CHAPTER 6 Process Costing
P 6-58
1.
Physical flow:
Units to account for: Units accounted for:
Units in beginning WIP…
…
60,000 Units completed…………
…
150,000
Units started………………
…
120,000 Units in ending WIP………
…
30,000
Total units to acct. for… 180,000 Total units acct’d. for…
…
180,000
Costs to account for: Cabinets Components Conversion Total
Beginning WIP……………
…
$1,200,000 $12,600,000 5,400,000$ $19,200,000
Incurred during April……… 2,400,000 25,200,000 8,640,000 36,240,000
Total costs to acct. for
…
$3,600,000 $37,800,000 $14,040,000 $55,440,000
Equivalent units……………
…
180,000 180,000 156,000
Cost per equivalent unit…
…
$20 $210 $90 $320
Transferred Ending Work
Costs accounted for: Out in Process Total
Unit Information
Stillwater Designs
Production Report
For the Month of April
(Weighted Average Method)
Assembly Department
CHAPTER 6 Process Costing
P 6-58 (Concluded)
2. Although the answers may vary, some essential elements should be mentioned in
the report. The job cost sheet summarizes the manufacturing activity for a job,
whereas the production report summarizes the manufacturing activity in a process
department for a period of time. Both reports provide unit cost information, although
the production report only provides the unit cost for a given process. Only the last
P 6-59
1. Units to account for:
Units in beginning work in process (60% complete)…………. 40,000
Units started during the period………………..…………………
…
120,000
Total units to account for……………………..………………
…
160,000
Units accounted for:
2. Units completed…………………………………………..……………
…
120,000
Add: Units in EWIP × Fraction complete
(40,000 × 0.60)…..……………………………………………………
…
24,000
Equivalent units of output………………………………..…………… 144,000
CHAPTER 6 Process Costing
P 6-59 (Concluded)
4. First, calculate the cost per unit for the equivalent units in beginning
inventory (0.60 × 40,000 = 24,000 equivalent units in BWIP) = 24,000
Next, calculate the current-period (FIFO) cost per unit:
= Weighted Average Equivalent
Units – Prior-Period
Equivalent Units
= 144,000 – 24,000
= 120,000
P 6-60
Physical flow:
…
Equivalent units:
Units completed……………
…
120,000
Units in ending WIP………… 24,000
Total equivalent units…
…
144,000
FIFO Equivalent Units for Materials
COST INFORMATION
Alfombra Inc.
Production Report
For the Month of August
(Weighted Average Method)
UNIT INFORMATION
Throw Rug Department
CHAPTER 6 Process Costing
P 6-60 (Concluded)
Transferred
Costs accounted for: Out Total
Goods transferred out
($5.20 × 120,000)……………… $624,000 $624,000
P 6-61
1. Units to account for: Units accounted for:
Units in beginning WIP……
…
15,000 Transferred out……
…
45,000
…
2. Equivalent
Units
Transferred out………………………………………..…………………………
…
45,000
Ending WIP (5,000 × 0.25)…………..…………………………………………… 1,250
Total………………………………………………………………..……………
…
46,250
3. Unit cost [($1,656 + $26,094)/46,250]……..…………………………………… $0.60
5. To assign costs to spoiled units, they should appear as an item in the
equivalent units schedule:
Equivalent
Units
…
…
Work in Process
Ending
CHAPTER 6 Process Costing
P 6-61 (Concluded)
The cost per equivalent unit is the same calculated without spoilage.
Spoilage Cost = 2,500 × $0.60 = $1,500
P 6-62
Units to account for: Units accounted for:
Units in beginning WIP……
…
24,000 Units completed……………
…
70,000
Units started…………………
…
56,000 Units in ending WIP………… 10,000
Total units to acct. for…
…
80,000 Total units acct’d. for …
…
80,000
…
…
Costs to account for:
Costs in beginning WIP………………………..……………………………………
…
$285,520
Costs added by department…………………..……………………………………
…
638,480
Total costs to account for………………………………………………………
…
$924,000
…
COST INFORMATION
Millie Company
Assembly Department
For the Month of June
(Weighted Average Method)
UNIT INFORMATION
Production Report
CHAPTER 6 Process Costing
P 6-63
Units to account for: Units accounted for:
Units in beginning WIP…….. 24,000 Started and completed…… 46,000
Units started……..…………
…
56,000 From beginning WIP……… 24,000
From ending WIP…………
…
10,000
Total units to acct. for…
…
80,000 Total units acct’d for…
…
80,000
Costs to account for:
Costs in beginning WIP…………………………..………………………………
…
$285,520
Costs added by department……………………..………………………………
…
638,480
Total costs to account for……………………..………………………………
…
$924,000
UNIT INFORMATION
COST INFORMATION
Millie Company
(FIFO Method)
Assembly Department
Production Report
For the Month of June
CHAPTER 6 Process Costing
P 6-64
1. a. Physical flow schedule:
Units to account for: Units accounted for:
Units in BWIP……
…
30,000 Units completed………
…
480,000
Units started……
…
500,000 From EWIP……………
…
50,000
Total units……
…
530,000 Total units…………
…
530,000
2. Unit cost computation:
Costs in BWIP………………..……………………………………………………
…
$ 270,000
Costs added……………..…………………………………………………………
…
11,342,500
Total costs……………..………………………………………………………
…
$11,612,500
Unit Cost = $11,612,500/500,000…………..……………………………………
…
$23.225
3. Ending work in process (20,000 × $23.225)…………………………………… $464,500
Goods transferred out (480,000 × $23.225)……..…..………………………… $11,148,000
5. Equivalent unit schedule: Paraffin Pigment
Units completed………………..………………………………
…
480,000 480,000
Units in ending WIP……………………..……………………… 20,000 20,000
Total equivalent units……………………..………………
…
500,000 500,000
Unit cost computation: Paraffin Pigment
CHAPTER 6 Process Costing
P 6-65
1. Department A
a. Physical flow schedule:
Units in beginning WIP…………..………………
…
5,000
Units started in November…………..…………… 25,000
Total units to account for………..…………… 30,000
b. Equivalent unit calculation:
Units completed……………..………………………………………
…
28,000
Add: Equivalent units in ending WIP (2,000 × 0.80)………..…
…
1,600
Total equivalent units……………………………………..……
…
29,600
d. and e. Cost reconciliation:
Costs to account for:
Beginning WIP…………………………..……………………………
…
$ 16,900
Costs incurred…………………………………..……………………
…
153,020
Total costs to account for………………..……………………
…
$169,920
Total costs accounted for:
Goods transferred out (28,000 × $5.7405)……..…..……………
…
$160,734
Costs in ending WIP (1,600 × $5.74)…………..…………………
…
9,185
Total costs accounted for*…………………..…………………
…
$169,919
*
Rounded
2.
Credit
Work in Process—Department A
Raw Materials 57,800
57,800
Debit
Journal
Date Description
*
*
*
P 6-65 (Concluded)
Answers may vary, but could (or should) include:
Using a conversion cost control account is more commonly used because direct
labor is becoming a small percentage of total manufacturing costs. Automation is
P 6-66
1. Department A
a. Physical flow schedule:
Units in beginning WIP……………..…………………
…
5,000
Units started in November………..…………………
…
25,000
Total units to account for…………..……………… 30,000
b. Equivalent unit calculation:
Units started and completed……..……………………………………
…
23,000
Equivalent units in beginning WIP [(1 – 0.40) × 5,000]……………
…
3,000
Equivalent units in ending WIP (2,000 × 0.80)………………………
…
1,600
Total equivalent units…………………..……………………………
…
27,600
c. Costs charged to the department: Materials Conversion Total
CHAPTER 6 Process Costing
P 6-66 (Concluded)
d. and e. Cost reconciliation:
Costs of unit started and completed (23,000 × $5.544)………………
$127,512
Costs of unit in beginning WIP:
Prior period costs………………..……………………………………
…
16,900
Current cost to finish units (3,000 × $5.54)………….………..……
…
16,632
Total cost of units transferred out……..…………………………
$161,044
*
Difference due to rounding.
2.
Debit Credit
Work in Process—Department A
Raw Materials 57,800
Work in Process—Department A
Conversion Costs—Department A 95,220
95,220
Journal
Date Description
57,800
…
CHAPTER 6 Process Costing
P 6-67
1.
Units to account for:
Units in beginning WIP……………………………………………………… 10
Units started…………………………………………………………………
…
150
Total units to account for………………………………………………
…
160
Physical Equivalent
Units accounted for: Flow Units
Costs to account for: Materials Conversion* Total
Beginning WIP……………………………
…
$ 252 $ 846 $ 1,098
Incurred during March……………………
…
3,636 13,854 17,490
Total costs to account for……………
…
$3,888 $14,700 $18,588
Transferred Ending Work
Costs accounted for: Out Total
in Process
Benson Pharmaceuticals
Mixing Department
For the Month of March
(Weighted Average Method)
UNIT INFORMATION
COST INFORMATION
Production Report