CPA-TYPE EXERCISES
Exercise 6.26
a. (the only difference between the two is how beginning inventory is treated;
Exercise 6.27
Exercise 6.28
Exercise 6.29
b.
Materials
Conversion Cost
Started and completed 30,000
30,000
36,000
Exercise 6.30
PROBLEMS
Problem 6.31
1. Physical flow schedule:
Units to account for:
Units, beginning work in process ………………….. 40,500
2. Equivalent Units
Direct Materials Conversion Costs
Transferred out …………………. 121,500 121,500
3. Unit direct materials cost = ($1,215,000 + $2,565,000)/135,000
= $28
Unit conversion costs = ($372,600 + $5,871,150*)/124,875
6-23
Problem 6.31 (Concluded)
4. Cost of goods transferred out: 121,500 × $78 = $9,477,000
Ending WIP: (13,500 × $28) + (3,375 × $50) = $546,750
Reconciliation:
Costs to account for:
BWIP ($1,215,000 + $372,600) …………………… $ 1,587,600
5. Work in Process—Welding ………………………….. 9,477,000
Problem 6.32
1. Same as Problem 6–31.
2. Equivalent Units
Direct Materials Conversion Costs
Started and completed ……………… 81,000 81,000
Beginning WIP to completea ……… 0 32,400
3. Unit direct materials cost ($2,565,000/94,500) ……………… $27.143*
6-24
Problem 6.32 (Concluded)
4. Cost of goods transferred out:
From beginning WIP ($1,215,000 + $372,600) ………………. $ 1,587,600
To complete beginning WIP (32,400 × $50.277) ……………. 1,628,975*
*Rounded.
Reconciliation:
Costs to account for:
Beginning WIP ……………………………………. $ 1,587,600
Current ………………………………………………. 8,436,150
6-25
Problem 6.33
Hatch Company
Fabrication Department
Production Report for December
Unit Information
Units to account for:
Units, beginning work in process ………………………. 90,000
Units accounted for:
Physical Flow Equivalent Units
Units completed …………………………. 180,000 180,000
Cost Information
Costs to account for:
Manufacturing Costs
Costs, beginning work in process …………………………….. $ 216,720
Costs added by department ……………………………………… 522,000
6-26
Problem 6.34
Hatch Company
Fabrication Department
Production Report for December
Unit Information
Units to account for:
Units, beginning work in process …………………….. 90,000
Units accounted for:
Physical Flow Equivalent Units
Started and completed ……………………. 90,000 90,000
Cost Information
Costs to account for:
Manufacturing Costs
Costs, beginning work in process ……………………………… $ 216,720
Costs added by department ………………………………………. 522,000
Total costs to account for …………………………………………. $738,720
6-27
Problem 6.35
1. The quote letter is the output.
2. a. Physical flow schedule:
Units, beginning work in process ……………………… 2,000
Units started …………………………………………………….. 11,200
Total units to account for ………………………………….. 13,200
b. Equivalent units schedule:
Transferred Direct Conversion
In Materials Costs
Units started and completed …………….. 8,000 8,000 8,000
Beginning work in process:
0% × 2,000 …………………………………… 0
6-28
Problem 6.35 (Concluded)
d. Valuation:
Units transferred out:
Started and completed (8,000 × $25.50) …….. $204,000
Units from beginning WIP:
Prior-period costs ……………………………….. $29,200
Costs to finish:
e. Cost reconciliation:
Costs to account for:
Beginning WIP ……………………………………………… $ 29,200
Problem 6.36
1. Molding Department
a. Physical flow schedule:
Units, beginning work in process ……………………… 10,000
6-29
Problem 6.36 (Continued)
b. Equivalent units calculation:
Direct Conversion
Materials Costs
Units completed ……………………………………………….. 30,000 30,000
c. Unit cost computation:
Costs charged to the department:
Direct Conversion
Materials Costs Total
Costs in beginning work in process . $22,000 $ 13,800 $ 35,800
*Rounded.
d. and e.
Total costs accounted for:
Cost of goods transferred out (30,000 × $5.6857) …. $170,571
Costs in ending work in process:
Direct materials (5,000 × $2.2357) …………………….. $ 11,179*
6-30
Problem 6.36 (Continued)
2. Journal entries:
Work in Process—Molding …………………………. 56,250
Materials Inventory ……………………………….. 56,250
Work in Process—Molding …………………………. 103,500
3. Assembly Department
a. Physical flow schedule:
Units, beginning work in process ……………………… 8,000
Units started in February (transferred in) …………… 30,000
Total units to account for………………………………….. 38,000
b. Equivalent units calculation:
Direct Conversion Transferred
Materials Costs In
Units completed …………………………….. 35,000 35,000 35,000
Add: Equivalent units in ending
c. Unit cost calculation:
Costs charged to the department:
Direct Conversion Transferred
Materials Costs In Total
Costs in beginning work
Problem 6.36 (Concluded)
Unit cost = Unit direct materials cost + Unit conversion costs +
Unit transferred-in cost
*Rounded.
d. and e.
Total costs accounted for:
Units transferred out (35,000 × $11.0082) …………… $385,287
Costs in ending work in process:
*Rounded.
Costs to account for:
Beginning work in process ……………………………….. $ 62,000
*Difference due to rounding.
Journal entries:
Work in Process—Assembly …………………. 39,550
Materials Inventory …………………………. 39,550
6-32
Problem 6.37
1. Molding Department
a. Physical flow schedule:
Units, beginning work in process ……………………… 10,000
Units completed and transferred out:
Started and completed ………………………………….. 20,000
Total units accounted for ………………………………….. 35,000
b. Equivalent units calculation:
Direct Conversion
Materials Costs
Units started and completed …………………………..… 20,000 20,000
c. Unit cost computation:
Cost charged to the department:
Direct Conversion
Materials Costs Total
6-33
Problem 6.37 (Continued)
d. and e.
Total costs accounted for:
Cost of units started and completed
(20,000 × $5.70) …………………………………………….. $114,000
Cost of units in beginning work in process:
Total cost of units transferred out……………………… $170,500
Costs in ending work in process:
Direct materials (5,000 × $2.25) ………………………. $11,250
2. Work in Process—Molding ………………… 56,250
Materials Inventory ……………………… 56,250
Work in Process—Molding ………………… 103,500
6-34
Problem 6.37 (Continued)
3. Assembly Department
a. Physical flow schedule:
Units, beginning work in process ……………………… 8,000
b. Equivalent units calculation:
Direct Conversion Transferred
Materials Costs In
Units started and completed ………….. 27,000 27,000 27,000
Add Equivalent units in beginning
c. Unit cost calculation:
Costs charged to the department:
Direct Conversion Transferred
Materials Costs In Total
Costs in beginning
work in process ………… $ 0 $ 16,800 $ 45,200 $ 62,000
6-35
Problem 6.37 (Concluded)
d. and e.
Total costs accounted for:
Cost of units started and completed
(27,000 × $11.0133) ……………………………………….. $297,359*
Current cost to finish units:
Direct materials (8,000 × $1.13) …………………. 9,040
Costs in ending work in process:
Conversion (1,500 × $4.20) …………………………….. $ 6,300
*Rounded.
Costs to account for:
Beginning work in process ……………………………….. $ 62,000
Costs incurred …………………………………………………. 346,550
6-36
Problem 6.38
1. Healthway
Mixing Department
Production Report for July 20XX
Unit Information
Units to account for:
Units, beginning work in process …… 5
Units accounted for:
Equivalent Units
Physical Direct Conversion
Flow Materials Costs
Units completed …………………………….. 125 125 125
Cost Information
Costs to account for:
Direct Conversion
Materials Costs Total
Costs in beginning work in process .. $ 120 $ 384 $ 504
Costs accounted for:
Transferred Ending Work
Out in Process Total
Goods transferred out
(125 × $123.916) …………………………. $15,490* — $15,490*
Ending work in process:
*Rounded.
6-37
Problem 6.38 (Continued)
2. Healthway
Tableting Department
Production Report for July 20XX
Unit Information
Units to account for:
Units, beginning work in process ………………… 4,000
Units accounted for:
Equivalent Units
Physical Transferred Direct Conversion
Flow In Materials Costs
Cost Information
Costs to account for:
Transferred Direct Conversion
In Materials Costs Total
Costs in beginning work
in process ……………………… $ 140 $ 32 $ 50 $ 222