
1132
Comprehensive Problem (Concluded)
Part 4 (Using weighted-average)
Factory Wages Payable
Acct. No. 212
Date
Explanation
Debit
Credit
Balance
(c)
Direct labor
202,500
202,500
Cost of Goods Sold
Acct. No. 502
Date
Explanation
Debit
Credit
Balance
(h)
July sales
265,700
Factory Overhead
Acct. No. 540
Date
Explanation
Debit
Credit
Balance
(b)
Indirect materials
10,000
10,000
Indirect labor
25,000
35,000
(e)
Other overhead costs
80,000
115,000
Overhead application
101,125
13,875
Part 5 (Using weighted-average)
Computation of gross profit for July
Sales ……………………………………………………………………………………….
$ 625,000
$ 345,425
Date
Explanation
Debit
Credit
Balance
(h)
July sales
625,000
625,000
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 20
1133
Comprehensive Problem (Continued)
Part 2 (Using FIFO)
MAJOR LEAGUE BAT CO.
Process Cost Summary (FIFO)
For Month Ended July 31
Costs Charged to Production
Costs of beginning work in process
Direct materials………………………………………
$ 2,660
Unit cost information
Units to account for
Units accounted for
Complete & transferred out …………
Total units accounted for …………….
Equivalent units of production
Direct
Materials
Conversion
Units to complete beginning WIP
Costs incurred this period
Direct materials………………………………………