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P18-29A, cont.
Requirement 2
Work-in-Process―Assembly
Balance, Nov. 1
0
516,768
Transferred to Programming
P18-30A Preparing a production cost report, no beginning WIP or costs transferred in; journal
entries
Learning Objectives 2, 3, 4
1. Total Cost per EUP $2.60
Allen Paper Co. produces the paper used by wallpaper manufacturers. Allen’s four-stage process
includes mixing, cooking, rolling, and cutting. During March, the Mixing Department started and
completed mixing for 4,500 rolls of paper. The department started but did not finish the mixing for an
additional 500 rolls, which were 20% complete with respect to both direct materials and conversion
work at the end of March. Direct materials and conversion costs are incurred evenly throughout the
mixing process. The Mixing Department incurred the following costs during March:
Requirements
1. Prepare a production cost report for the Mixing Department for March.
2. Journalize all transactions affecting the company’s mixing process during March, including those
already posted.
SOLUTION
Requirement 1
ALLEN PAPER COMPANY
Production Cost Report―MIXING DEPARTMENT
Month Ended March 31, 20XX
Equivalent Units
UNITS
Whole
Units
Transferred
In
Direct
Materials
Conversion
Costs
Units to account for:
COSTS
Transferred
In
Direct
Materials
Conversion
Costs
Total
Costs
Costs to account for:
Beginning work-in-process
n/a
$ 0
$ 0
$ 0
Costs added during period
n/a
5,520
6,440
11,960
a 500 × 20% = 100 EUP
b 500 × 20% = 100 EUP
P18-30A, cont.
Requirement 2
Date
Accounts and Explanation
Debit
Credit
Mar. 31
Work-in-Process Inventory―Mixing
5,520
Raw Materials Inventory
5,520
Materials used, direct materials assigned to WIP.
P18-31A Preparing a production cost report, two materials added at different points, no beginning
WIP or costs transferred in; journal entries
Learning Objectives 2, 3, 4
1. Total EUP for CC 2,850
3. WIP Balance $1,145
White’s Exteriors produces exterior siding for homes. The Preparation Department begins with wood,
which is chopped into small bits. At the end of the process, an adhesive is added. Then the
wood/adhesive mixture goes on to the Compression Department, where the wood is compressed into
sheets. Conversion costs are added evenly throughout the preparation process. January data for the
Preparation Department are as follows:
Requirements
1. Prepare a production cost report for the Preparation Department for January. (Hint: Each direct
material added at a different point in the production process requires its own equivalent units of
production computation.)
2. Prepare the journal entry to record the cost of the sheets completed and transferred out to the
Compression Department.
3. Post the journal entries to the Work-in-Process Inventory—Preparation T-account. What is the
ending balance?
SOLUTION
Requirement 1
WHITE EXTERIORS
Production Cost Report―PREPARATION DEPARTMENT
Month Ended January 31, 20XX
Equivalent Units
UNITS
Whole
Units
Direct
Materials—
Wood
Direct
Materials—
Adhesive
Conversion
Costs
Units to account for:
COSTS
Direct
Materials -
Wood
Direct
Materials -
Adhesive
Conversion
Costs
Total
Costs
Costs to account for:
Beginning work-in-process
$ 0
$ 0
$ 0
$ 0
a 1,000 × 35% = 350
b 2,500 EUP × $0.83 per EUP = $2,075
P18-31A, cont.
Requirement 2
Date
Accounts and Explanation
Debit
Credit
Jan. 31
Work-in-Process Inventory―Compression
6,250
Work-in-Process Inventory―Preparation
6,250
Transfer costs assigned to units transferred.
Requirement 3
Work-in-Process—Preparation
Balance, Jan. 1
0
6,250
Transferred to Compression
P18-32A Preparing production cost report, second department with beginning WIP; journal
entries
Learning Objectives 2, 3, 4
1. Cost per EUP DM $24.00
Claudia Carpet manufactures broadloom carpet in seven processes: spinning, dyeing, plying, spooling,
tufting, latexing, and shearing. In the Dyeing Department, direct materials (dye) are added at the
beginning of the process. Conversion costs are incurred evenly throughout the process. Information for
November 2016 follows:
Requirements
1. Prepare the November production cost report for Claudia’s Dyeing Department.
2. Journalize all transactions affecting Claudia’s Dyeing Department during November, including the
entries that have already been posted.
SOLUTION
Requirement 1
CLAUDIA CARPET
Production Cost Report―DYEING DEPARTMENT
Month Ended November 30, 2016
Equivalent Units
UNITS
Whole
Units
Transferred
In
Direct
Materials
Conversion
Costs
Units to account for:
COSTS
Transferred
In
Direct
Materials
Conversion
Costs
Total
Costs
Costs to account for:
Beginning work-in-process
$ 3,500
$ 1,750
$ 5,420
$ 10,670
Costs added during period
18,025
13,010
53,580
84,615
Total costs accounted for
$ 21,525
$ 14,760
$ 59,000
$ 95,285
a 125 × 80% = 100
b 490 EUP × $35.00 per EUP = $17,150
Requirement 2
Date
Accounts and Explanation
Debit
Credit
Nov. 30
Work-in-Process Inventory―Dyeing
18,025
Work-in-Process―Spinning
18,025
Transfer costs assigned to units transferred.
Work-in-Process Inventory―Dyeing
45,460
Manufacturing Overhead
45,460
Overhead allocated to WIP.
P18-33A Preparing production cost report, second department with beginning WIP; decision
making
Learning Objectives 2, 3, 5
1. Total cost per EUP for CC $10.00
Sea Bound uses three processes to manufacture lifts for personal watercraft: forming a lift’s parts from
galvanized steel, assembling the lift, and testing the completed lift. The lifts are transferred to Finished
Goods Inventory before shipment to marinas across the country.
Sea Bound’s Testing Department requires no direct materials. Conversion costs are incurred evenly
throughout the testing process. Other information follows for the month of August:
The cost transferred into Finished Goods Inventory is the cost of the lifts transferred out of the
Testing Department.
Requirements
1. Prepare a production cost report for the Testing Department.
2. What is the cost per unit for lifts completed and transferred out to Finished Goods Inventory? Why
would management be interested in this cost?
SOLUTION
Requirement 1
SEA BOUND
Production Cost Report―TESTING DEPARTMENT
Month Ended August 31, 20XX
Equivalent Units
UNITS
Whole
Units
Transferred
In
Direct
Materials
Conversion
Costs
Units to account for:
Beginning work-in-process
2,200
COSTS
Transferred
In
Direct
Materials
Conversion
Costs
Total
Costs
Costs to account for:
Beginning work-in-process
$ 93,800
n/a
$ 18,200
$ 112,000
P18-33A, cont.
Requirement 2
Costs per lift
=
Total Costs
/
Units Completed and Transferred Out
=
$403,200
/
4,200 lifts
=
$96.00 average cost per lift
P18A-34A Preparing production cost report, second department, with beginning WIP and
transferred in costs, journal entries, FIFO method
Learning Objective 6
Appendix 18A
1. Total EUP for CC 3,780
Vero, Inc. manufactures tire tubes in a two-stage process that includes assembly and sealing. The
Sealing Department tests the tubes and adds a puncture-resistant coating to each tube to prevent air
leaks.
The direct materials (coating) are added at the end of the sealing process.
Requirements
1. Prepare a production cost report for the Sealing Department for March.
2. Journalize all transactions affecting the Sealing Department during March, including the entries that
have already been posted.
SOLUTION
Requirement 1
VERO, INC.
Production Cost Report―SEALING DEPARTMENT
Month Ended March 31, 2016
Equivalent Units
UNITS
Whole
Units
Transferred
In
Direct
Materials
Conversion
Costs
COSTS
Transferred
In
Direct
Materials
Conversion
Costs
Total
Costs
Cost
per Unit
Costs to account for:
Beginning work-in-process
$ 11,100
$ 0
$ 15,600
$ 26,700
Costs added during period
48,000
18,000
56,700
122,700
Total costs to account for
59,100
18,000
72,300
149,400
P18A-34A, cont.
Requirement 1, cont.
a 1,000 × 30% = 300
b 2,200 × 40% = 880
Requirement 2
Date
Accounts and Explanation
Debit
Credit
Mar. 31
Work-in-Process Inventory―Sealing
48,000
Work-in-Process―Assembly
48,000
Transfer costs assigned to units transferred.
P18A-35A Preparing a production cost report, second department with beginning WIP; recording
transactions
Learning Objective 6
Appendix 18A
1. Total EUP for DM 560
Work Problem P18-32A using the FIFO method. The Dyeing Department beginning work in process of
55 units is 40% complete as to conversion costs. Round equivalent unit of production costs to four
decimal places.
SOLUTION
Requirement 1
CLAUDIA CARPET
Production Cost Report―DYEING DEPARTMENT
Month Ended November 30, 2016
Equivalent Units
UNITS
Whole
Units
Transferred
In
Direct
Materials
Conversion
Costs
Units to account for:
Beginning WIP
55
Started in production
560
Total units to account for
615
COSTS
Transferred
In
Direct
Materials
Conversion
Costs
Total
Costs
Costs
per Unit
Costs to account for:
Beginning work-in-process
$ 3,500
$ 1,750
$ 5,420
$ 10,670
Costs added during period
18,025
13,010
53,580
84,615
Total costs to account for
21,525
14,760
59,000
95,285
P18A-35A, cont.
Requirement 1, cont.
a 55 × 60% = 33
b 125 × 80% = 100
c 435 EUP × $32.1875 per EUP = $14,002
Requirement 2
Date
Accounts and Explanation
Debit
Credit
Nov. 30
Work-in-Process Inventory―Dyeing
18,025
Work-in-Process―Spinning
18,025
Transfer costs assigned to units transferred.
Problems (Group B)
For all Problems, assume the weighted-average method is to be used unless you are told otherwise.
P18-36B Preparing a production cost report, no beginning WIP or cost transferred in
Learning Objectives 2, 3
1. Total cost per EUP $5.87
2. WIP Balance $103,302
Lori Electronics makes DVD players in three processes: assembly, programming, and packaging. Direct
materials are added at the beginning of the assembly process. Conversion costs are incurred evenly
Requirements
1. Prepare a production cost report for the Assembly Department for April.
2. Prepare a T-account for Work-in-Process Inventory—Assembly to show its activity during April,
including the April 30 balance.
SOLUTION
Requirement 1
LORI ELECTRONICS
Production Cost Report―ASSEMBLY DEPARTMENT
Month Ended April 30, 20XX
Equivalent Units
UNITS
Whole
Units
Transferred
In
Direct
Materials
Conversion
Costs
Units to account for:
Beginning work-in-process
0
COSTS
Transferred
In
Direct
Materials
Conversion
Costs
Total
Costs
Costs to account for:
Beginning work-in-process
n/a
$ 0
$ 0
$ 0
Costs added during period
n/a
280,250
222,212
502,462
P18-36B, cont.
Requirement 2
Work-in-Process―Assembly
Balance, Apr. 1
0
399,160
Transferred to Programming
Direct Materials
280,250
Direct Labor
152,712
Manufacturing Overhead
69,500
Balance, Apr. 30
103,302
P18-37B Preparing a production cost report, no beginning WIP or costs transferred in; journal
entries
Learning Objectives 2, 3, 4
1. Cost per EUP DM $1.25
Requirements
1. Prepare a production cost report for the Mixing Department for September.
2. Journalize all transactions affecting the company’s mixing process during September, including
those already posted.
SOLUTION
Requirement 1
NEAL PAPER COMPANY
Production Cost Report―MIXING DEPARTMENT
Month Ended September 30, 20XX.
Equivalent Units
UNITS
Whole
Units
Transferred
In
Direct
Materials
Conversion
Costs
Units to account for:
COSTS
Transferred
In
Direct
Materials
Conversion
Costs
Total
Costs
Costs to account for:
Beginning work-in-process
n/a
$ 0
$ 0
$ 0
Costs added during period
n/a
5,675
6,810
12,485
