CHAPTER 17 (FIN MAN); CHAPTER 3 (MAN) Process Cost Systems
Ex. 17–18 (FIN MAN); Ex. 3–18 (MAN)
a.
1.
Work in Process—Casting Department
350,000
Materials—Alloy
350,000
* Supporting calculations:
Cost of 2,530 transferred-out pounds:
Inventory in process, May 1 ……………………………………………………………………
$ 32,844
Cost to complete May 1 inventory:
Pounds started and completed in May
Supporting equivalent unit and cost per equivalent unit calculations:
Whole
Units
Equivalent Units
Materials
Conversion
Inventory in process, May 1
(60% completed)
230
0
921
in May
3 230 units + 2,500 units – 2,530 units
4 200 units × 44%
Cost per equivalent unit of materials:
$350,000
2,500
= $140 per pound
CHAPTER 17 (FIN MAN); CHAPTER 3 (MAN) Process Cost Systems
Ex. 17–18 (FIN MAN); Ex. 3–18 (MAN) (Concluded)
b.
$29,760; determined as follows:
Direct materials (200 × $140) …………………………………………..
c.
Materials:
From current period ………………………………………………….
$ 140
From beginning inventory …………………………………………
(132)
Increase …………………………………………………………………..
$ 8
From current period ………………………………………………….
CHAPTER 17 (FIN MAN); CHAPTER 3 (MAN) Process Cost Systems
Ex. 17–19 (FIN MAN); Ex. 3–19 (MAN)
a.
1.
Work in Process—Papermaking Department
330,750
Materials—Pulp
330,750
3.
Work in Process—Converting Department*
420,925
* Supporting calculations:
Cost of 103,900 transferred-out units:
Inventory in process, March 1……………………………………………………………………….
$ 9,139
Supporting equivalent unit and cost per equivalent unit calculations:
Whole Units
Equivalent Units
Materials
Conversion
Inventory in process, March 1
(35% completed)
2,600
0
1,6901
Started and completed in March
Cost per equivalent unit of materials:
$330,750
105,000
= $3.15 per unit
Cost per equivalent unit of conversion:
$95,355
105,950
= $0.90 per unit
b.
$14,319; determined as follows:
CHAPTER 17 (FIN MAN); CHAPTER 3 (MAN) Process Cost Systems
Ex. 17–20 (FIN MAN); Ex. 3–20 (MAN)
a. Cost per megawatt hour (MWh):
Fossil plant costs:
Conversion costs ………………………………………..
$40,500,000
Fuel ……………………………………………………………
10,800,000
Fossil plant megawatt hours (MWh):
Megawatts ………………………………………………….
900
Wind farm costs:
Conversion costs ………………………………………..
$2,700,000
Wind farm megawatt hours (MWh):
Megawatts ………………………………………………….
100
30,000
The wind farm, with a cost per megawatt hour of $90 as compared to the fossil
plant cost of $95 per megawatt hour, is the less costly resource.
Note: These figures are close to the national average and show the slight advantage
of wind farms.
b. Equivalent units of production are calculated when there are beginning or
ending inventories that are partially completed to either conversion costs or
CHAPTER 17 (FIN MAN); CHAPTER 3 (MAN) Process Cost Systems
Appendix Ex. 17–21 (FIN MAN); Appendix Ex. 3–21 (MAN)
a. and b.
a. Whole
Units
b. Equivalent Units
of Production
Units to be accounted for:
Beginning work in process
1,900
Units started during period
15,1001
Units to be assigned costs:
Transferred to Packing Department
Inventory in process, ending
CHAPTER 17 (FIN MAN); CHAPTER 3 (MAN) Process Cost Systems
Appendix Ex. 17–22 (FIN MAN); Appendix Ex. 3–22 (MAN)
a. Drawing Department
Whole
Units
Equivalent Units
of Production
Units to be accounted for:
Beginning work in process
500
Units started during period
11,6001
Total
12,100
Transferred to Winding Department in July
Inventory in process, July 31
b. Winding Department
Whole
Units
Equivalent Units
of Production
Units to be accounted for:
Beginning work in process
350
Units started during period
11,4001
Total
11,750
Units to be assigned costs:
Transferred to finished goods in July
Inventory in process, July 31
CHAPTER 17 (FIN MAN); CHAPTER 3 (MAN) Process Cost Systems
Appendix Ex. 17–23 (FIN MAN); Appendix Ex. 3–23 (MAN)
a.
Units in process, May 1 ………………………………………………………………………
4,200
Units placed into production for May…………………………………………………..
Units finished during May …………………………..………………………………………
b.
Whole
Units
Equivalent
Units of
Production
Units to be accounted for:
Beginning work in process
4,200
Units started during the period
23,600
Total
27,800
Units to be assigned costs:
Transferred to finished goods in May
Inventory in process, May 31
CHAPTER 17 (FIN MAN); CHAPTER 3 (MAN) Process Cost Systems
Appendix Ex. 17–24 (FIN MAN); Appendix Ex. 3–24 (MAN)
a. and b.
a. Whole
Units
b. Equivalent
Units of
Production
Units to be accounted for:
Beginning work in process
900
c. Cost per Equivalent Unit =
Total Production Costs
Total Equivalent Units
Cost per Equivalent Unit =
*
$61,740
8,820 units
= $7.00
* $2,466 + $34,500 + $16,200 + $8,574
CHAPTER 17 (FIN MAN); CHAPTER 3 (MAN) Process Cost Systems
Appendix Ex. 17–25 (FIN MAN); Appendix Ex. 3–25 (MAN)
a.
Whole
Units
Equivalent
Units of
Production
Units to be accounted for:
Beginning work in process
500
Units started during the period
3,700
Total
4,200
Transferred to finished goods in June
3,600
Inventory in process, June 30
4,200
* 70% × 600 units
Cost per Equivalent Unit =
Total Production Costs
Total Equivalent Units
Cost per Equivalent Unit =
**
$104,520
4,020 units
= $26.00
** $5,000 + $49,200 + $25,200 + $25,120
b. Cost of units transferred to Finished Goods: $93,600 (3,600 units × $26.00)
CHAPTER 17 (FIN MAN); CHAPTER 3 (MAN) Process Cost Systems
Appendix Ex. 17–26 (FIN MAN); Appendix Ex. 3–26 (MAN)
Highlands Coffee Company
Cost of Production Report—Roasting Department
For the Month Ended May 31
UNITS
Whole
Units
Equivalent Units
of Production
Units charged to production:
Inventory in process, May 1
1,150
Received from materials storeroom
Units to be assigned costs:
Transferred to finished goods in May
11,250
Total units to be assigned costs
11,890
* 80% × 800 units
COSTS
Costs
Cost per equivalent unit:
Total costs for May in Roasting Department
$42,8041
Total equivalent units
÷11,890
Cost per equivalent unit
$ 3.60
Costs assigned to production:
Inventory in process, May 1
$ 1,700
Costs incurred in May
41,1042
Total costs accounted for by the Roasting Department
Costs allocated to completed and partially completed units:
Transferred to finished goods in May
Total costs assigned by the Roasting Department
1 $1,700 + $28,600 + $12,504
2 $28,600 + $12,504
CHAPTER 17 (FIN MAN); CHAPTER 3 (MAN) Process Cost Systems
Appendix Ex. 17–27 (FIN MAN); Appendix Ex. 3–27 (MAN)
Dalton Carpet Company
Cost of Production Report—Cutting Department
For the Month Ended January 31
UNITS
Whole
Units
Equivalent Units
of Production
Units charged to production:
Inventory in process, January 1
3,400
Received from Weaving Department
64,000
Total units accounted for by the
Units to be assigned costs:
Transferred to finished goods in January
63,500
Inventory in process, January 31
3,900
* 10% × 3,900 units
COSTS
Cost per equivalent unit:
Total costs for January in Cutting Department
$ 575,0101
Total equivalent units
÷ 63,890
Cost per equivalent unit
$ 9.00
Costs assigned to production:
Inventory in process, January 1
$ 23,000
Costs incurred in January
Total costs accounted for by the Cutting Department
Costs allocated to completed and partially completed units:
Transferred to finished goods in January
Inventory in process, January 31
1 $23,000 + $366,200 + $105,100 + $80,710
2 $366,200 + $105,100 + $80,710
CHAPTER 17 (FIN MAN); CHAPTER 3 (MAN) Process Cost Systems
PROBLEMS
Prob. 17–1A (FIN MAN); Prob. 3–1A (MAN)
1.
a.
Materials
500,000
Accounts Payable
500,000
b.
Work in Process—Spinning Department
275,000
Work in Process—Tufting Department
110,000
Factory Overhead—Spinning Department
46,000
Factory Overhead—Tufting Department
39,500
470,500
c.
Work in Process—Spinning Department
185,000
Work in Process—Tufting Department
98,000
Factory Overhead—Spinning Department
18,500
Factory Overhead—Tufting Department
9,000
Wages Payable
310,500
Factory Overhead—Spinning Department
12,500
Factory Overhead—Tufting Department
Accumulated Depreciation
21,000
e.
Factory Overhead—Spinning Department
Factory Overhead—Tufting Department
1,000
Prepaid Insurance
f.
Work in Process—Spinning Department
80,000
Work in Process—Tufting Department
55,000
Factory Overhead—Spinning Department
80,000
Factory Overhead—Tufting Department
55,000
Work in Process—Tufting Department
547,000
Work in Process—Spinning Department
547,000
Finished Goods
807,200
Work in Process—Tufting Department
807,200
Cost of Goods Sold
795,200
795,200
CHAPTER 17 (FIN MAN); CHAPTER 3 (MAN) Process Cost Systems
Prob. 17–1A (FIN MAN); Prob. 3–1A (MAN) (Concluded)
2.
Materials
Work in
Process—
Spinning Dept.
Work in
Process—
Tufting Dept.
Finished
Goods
Balance, January 1 ….
$ 17,000
$ 35,000
$ 28,500
$ 62,000
Debits …………………….
500,000
540,0001
810,0002
807,200
Balance, January 31 ..
3.
Factory Overhead—
Spinning Dept.
Factory Overhead—
Tufting Dept.
Balance, January 1 ……..
$ 0
$ 0
Debits ………………………..
79,0001
58,0002
Credits ……………………….
CHAPTER 17 (FIN MAN); CHAPTER 3 (MAN) Process Cost Systems
Prob. 17–2A (FIN MAN); Prob. 3–2A (MAN)
1.
Hana Coffee Company
Cost of Production Report—Roasting Department
For the Month Ended July 31
UNITS
Whole
Units
Equivalent Units
Direct
Materials
Conversion
Units charged to production:
Inventory in process, July 1
30,000
Total units accounted for by the
Roasting Department
30,000
Started and completed in July
119,0002
119,000
119,000
Transferred to Packing Department in July
149,000
119,000
146,000
Inventory in process, July 31
(45% completed)
36,0003
36,000
16,200
Total units to be assigned costs
155,000
162,200
CHAPTER 17 (FIN MAN); CHAPTER 3 (MAN) Process Cost Systems
Prob. 17–2A (FIN MAN); Prob. 3–2A (MAN) (Continued)
COSTS
Costs
Direct
Materials
Conversion
Total
Cost per equivalent unit:
Total costs for July in Roasting
Department
$620,000
$123,2721
Total equivalent units
÷155,000
÷162,200
Cost per equivalent unit
Costs assigned to production:
Inventory in process, July 1
Costs incurred in July
Costs allocated to completed and
partially completed units:
Inventory in process, July 1 balance
$121,800
To complete inventory in process,
July 1
$ 0
$ 20,5203
20,520
Cost of completed July 1 work in
$142,320
process
Started and completed in July
Transferred to Packing Department
in July
$708,760
Inventory in process, July 31
Total costs assigned by the Roasting
Costs transferred to Packing Department: $708,760
Work in process, July 31: 36,000 units at a cost of $156,312
1 $90,000 + $33,272
2 $620,000 + $90,000 + $33,272
3 27,000 units × $0.76
4 119,000 units × $4.00
CHAPTER 17 (FIN MAN); CHAPTER 3 (MAN) Process Cost Systems
Prob. 17–2A (FIN MAN); Prob. 3–2A (MAN) (Concluded)
2.
Direct materials cost increased from $3.98 in June to $4.00 in July.
Conversion cost decreased from $0.80 in June to $0.76 in July.
Computations:
Direct materials: $3.98 ($119,400 ÷ 30,000 units)
Conversion: $0.80; determined as follows:
CHAPTER 17 (FIN MAN); CHAPTER 3 (MAN) Process Cost Systems
Prob. 17–3A (FIN MAN); Prob. 3–3A (MAN)
1.
White Diamond Flour Company
Cost of Production Report—Sifting Department
For the Month Ended July 31
UNITS
Whole
Units
Equivalent Units
Direct
Materials
Conversion
Units charged to production:
Inventory in process, July 1
900
Received from Milling Department
15,700
Total units accounted for by the
Sifting Department
16,600
Inventory in process, July 1
14,600
Transferred to Packaging Department
Inventory in process, July 31
(4/5 completed)
CHAPTER 17 (FIN MAN); CHAPTER 3 (MAN) Process Cost Systems
Prob. 17–3A (FIN MAN); Prob. 3–3A (MAN) (Continued)
COSTS
Costs
Direct
Materials
Conversion
Total
Cost per equivalent unit:
Total costs for July in Sifting
Department
$33,755
$ 7,1281
Total equivalent units
÷15,700
÷15,840
Cost per equivalent unit
Costs assigned to production:
Inventory in process, July 1
Costs incurred in July
Total costs accounted for by the
Sifting Department
$42,944
Costs allocated to completed and
partially completed units:
Inventory in process, July 1 balance
$ 2,061
To complete inventory in process,
Cost of completed July 1 work in
Started and completed in July
Transferred to Packaging Department
Inventory in process, July 31
2,761
Total costs assigned by the Sifting
1 $4,420 + $2,708
2 $33,755 + $4,420 + $2,708
3 360 units × $0.45
CHAPTER 17 (FIN MAN); CHAPTER 3 (MAN) Process Cost Systems
Prob. 17–3A (FIN MAN); Prob. 3–3A (MAN) (Concluded)
2.
Work in Process—Sifting Department
33,755
Work in Process—Milling Department
33,755
3. Direct materials: $0.10 increase ($2.15 – $2.05)
Conversion: $0.05 increase ($0.45 – $0.40)
4. The cost of production report may be used as the basis for allocating product
costs between Work in Process and Transferred-Out (or Finished) Goods. The
CHAPTER 17 (FIN MAN); CHAPTER 3 (MAN) Process Cost Systems
Prob. 17–4A (FIN MAN); Prob. 3–4A (MAN)
1. and 2.
Work in Process—Filling
Date
Item
Dr.
Cr.
Balance
Dr.
Cr.
Apr.
1
Bal., 800 units, 30% completed
3,860
30
Cooking Dept., 7,800 units at $4.40
34,320
38,180
30
Direct labor
8,562
46,742
30
Factory overhead
6,387
53,129
31
Direct labor
12,042
59,513
31
Bal., 300 units, 35% completed