Chapter 3 – Weygandt Managerial 7e
Challenge Exercise Solutions
Solution
CE 3-1
(a) Units to be accounted for: Physical Units
Applications in process, March 1 250
Applications started in March 1,100
Total Applications 1,350
Units accounted for
Applications completed and transferred out 950
Applications in process March 31 400
Total Applications 1,350
Equivalent Units
Materials Conversion Costs
Applications transferred out 950 950
Applications in process, March 31
400 x 100% 400
400 x 75% ____ 300
Total equivalent units 1,350 1,250
(b) Unit Materials Costs
Applications in process, March 1
Direct materials cost $ 2,125
Costs added to production during March
Direct materials cost 8,000
Total materials costs $10,125
Total materials cost ÷ Equivalent Units = Units Materials Cost
$10,125 ÷ 1,350 = $7.50
Unit Conversion Costs
Applications in process, March 1
Conversion costs $ 9,450
Solution
CE 3-1 (cont.)
Part b (cont.) City University
Admissions Department
Cost Reconciliation Schedule
For the Month of March
Costs accounted for:
Transferred out (950 x $57.50) $54,625
(c) Equivalent Units
Materials
Applications transferred out 950
Unit Materials Costs
Applications in process, March 1
Direct materials cost $ 2,125
Total materials cost ÷ Equivalent Units = Units Materials Cost
$8,125 ÷ 1,150 = $7.07
Total savings:
Solution
CE 3-2
(a)
Equivalent Units
Materials Conversion Costs
Beginning work in process 0 0
Units started and completed (9,000 x 100%) 9,000 9,000
(b) Unit Costs
Materials $56,250 ÷ 12,000 = $4.69
Costs accounted for:
Transferred out (9,000 x $19.69) $177,210
Work in process, November 30th
**$30 difference due to rounding. ($56,250 + $123,750 + $45,000 = $225,000)
(c) Equivalent Units
Materials Conversion Costs
Beginning work in process
1,000 x 0% 0
1,000 x 60% 600
Unit Costs
Materials $56,250 ÷ 12,000 = $4.69
Solution
CE 3-2 (cont.)
Part c (cont.)
Costs accounted for:
Work in process, November 1st
Materials $ 4,800
Conversion Costs (10,325 – 4,800) + (600 x $14.74) 14,369 $ 19,169
Transferred out (9,000 x $19.43) 174,870
Work in process, November 30th