Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
PROCESS COSTING
EXERCISES
14. Each student will have a different answer. No solution provided.
15. a.
24,000
600,000
624,000
(608,000)
16,000
DM
24,000
CC
24,000
Beginning
WIP Inventory
Started &
584,000 584,000 584,000
completed
Ending WIP
16,000 16,000 10,400
Inventory
(65%)
EUP
624,000 624,000 618,400
16. a. & b. Beginning WIP
Inventory (30%)
Beginning
WIP
70,000
Inventory
70,000
136
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
137
Started
To account
for
Started and
445,300 completed
Ending WIP
515,300 Inventory
Accounted for
Units
70,000
DM
70,000
357,500
87,800
515,300
CC
70,000
Beginning
WIP Inventory
Started &
357,500 357,500 357,500
completed
Ending WIP
87,800 87,800 30,730
Inventory
(35%)
EUP
515,300 515,300 458,230
Units
17.
a.
Beginning WIP Inventory
(40%)
Started
Units to account for
Beginning WIP Inventory
Started and completed
Transferred out
CC
10,000
350,000
360,000
10,000
334,00
0
344,00
0
16,000
360,00
10,00
0
334,0
00
11,20
0
355,2
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
138
Chapter 6
0
b.
00
CC
Units
40,000
480,00
0
520,00
0
40,000
454,00
0
494,00
0
26,000
520,00
0
c.
Beginning WIP Inventory
(55%)
Started
Units to account for
40,00
0
454,0
00
20,80
0
514,8
00
CC
Units
15,00
0
405,0
00
420,0
00
Chapter 6
139
4,200
3,780
420,000 419,580
Units
10,800
CC
24,000
600,000
Accountable for
Completed
Ending WIP Inventory
624,000
(608,000)
16,000
CC
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
140
Chapter 6
Units
24,00
0
584,0
00
13,2
00
584,0 584,00
00
0
16,00
0
624,0
00
16,00 10,400
0
600,0 607,6
00
00
Beginning WIP
Inventory
70,000
70,00
0
445,3
00
To account 515,3
for
00
Started and
completed
Ending WIP Inventory
Accounted for
357,50
0
87,800
515,30
0
DM
Beginning WIP Inventory (70%)
Started & completed
Units
70,000
357,500
357,50
0
87,800
515,300
CC
49,0
00
357,50
0
87,8 30,730
00
437,23
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
141
445,30
0
20.
Units
a
.
Beginning WIP Inventory
(40%)
Started
Units to account for
Beginning WIP Inventory
(60%)
Started and completed
Transferred out
CC
10,00
0
350,0
00
360,0
00
10,00
0
334,0
00
344,0
00
6,000
16,00
0
360,0
00
11,20
0
351,2
00
Units
CC
334,0
00
b.
Beginning WIP Inventory
(30%)
Started
Units to account for
40,000
480,000
520,000
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
142
Chapter 6
40,000
28,000
454,000 454,000
494,000
26,000 20,800
520,000 502,800
Units
15,000
CC
405,000
420,000
15,000
6,750
400,800 400,800
415,800
4,200
3,780
420,000 411,330
Units
CC
d.
Beginning WIP Inventory
(35%)
Started
Units to account for
Beginning WIP Inventory
(65%)
Started and completed
Transferred out
Ending WIP Inventory
10,800
359,100
369,900
10,800
7,020
340,800 340,800
351,600
18,300
8,235
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
143
(45%)
Units accounted for
369,900 356,055
Beginning WIP
Inventory
Started & completed
Ending WIP Inventory
Equivalent units
Units
15,000
DM
DL
OH
15,000
15,000
15,000
25,400
8,890
15,240
DM
DL
OH
b
.
Beginning WIP
Inventory
Started & completed
0
15,000
6,000
3,750
594,600 594,600
594,600 594,600
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
144
Chapter 6
25,400
8,890
15,240
609,490
613,590
25,400
635,000 620,000
c. Equivalent units
(WA)
EUP in beginning
WIP
Inventory
Equivalent units
(FIFO)
624,840
635,000 618,490
(15,000) (9,000) (11,250)
613,590
620,000 609,490
Conversion
c.
Beginning WIP Inventory
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
145
180,000
180,000
3,235,000
3,235,000
165,000
66,000
3,481,000
3,580,000
Material
d.
Beginning WIP Inventory
(0%, 35%)
Started & completed
Conversion
63,000
3,235,0 3,235,00
00
0
Ending WIP Inventory
(100%, 40%)
165,00
0
66,000
FIFO EUP
3,400,0 3,364,00
00
0
DM
CC
e.
WA EUP
3,580,000
3,481,000
Equivalent
units in BI
FIFO EUP
(180,000)
(117,000)
3,400,000
3,364,000
21,600
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
146
Chapter 6
561,000
Units to account
for
b. Units to account
for
Units in BI
582,600
582,600
(21,600)
Units in EI
(13,700)
Units started &
completed
c.
547,300
DM
DL
OH
21,600 21,600 21,600
547,300 547,300 547,300
BI
Started &
completed
EI (75%,
3,425
1,370
25%,
10,275
10%)
EUP (WA) 579,175 572,325 570,270
d.
DM
3,240
DL
8,640
OH
11,880
BI (15%,
40%,
55%)
Started & 547,300 547,300 547,300
completed
EI (75%,
10,275
3,425
1,370
25%,
10%)
EUP
560,815 559,365 560,550
(FIFO)
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
147
e
.
DM
EUP (WA)
Equivalent
units in BI
EUP (FIFO)
DL
OH
579,1 572,3
75
25
570,2
70
DM
Beginning WIP
Inventory
Current period
Total costs
Divided by EUP
Cost per EUP
DL
Overhead
$ $ 19,504 $ 20,640
26,232
104,448
85,200
158,688
$184,920 $123,952 $105,840
53,600 48,800 42,000
$3.45
$2.54
$2.52
DM
25.
WA EUP
DL
48,800
Overhead
42,000
(8,000)
40,800
(7,920)
34,080
53,600
Beginning WIP
EUP
FIFO EUP
(7,200)
46,400
Current period
$104,448
cost
$158,688
$85,200
Divided by EUP
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
148
Chapter 6
46,400
$3.42
DL
40,800
$2.56
OH
34,080
$2.50
Total
26
. a.
Beginning
$ $ 6,320
$ $ 35,940
WIP
19,600
10,020
Current
34,720
173,200
period
54,000
84,480
Total
$ $41,040
$ $209,140
73,600
94,500
b. Total
$
$
$ $209,140
costs
73,600 41,040 94,500
WA
EUP
160,000 152,000 150,000
Cost per
$0.46
$0.27
$0.63
$1.36
EUP
c. Current
costs
FIFO
EUP
Cost
per
EUP
$
54,000
$
34,720
$ $173,200
84,480
$1.37
d. WA
160,000 152,000 150,000
EUP
FIFO
120,000 124,000 132,000
EUP
Beg. WIP 40,000 28,000 18,000
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
149
EUP
Percent
complete
100%
70%
45%
2
7
.
Unit
s
Beginning WIP
Inventory
Beginning WIP
9,800 Inventory
Units started
Units to account for
Unit
s
Canister
s
Beginning WIP
Inventory
Started &
completed
EI
EUP
Other
Materials DL
9,80
0
76,9
00
4,60
0
91,3
00
OH
9,8
00
76,90
0
9,800
9,800
9,800
76,90
0
76,90
0
76,90
0
4,6
00
91,30
0
1,840
920
460
88,54
0
87,62
0
87,16
0
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
150
Chapter 6
Costs:
Beginning
WIP
Current period
Total cost
Divided by
EUP
Cost per
EUP
Canisters
$
6,535
61,94
0
$68,4
75
91,30
0
$0.
75
Other
Materials
$
6,174
86,79
3
$92,9
67
88,54
0
$1.05
DL
OH
Total
$
5,59
4
$
1,070
$
19,37
3
82,0
26
$87,
620
87,620
160,1
76
$161,
246
87,16
0
$1.85
390,9
35
$410,
308
$1.0
0
$4.65
Uni
ts
28.
a
.
Beginning WIP Inventory
Units started
Units to account for
Beginning WIP Inventory
Units started & completed
Total units completed
400
3,8
00
4,2
00
400
3,5
00
3,9
00
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
151
Mate- Converrial
sion
400
400
Material
Beginning
WIP
Current
costs
Total cost
Divided
by
EUP
(WA)
Cost per
EUP
$ 4,349
3,5
00
3,500
180
120
4,0
20
4,080
ConverTotal
sion
$ 4,658
$ 9,007
60,775
46,750
107,525
$65,124
4,020
$51,408
4,080
$116,532
$16.20
$12.60
$28.80
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
152
Chapter 6
2
9
.
Beginning
WIP
Inventory
Units started
Units to account for
Uni
ts
Unit
s
Beginning WIP
9,800
Inventory
9,80
0
76,9
00
4,60
0
91,3
00
Accounted for
Other
Materials
Canisters
Beginning
WIP
Inventory
Started &
completed
EI
EUP
Costs:
Current
period
DL
OH
3,920
5,880
7,840
76,900
76,900
76,900
76,900
4,600
81,500
1,840
82,660
920
83,700
460
85,200
Other
Can- MateDL
isters
rials
$61,940 $86,79
3 $82,02
6
OH
Total
$160,1
76 $390,93
5
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
153
Divided by
EUP
Cost per
EUP
85,200
$1.8
8
$4.67
Unit
s
30.
a
.
Beginning WIP Inventory
Units started
Units to account for
Beginning WIP Inventory
Units started & completed
Total units completed
40
0
3,80
0
4,20
0
40
0
3,50
0
3,90
0
Beginning WIP
Inventory
Units started &
completed
Ending WIP
Inventory
EUP
Material
120
Conversion
60
3,500
3,500
120
180
3,740
3,740
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
154
Chapter 6
b.
Current
costs
Divided by
EUP
(FIFO)
Cost per
EUP
Material
$60,775
Conversion
Total
$46,750
$107,525
3,740
3,740
$16.25
$12.50
$28.75
31. a.
390,000 ($7.50 + $9.00 + $10.20) = 390,000 $26.70 =
$10,413,000
b. DM: $7.50 (55,500
100%)
DL: $9.00 (55,500
30%)
OH: $10.20 (55,500
25%)
Total of ending inventory
$416,250
149,850
141,525
$707,625
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
155
$
458,482.
00
Cost to complete:
DM (42,600 20%
$10.74)
DL (42,600 55%
$13.88)
OH (42,600 70%
$24.80)
$
91,504.
80
325,208
.40
739,536
.00
1,156,24
9.20
$1,614,7
31.20
$
1,614,731.20
75,484,108.00
$
77,098,839.20
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
156
Chapter 6
c.
$106,755.60
59,128.80
176,080.00
$341,964.40
$77,098,839.20
341,964.40
$77,440,080.60
33. a. Because direct material (other than packaging) is 100 percent complete
at the
start of production, the number of EUP shown for direct material is also the
number of units in BI.
Material (54,000 54,000) = 100%
Packaging (0 54,000) = 0%
Labor (16,200 54,000) = 30%
Overhead (18,900 54,000) = 35%
b. Beginning WIP Inventory:
DM (other than packaging)
DL
$789,0
40
91,8
62
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
157
Overhead
145,90
8
Complete beginning WIP
Inventory:
Packaging (54,000
100% $3.00)
DL (54,000 70%
$10.84)
Overhead (54,000
65% $7.68)
$1,026,
810
$162,0
00
409,75
2
269,56
8
841,320
$1,868,13
0
$354,000
39,024
50,688
$443,712
1,000
8,400
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
158
Chapter 6
Units to account
for
9,400
Units
Beginning WIP
Started & completed
Ending WIP
Units accounted
for
1,000
8,100
Material
1,000
8,100
Conversion
1,000
8,100
300
9,400
240
9,340
210
9,310
Total
Material Conversion
Beginning $ 5,006.30 $ 4,133.20 $ 873.10
WIP
Current
86,354.00 62,928.00 23,426.00
period
Total
$91,360.30 $67,061.20 $24,299.10
costs
EUP
9,340
9,310
Cost per
$9.79
$7.18
$2.61
EUP
b. Cost transferred out = 9,100 $9.79 = $89,089
c. Ending WIP
DM (240
$1,723.20
$7.18)
CC (210
548.10
$2.61)
Total
$2,271.30
d.
Units
Mate- Conversion
rial
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
159
Complete BI
(40%, 70%)
Started & completed
Ending WIP
1,000
700
400
8,100
8,100
8,100
300
210
240
Units accounted
for
9,400
Total
$ 5,006.30
9,010
8,740
Material
Conversion
Beginning WIP
Current
86,354.00 $62,928.00 $23,426.00
Period
Total
$91,360.30
costs
EUP
8,740
9,010
Cost per
$9.80
$7.20
$2.60
EUP
e. Transferred out:
Costs in BI
Cost to complete BI
DM (400 $7.20)
CC (700 $2.60)
Started & completed
(8,100 $9.80)
$5,006.30
2,880.00
1,820.00 $ 9,706.30
79,380.00
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
160
Chapter 6
$89,086.30
$1,728
546
$2,274
WIP Inventory
RM Inventory
62,928
WIP Inventory
Wages Payable (or
Cash)
13,070
WIP Inventory
Factory Overhead
Control
10,356
FG Inventory
WIP Inventory
89,089
62,928
13,070
10,356
89,089
Cost per Total
EUP
Cost
$10 $40,000
2
6
0
19,200
$18
$59,200
Chapter 6
161
tory
WIP Inventory
Casing Dept.
450,000
36. a. Beginning
Beginning WIP
WIP
5,000
Inventory
Inventory
Transferred in 80,000 Started & completed
Units to ac85,000 Ending WIP Incount for
ventory
Units accounted
for
5,000
74,000
6,000
85,000
Units
Beginning
WIP Inventory
Started &
completed
Ending
WIP Inventory
EUP (WA)
74,000 74,000
74,000
74,000
6,000
4,800
85,000 85,000
79,000
83,800
6,000
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
162
Chapter 6
b. Costs
Total
Beginning $
WIP Inventory
Current
104,261 80,000 10,270
13,991
period
Total cost $112,904 $87,550 $10,270 $15,084
to account for
Divided
83,800
by EUP
85,000 79,000
Cost per
$1.34
$1.03
$0.13
$0.18
EUP
c.
d. Transferred in (6,000
$1.03)
Conversion (4,800
$0.18)
Total ending WIP cost
37. a. Beginning
WIP
Inventory
Transferred in
Units to account for
$6,180
864
$7,044
Beginning WIP
5,000
Inventory
80,000 Started & completed
85,000 Ending WIP Inventory
Units accounted
for
Units
Ma-
5,000
74,000
6,000
85,000
Conver-
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
163
Tran.
In
Complete BI
Started & completed
Ending WIP Inventory
EUP (WA)
b. Costs
5,000
74,00
0
0
74,00
0
6,000
85,00
0
6,000
80,00
0
Total Trans.
In
Beginning WIP
Inventory
sion
5,000 3,500
74,00 74,000
0
4,800
0
79,00 82,300
0
Mate- Converrial
sion
$
8,643
Current period
Total cost to account for
Divided by EUP
terial
104,2
61
$112,
904
$80,0
00
$10,2 $13,99
70
1
80,00
0
$1.00
79,00 82,300
0
$0.13 $0.17
$1.30
c. Beginning WIP costs $8,643
Cost to complete:
650
DM (5,000 $0.13)
595 $ 9,888
CC (3,500 $0.17)
Started and completed
96,200
(74,000 $1.30)
Cost transferred out
$106,088
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
164
Chapter 6
d.
Transferred $6,000
in (6,000
$1.00)
Conversion (4,800 $0.17)
816
Total ending WIP cost
$6,816
38. a. Fabrication:
Beginning
WIP
Inventory
Started
Units to account for
Beginning WIP
5,000
Inventory
5,000
33,200
6,800
45,000
Beginning WIP
Inventory
Started & com- 33,200 33,200
pleted
Ending WIP
6,800 6,800
Inventory
EUP (WA)
45,000 45,000
33,200
4,080
42,280
Chapter 6
165
Beginning
WIP
Inventory
Started
Beginning WIP
2,000
Inventory
2,000
Units
32,100
6,100
40,200
Material Conversion
Trans.
In
2,000 2,000
Beginning
WIP Inventory
Started & 32,100 32,100
completed
Ending
6,100 6,100
WIP Inventory
EUP (WA) 40,200 40,200
2,000
2,000
32,100
32,100
915
34,100
35,015
b. Fabrication:
Unit
s
Beginning WIP
Inventory
Mate- Converrial
sion
5,00
0 3,750
0
33,2 33,20 33,20
00
0
0
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
166
Chapter 6
EUP (FIFO)
Assembly:
Units
Beginning
WIP Inventory
Started & 32,100 32,100
completed
Ending
6,100 6,100
WIP Inventory
EUP
40,200 38,200
(FIFO)
39. a. Beginning WIP
Inventory
Started
Total
32,100
32,100
915
34,100
34,315
35
2,435
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
167
Cost of goods
transferred out:
Direct material:
Dacron (250
$10)
Denim (480
$8)
Cotton (1,670
$12)
Direct labor
(2,400 $9)
Overhead (2,400
$6)
Total
b. Cost of ending WIP Inventory:
Direct material:
Dacron (50 $10)
Denim (20 $8)
Cotton (30 $12)
Direct labor (25 $9)
Overhead (35 $6)
Total
$ 2,500
3,840
20,040
$26,380
21,600
14,400
$62,380
$500
160
360
$1,02
0
225
210
$1,45
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
168
Chapter 6
5
40. a. Beginning WIP
Inventory
Started
Total
0
130
130
105
25
130
Material Conversion
105
105
25
15
130
120
$1,560
180
196
$1,936
2,415
$4,351
$364
345
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
169
Total
$709
12,000
310,000
322,000
12,000
302,000
8,000
322,000
Ingred. Packaging Conversion
0
12,000
3,600
302,000
0
302,000
4,800
314,000
310,400
$2,000
1,776
$3,776
$18,000
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
170
Chapter 6
CC (180,000 45%
$0.11)
Total cost in BI
8,910
$26,910
b. DM (144,000 100%
$0.10)
CC (144,000 65%
$0.11)
Total cost in EI
$14,400
c.
180,000
10,296
$24,696
1,300,000
1,480,000
Material
To complete BI
(units)
0
Started & com- 1,156,000
pleted
Ending inventory
144,000
Equivalent units
(FIFO)
1,300,000
Multiply by unit
cost
0.10
La-
OH
bor
99,000
99,000
1,156,000
1,156,000
93,600
93,600
1,348,600
1,348,600
0.02
0.09
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
171
Standard cost of
period
Actual cost of
period
Variance
$
130,000
(184,000)
$
(54,000) U
26,972
(27,126)
$
(154) U
$
121,374
(118,500)
$
2,874 F
e.
Work in Process
130,000
Inventory
Material Variance
54,000
Raw Material In184,000
ventory
Work in Process Inventory
Labor Variance
Wages Payable (or
Cash)
26,972
121,374
43. a
& b.
154
27,126
118,500
2,874
Units Mate- Conrial version
Beginning inventory
(60%; 70%)
16,00
0
Gallons started
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
172
Chapter 6
360,0
00
Gallons to account for
376,0
00
Beginning inventory
completed
Gallons started and
completed
6,400
4,800
16,00
0
349,2 349,20
349,2
00
0
00
3,200
1,600
8,000
2,800
0
0
358,8 355,60
376,0
00
0
00
*All spoilage is normal; the 2,800 gallons is less than 0.02 360,000.
44. Normal spoilage allowed = 120,000 pounds 0.08 = 9,600 pounds
Units
Beginning inventory
Pounds started
Pounds to account for
Material
Conversion
36,000
120,000
156,000
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
173
19,800
90,000
3,240
0
113,040
Material
Conversion
$
39,060
$ 33,912
$24,800
72,972
$97,772
113,040
111,600
$0.65
$0.35
$0.30
Cost Assignment
Transferred out:
Beginning WIP Inventory cost $24,800
Conversion cost to complete
5,940
(19,800 $0.30)
Total cost of beginning inven- $30,740
tory
Started & completed (90,000 58,500 $89,240
$0.65)
Ending WIP Inventory:
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
174
Chapter 6
$ 7,560
972
8,532
$97,772
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
175
140,000
(116,400)
(16,000)
7,600
Units
Material
Conversion
116,400
3,200
Beginning inventory
Units started
Units to account for
20,000
120,000
140,000
0
4,000
123,600
176
Chapter 6
Material
Conversion
BI completed
40,000
0
Started & com- 405,000 405,000
pleted*
Ending inven10,000 10,000
tory
Normal spoil2,000
0
age
Abnormal
8,000
8,000
spoilage
EUP (FIFO)
465,000 423,000
6,000
405,000
46.
a.
Beginning inventory
Pounds started
Pounds to account for
40,000
425,000
465,000
2,500
0
5,600
419,100
Chapter 6
177
c. Abnormal spoilage:
Material (8,000 $0.08)
Conversion (5,600
$0.15)
Total cost (treated as a
loss)
$ 640
840
$1,480
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
178
Chapter 6
PROBLEMS
Units
47.
a.
Material
Conversion
Beginning
200,000
WIP Inventory
Units start- 1,000,000
ed
Units to ac- 1,200,000
count for
Beginning
200,000 200,000
WIP Inventory
Started &
700,000 700,000
completed
Ending WIP 300,000 300,000
Inventory
Units ac1,200,000 1,200,000
counted for
200,000
700,000
210,000
1,110,000
Total
Material Conversion
$ 2,275,000 $1,200,000 $1,075,000
14,162,000
7,800,000
6,362,000
Chapter 6
179
cost to
account
for
Divided
by EUP
Cost per
EUP
$14.20
1,200,000
$7.50
c.Transferred out
1,110,000
$6.70
$12,780,000
(900,
000
$14.2
0)
Ending inventory:
Material (300,000 $2,250,000
$7.50)
Conversion
1,407,000
3,657,000
(210,000 $6.70)
Total cost accounted for
$16,437,000
48. a.
(1)
Material
BI units
Units started &
completed
EI unit
EUP
(2)
BI
Labor
Overhead
100,000 100,000 100,000
1,100,000 1,100,000 1,100,000
400,000 240,000 240,000
1,600,000 1,440,000 1,440,000
Total
Materi- Labor
Overal
head
$
$
$
$
1,115,5 750,000 215,000 150,500
00
Current
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
180
Chapter 6
EUP
1,600,0 1,440,0 1,440,0
00
00
00
Cost per
$9.10
$4.00
$3.00
$2.10
EUP
(3) Beginning FG Inventory
CGM (1,200,000
$9.10)
Goods available for
sale
Ending FG Inventory
CGS
0
10,920,000
$10,920,000
(124,000)
$10,796,000
Chapter 6
181
(36,000)
229,500
b.
Material
$
183,510
Labor
Overhead
36,000 36,000
206,000 206,00
0
3,525
2,350
245,525 244,35
0
Labor
Overhead
$
$
98,526 78,273
Current costs
Total cost
EUPFIFO
Cost per EUP
1,136,0
25
$1,319,
535
265,500
$4.97
451,450 723,19
5
$ $801,4
549,976
68
245,525 244,35
0
$2.24 $3.28
182
Chapter 6
c.
DM (23,500
$
4
.
9
7
)
DL (3,525 $2.24)
OH (2,350
$3.28)
Total EI
50.
a.
$116,795
7,896
7,708
$132,399
Delacroix Co.
Cost of Production Report
For the Month of March 2013
Production Data
Beginning Inventory
Units started
Units to account
for
Beginning WIP
Inventory
Started & completed
Ending WIP Inventory
Units accounted
for
800
800
800
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
183
Cost Data
Total
Beginning WIP
Inventory
Current costs
Total cost to account for
Divided by EUP
Cost per EUP
505,4
22
$526,
560
$43.5
0
Cost Assignment
Transferred out (11,800
units $43.50)
Ending Inventory:
Material (280 $22)
Labor (360 $5.50)
Overhead (320 $16)
259,0
12
$265,
760
12,08
0
$22.0
0
WIP Inventory
188,21
0
$193,9
20
12,120
$16.00
$513,3
00
$6,160
1,980
5,120
13,260
$526,5
60
58,20
0
$66,8
80
12,16
0
$5.50
XXX
XXX
259,01
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
184
Chapter 6
2
Raw Material Inventory
259,01
2
WIP Inventory
Wages Payable
58,200
WIP Inventory
188,21
0
58,200
188,21
0
XXX
XXX
513,30
0
WIP Inventory
Cost of Goods Sold (for the
cost of sales)
Finished Goods Inventory
c Raw Material Inventory
.
Beg. XX Is259,01
X sued
2
Purc XX
h.
X
513,30
0
XXX
XXX
WIP Inventory
Be 21,13 CG
g.
8 M
D
259,0
M
12
DL 58,20
0
513,3
00
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
185
OH 188,2
10
En 13,26
d.
0
End. XX
X
Wages Payable
DL
58,20
0
FG Inventory
Be XXX C
XXX
g.
GS
CG 513,3
M
00
En XXX
d.
Accounts Payable
RM Purch.
XXX
51.
a.
Beginning WIP
Inventory
Units started
20,000
321,600
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
186
Chapter 6
Units to account
for
Beginning WIP
Inventory
Started & completed
Ending WIP Inventory
Units accounted
for
341,600
20,000
12,000
305,600 305,600
305,600
16,000
b.
16,000
12,800
341,600 321,600
330,400
Total
Material Conversion
53,580
Beginning
$
WIP cost
Current cost
1,055,808 $778,272
Total cost to $1,109,388
account for
Divided by
EUP
321,600
Cost per EUP
$3.26
$2.42
c.Beginning WIP
$277,536
330,400
$0.84
$53,580
I
n
v
e
n
t
o
r
y
Complete WIP
CC (12,000
$0.84)
10,080 $
63,660
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
187
996,256
$1,059,916
d.
DM (16,000 $2.42)
CC (12,800 $0.84)
Total cost of ending WIP
Inventory
$38,720
10,752
$49,472
242,000
23,500
265,500
(36,000)
229,500
b.
Material
Beginning
WIP Inventory
Started &
completed
Ending WIP
Inventory
EUPFIFO
Labor
0
16,200
Overhead
10,800
206,000
206,000
206,000
23,500
3,525
2,350
229,500
225,725
219,150
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
188
Chapter 6
Material
Labor Overhead
Current costs $1,136,025 $451,450 $723,195
EUPFIFO 229,500
225,725 219,150
Cost per
$4.95
$2.00
$3.30
EUP
Beginning WIP ($183,510 + $98,526 + $78,273)
Complete beginning WIP Inventory
DL (16,200 $2.00) $32,400
CC (10,800 $3.30)
35,640
68,040
Total cost of BI trans$428,349
ferred
$360,309
Chapter 6
189
OH (2,350
$3.30)
Total EI
53. a.
7,755
$131,130
Delacroix Co.
Cost of Production Report
For the Month of March 2013
Production Data:
Units
Beginning in800
ventory
Units started
11,400
Units to ac12,200
count for
Beginning
WIP Inventory
Started &
completed
Ending
inventory
Units accounted
for
Material
Labor
Overhead
800
440
280
480
11,000
11,000
11,000
11,000
400
280
360
320
12,200
11,720
11,640
11,800
Cost DaTotal
Materi- Labor Overhead
ta:
al
Cost in BI $ 21,138
Current
505,422 $259,012 $58,200 $188,210
costs
Total cost $526,560
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
190
Chapter 6
to account for
Divided
by EUP
Cost per
EUP
11,720
$43.05
$22.10
11,800
11,640
$5.00
$15.95
Cost Assignment
Transferred out:
Beginning WIP In- $21,138
ventory
Cost to complete:
Material (440
9,724
$22.10)
Labor (280 $5.00)
1,400
Overhead (480
7,656 $ 39,918
$15.95)
Started & completed
473,550
(11,000 $43.05)
Ending WIP Inventory:
Material (280
$
$22.10)
6,188
Labor (360 $5.00)
1,800
Overhead (320
13,092
$15.95)
5,104
Total cost accounted
$526,560
for
b. WA and FIFO process costing differ because of how the work performed
in the prior period on beginning WIP Inventory is treated. WA includes
such work in the determination of equivalent units of production, whereas
FIFO does not. In addition, because WA includes the beginning inventory
work in EUP, this method also includes the cost of beginning inventory in
the determination of cost per EUP (whereas FIFO excludes it). These two
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
191
items cause the cost per EUP to differ and, thus, the cost of the goods
transferred out as well as the cost of ending inventory.
54. a.
Phunky Phingers
Cost of Production Report (WA Method)
For the Month of November 2013
Production Data:
Beginning WIP
Inventory
Units started
Units to account
for
Units
12,000
90,000
102,000
Units
Mate- LaOH
rial
bor
12,000 12,000 12,000
$
19,564
Material Labor
OH
$
$ 1,908 $ 4,636
13,020
45,792
70,824
206,616 90,000
$
$47,700 $75,460
226,180 $103,020
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
192
Chapter 6
Divided by
EUP
Cost per
EUP
102,000
$2.31
90,000
$0.53
98,000
$0.77
$1.01
Cost Assignment:
Transferred out (82,000
$189,420
$2.31)
Ending inventory:
Material (20,000
$20,200
$1.01)
Direct labor (8,000
4,240
$0.53)
Overhead (16,000
12,320
36,760
$0.77)
Total cost accounted
$226,180
for
b.
Phunky Phingers
Cost of Production Report (FIFO Method)
For the Month of November 2013
Production Data:
Units
12,000
Beginning WIP
Inventory
Units started
90,000
Units to account 102,000
for
Units
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
193
Beginning WIP
Inventory
Started & completed
Ending WIP Inventory
Units accounted
for
12,0
0
00
70,0 70,000
00
20,000
20,00
0
102,0 90,000
00
8,400 4,800
70,00 70,00
0
0
16,00
8,000
0
86,40 90,80
0
0
Cost Data:
Total
Beginning WIP
Inventory
Current costs
Cost to account
for
Labor
Overhead
$
19,564
$90,00
206,61
0
6
$45,7 $70,8
92
24
$226,1
80
Divided by EUP
Cost per EUP
Material
90,000
$2.31
Cost Assignment:
Transferred out:
Beginning WIP Inventory
Complete beginning WIP
DL (8,400 $0.53)
$1.00
86,40 90,80
0
0
$0.53 $0.78
$19,564
4,452
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
194
Chapter 6
OH (4,800 $0.78)
$ 27,760
3,744
Springtime Paints
Cost of Production Report
For Month Ended May 31, XXXX
4,00 4,000
0
16,0 16,000
00
5,000
5,00
0
4,000
4,000
16,00
0
16,00
0
4,000
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
195
Units accounted
for
Cost data:
Beginning inventory
25,0 25,000
00
20,00
0
24,00
0
DIRECT
MATERIALS
Total Chemi- Cans Concals
version
$
$
$
$
51,90 45,100
0 6,800
0
Current costs
Cost to account
for
Divided by
EUP
281,9 228,90
00
0
$333, $274,0
800
00
25,000
$13. $10.96
51
7,000
$
7,000
20,00
0
$0.35
46,00
0
$52,8
00
24,00
0
$2.20
Cost assignment:
Transferred out
$270,200
($13.51 20,000)
Ending WIP
Chemicals (5,000 $54,800
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
196
Chapter 6
$10.96)
Conversion (4,000
$2.20)
Total cost accounted
for
b.
8,800
63,600
$333,800
Springtime Paints
Cost of Production Report
For Month Ended May 31, XXXX
4,000
16,00
0
5,000
25,00
0
16,00
0
4,000
16,00
0
3,000
16,00
0
5,000
21,00
0
0
20,00
0
4,000
23,00
0
Cost data:
DIRECT MATERIALS
Total Chem- Cans Conicals
version
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
197
Beginning inventory
$
51,90
0
Current costs
Cost to account
for
Divided by EUP
Cost per equivalent unit
281,9
00
$333,
800
$13.2
5
Cost assignment:
Transferred out
Beginning WIP Inventory
Complete beginning
WIP
Cans (4,000
$0.35)
Conversion (3,000
$2.00)
Total cost of BI transferred
Started & completed
(16,000 $13.25)
Ending WIP Inventory
Chemicals (5,000
$10.90)
Conversion (4,000
$2.00)
$228,
900
$
7,000
$46,0
00
21,00
0
$10.9
0
20,00
0
$0.35
23,00
0
$2.00
$ 51,900
1,400
6,000
$ 59,300
$271,3
212,0
00
00
$ 54,500
8,000
62,500
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
198
Chapter 6
$333,8
00
c. The WA calculations are easier to make, but this method tends to obscure
current period costs because the cost per EUP includes both current costs
and prior costs that were in beginning inventory. This method is most appropriate when conversion costs, inventory levels, and raw material prices
are stable.
The FIFO method is based on current period work only. This method is
most appropriate when conversion costs, inventory levels, or raw material
prices fluctuate. This method should also be appropriate when accuracy in
current equivalent unit costs is important or when a standard cost system is
used.
(CMA adapted)
56.
DM
DL
OH
TI
Beginning
WIP
8,000
Inventory
Units started 40,000
Units to ac- 48,000
count for
Beginning
WIP
Inventory
8,000
8,000
8,000 8,000
8,000
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
199
Started &
36,000
36,000
completed
36,000 36,000
36,000
Ending WIP
Inventory 4,000
2,000
4,000 2,800
1,600
Units ac48,000
46,000
counted for
48,000 46,800
45,600
Cost Data:
Total
TI
DM
DL
OH
Beginning
WIP
$ 278,872 $ 200,160 $ 42,504 $ 31,360 $ 4,848
Inventory
Current
2,739,020 1,620,000 333,300 517,880 267,840
costs
Cost to
ac$3,017,892 $1,820,160 $375,804 $549,240 $272,688
count
for
Divided
by
48,000 46,800 46,000 45,600
EUP
Cost per
$63,87
$37.92
$8.03
$11.94
$5.98
EUP
Cost Assignment:
Transferred out
$2,810,280
(44,000 $63.87)
Ending WIP Inventory:
TI (4,000 $37.92) $151,680
DM (2,800 $8.03)
22,484
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
200
Chapter 6
DL (2,000
$11.94)
OH (1,600 $5.98)
Total cost accounted
for
23,880
9,568
207,612
$3,017,892
(CMA adapted)
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
57.
201
Production
Data:
Units
TI
DM
DL
OH
Beginning
WIP
8,000
Inventory
Units start- 40,000
ed
Units to ac- 48,000
count for
Beginning
WIP
8,000
0 1,600 4,800 5,600
Inventory
Started &
complet- 36,000 36,000 36,000 36,000 36,000
ed
Ending
WIP
4,000 4,000 2,800 2,000 1,600
Inventory
Units ac40,000 40,400 42,800 43,200
counted for
Cost Data:
Total
TI
DM
DL
OH
Beginning
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
202
Chapter 6
WIP
Inventory
Current
costs
$
278,87
2
$1,620,
2,739,0
000
20
Cost to
account $3,017,
for
892
Divided
by EUP
Cost per
EUP
40,000
$67.05 $40.50
$333,
300
$517,
880
$267,
840
40,40
0
$8.25
42,80
0
$12.1
0
43,20
0
$6.20
Cost Assignment:
Transferred out:
Beginning WIP In$ 278,872
ventory
Complete beginning
inventory:
DM (1,600
$ 13,200
$8.25)
DL (4,800
58,080
$12.10)
OH (5,600
34,720
106,000
$6.20)
Started & completed
2,413,800
(36,000 $67.05)
Total cost of transferred
$2,798,672
out
Ending WIP Inventory:
TI (4,000
$162,000
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
203
$40.50)
DM (2,800
$8.25)
DL (2,000
$12.10)
OH (1,600
$6.20)
Total cost accounted
for
23,100
24,200
9,920
219,220
$3,017,892
(CMA adapted)
58.a.
Production Data:
Units
Beginning WIP
Inventory
Units started
Units to account for
8,000
36,000
44,000
Units
Beginning WIP
Inventory
Material
8,000
Conversion
8,000
8,000
Started & com-
32,400
32,400
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
204
Chapter 6
pleted
Ending WIP
Inventory
Units accounted for
32,400
3,600
2,520
3,600
44,000
42,920
44,000
Cost Data:
Total
Beginning WIP
Inventory
Material
$ $
373,000 293,000
Conversion
$
80,000
Current costs
Total cost to account for
Divided by EUP
Cost per EUP
44,000 42,920
$70
$32
$38
Cost Assignment:
Transferred out
(40,400 $70)
Ending inventory:
Material (3,600
$38)
Conversion (2,520
$32)
Total cost accounted for
$2,828,000
$136,800
80,640
217,440
$3,045,440
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
b.
205
2,500
2,500
39,200
39,200
840
41,700
42,540
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
206
Chapter 6
Cost
Data:
Total
Trans. In Material Conversion
Cost in $ 173,413 $ 166,420 $
0 $ 6,993
BI
Current 3,457,760 2,828,000 383,640
246,120
costs
Total to $3,631,173 $2,994,420 $383,640 $253,113
acct.
for
Divided
42,900 41,700
42,540
by
EUP
Cost
$84.95
$69.80
$9.20
$5.95
per
EUP
Cost Assignment:
Transferred out (41,700
$3,542,415
$84.95)
Ending inventory:
Transferred in
$83,760
(1,200 $69.80)
Conversion (840
4,998
88,758
$5.95)
Total cost accounted for
$3,631,173
59. a. Striping Dept.:
Beginning inventory
Current costs:
DM
DL
OH ($80,000 0.8)
$ 20,000
90,000
80,000
64,000
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
207
Total
Less ending inventory
Costs transferred to
Adhesion
$254,000
(17,000)
$237,000
WIP Inventory
Adhesion
WIP Inventory
Striping
237,000
WIP Inventory
Packaging
WIP Inventory
480,000
237,000
480,000
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
208
Chapter 6
Adhesion
880,000
720,000
880,000
720,000
1,300
260
325
3,700
1,100
6,100
3,700
440
4,400
3,700
220
4,245
Coating
Department:
Beginning
WIP Inventory
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
209
Units started
5,000
Units to ac- 5,900
count for
Beginning
900
0
WIP Inventory
Started &
3,600 3,600
completed
Ending WIP 1,400 1,400
Inventory
EUP
5,900 5,000
900
360
3,600
3,600
560
4,500
4,520
b. Cutting Department:
Total
Beginning WIP $16,065
Inventory
Current costs
56,425
Total cost to
account for
$72,490
Divided by
EUP
Cost per EUP
$13
Material
Conversion
$35,200
$21,225
4,400
4,245
$8
$5
210
Chapter 6
$5)
S&C (3,700 $13)
Total cost of goods
transferred
Ending WIP:
DM (440 $8)
48,100
51,805
$67,870
$
3,520
CC (220 $5)
4,620
1,100
Total
$72,490
d. Coating
Department:
Total
Cost in BI $13,514
Current
84,120 $67,870 $4,950
costs
Total
$97,634
Divided
4,500
by EUP
5,000
Cost per $17.17 $13.57*
$1.10
EUP
*Rounded
$11,300
4,520
$2.50
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
211
e. Cost Assignment:
Transferred out
Beginning inventory cost
Cost to complete:
Material (900 $1.10)
Conversion (360
$2.50)
Units S&C (3,600
$17.17)
Total cost transferred out
Ending inventory:
Transferred in (1,400
$13.57)
Conversion (560
$2.50)
Cost accounted for (off due
to rounding)
61. a.
Extrusion
16,000
Units produced
Material
costs
Conversion
cost
Unit cost
990
900 $15,404
61,812
$77,216
$18,998
1,400
20,398
$97,614
Form
Trim
Finish
5,000
2,000
$
24.50
$
12.00
$
15,00
0
$
3.00
$
69,00
0
$
13.80
$12,0
00
$
12.00
$392,0
00
11,00
0
$
44,00
0
$
4.00
$132,
000
$192,0
00
Unit cost
$13,514
Plastic Standard
$
6.00
$42,0
00
$
21.00
Deluxe
Executive
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
212
Chapter 6
Unit costs:
Sheets Model
Model
Model
Extrusion mate- $ 12.00 $ 12.00 $ 12.00 $ 12.00
rial
Form material
4.00
4.00
4.00
Trim material
3.00
3.00
Finish material
6.00
Extrusion con24.50
24.50
24.50
24.50
version
Form conversion
12.00
12.00
12.00
Trim conversion
13.80
13.80
Finish conver
21.00
sion
EQUIVALENT UNITS
Material Conversion
Entering trim operation:
2,000 Deluxe
units
1,000 Deluxe
units
2,000 Executive
units
Total equivalent
units
Deluxe model WIP
costs:
Extrusion material
%
Qty. %
100 2,00 100
0
100 1,00
60
0
100 2,00 100
0
5,00
0
Unit
Total
Cost
Costs
$12,000
$12.0
Qty.
2,00
0
600
2,00
0
4,60
0
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
213
0
Form material
4,000
4.00
Trim material
(100%)
Extrusion conversion
Form conversion
3.00
3,000
24,500
24.50
12,000
12.00
Trim conversion
(60%)
Work in process
costs
9,000*
9.00*
$64,500
$64.5
0
214
Chapter 6
BI
15,000
Started
520,000
Units to account for535,000
Units
DM
Logos
Streamers
BI
15,000
Started and completed511,000
Completed
526,000 526,000443,000461,00032,800
EI
9,000 9,000 2,250
450
0
Units accounted for535,000535,000445,250461,45032,800
BI cost
$ 17,285$ 13,250$ 4,035$
0$
0
Current period 888,274 468,250 298,735 119,977 1,312
Total DM cost $905,559$481,500$302,770$119,977$ 1,312
EUP
535,000 445,250461,450 32,800
Material cost per EUP
$0.90 $0.68
$0.26
$0.04
Conversion
Units
EUP
BI
15,000
Started and completed511,000
Completed
526,000 526,000
EI (95% complete) 9,000 8,550
Units accounted for535,000534,550
Conversion costs = $5,703 + $282,954 = $288,657
Conversion cost per EUP = $288,657 534,550 = $0.54
Total cost to account for = $905,559 + $288,657 = $1,194,216
Cost of ending WIP towels:
Plain towels
DM (6,300 $0.90)
$5,670.00
CC (6,300 0.95 $0.54) 3,231.90 $ 8,901.90
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Handles
Chapter 6
215
Sales
Ending
Plain
2,000 ($0.90 + $0.54)$2,880.00
W/logos & streamers
500 ($1.84 + $0.54)1,190.00
W/logos, streamers, & handles200 ($1.88 + $0.54)484.00
W/streamers
25 ($1.16 + $0.54) 42.50
W/streamers & handles
70 ($1.20 + $0.54) 121.80
W/handles
650 ($0.94 + $0.54) 962.00
Total cost of ending FG Inventory
$5,680.30
c. Plain
58,000 ($0.90 + $0.54) $ 83,520.00
W/logos & streamers
417,500 ($1.84 + $0.54) 993,650.00
W/logos, streamers, & handles
24,800 ($1.88 + $0.54)
60,016.00
W/streamers
15,175 ($1.16 + $0.54)
25,797.50W/streamers & handles
2,730 ($1.20 + $0.54)
4,750.20
W/handles
4,350 ($0.94 + $0.54)
6,438.00
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
216
Chapter 6
$1,174,171.70
Cost of ending WIP Inventory$ 14,364.00
Cost of ending FG Inventory 5,680.30
Cost of goods sold
1,174,171.70
Total cost accounted for $1,194,216.00
d. The conversion cost for all towels should not be the same amount. Each of
the different add-ons creates additional costs for labor and overhead. As
such, Randazzo should be dividing these costs into different cost pools and
assigning them based on alternative bases. Activity-based costing would be
useful in this company.
Units Material Conversion
63.
a.
Beginning invento- 10,000
ry
Units started
180,000
Units to account for 190,000
Beginning invento- 10,000
0
ry completed
Units started &
140,000 140,000
completed
Units completed
150,000
Ending inventory
40,000 40,000
EUP
190,000 180,000
b.
3,000
140,000
24,000
167,000
Donbrowski Co.
Cost of Production Report
For the Month of May 2013
Production Data:
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
217
Beginning inventory
Units started
Units to account for
Beginning inventory completed
Units started &
completed
Ending inventory
EUP
3,000
140,000 140,000
140,000
40,000
40,000
24,000
190,000 180,000
167,000
Materi- Conal
version
$
$
55,000 55,000
87,500
$
87,500
990,000
990,00
0
2,087,5
2,087,5
00
00
$3,220, $1,045, $2,175,
000
000
000
Cost Assignment
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
218
Chapter 6
$2,700,000
$220,000
300,000
520,000
$3,220,000
Conversion:
Current actual cost
Standard cost (167,000
$12.50)
Conversion cost variance
Cost of Goods Sold
Direct Material
Variance
(990,000)
$
11,000 U
$
2,136,000
(2,087,500)
$
48,500 U
59,500
11,000
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
219
Conversion Cost
Variance
Units
64.
a.
48,500
Material
Labor
Overhead
BI
14,800
Units start- 385,000
ed
Units to ac- 399,800
count for
BI completed
Units S&C
Units completed
EI
EUP
14,800
8,880
4,440
380,700
4,300
4,300
2,580
399,800 385,000 392,160
3,655
388,795
b. Total BI cost:
DM (14,800 $8.25)$122,100
DL (5,920 $1.60) 9,472
OH (10,360 $4.90) 50,764
Total cost of BI
$182,336
c. Cost transferred out = 395,500 $14.75 = $5,833,625
Cost in EI:
DM (4,300 $8.25) $35,475.00
DL (2,580 $1.60) 4,128.00
OH (3,655 $4.90) 17,909.50
Total cost of BI
$57,512.50
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
220
Chapter 6
252,000
(238,200)
(6,000)
7,800
Material Conversion
d.
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
221
Beginning WIP
2,000
Inventory
Started
250,000
Units to account 252,000
for
Beginning WIP
Inventory
Started & completed
Ending WIP Inventory
Normal loss
Abnormal loss
EUP (WA)
e.
2,000
2,000
2,000
236,200 236,200
236,200
6,000
6,000
1,800
2,500
5,300
5,300
252,000 249,500
5,300
245,300
Total
Material Conversion
$ 1,957 $ 1,807 $
150
Beginning
WIP costs
Current costs
264,588 240,208
24,380
Total costs
$266,545 $242,015 $ 24,530
Divide by
245,300
EUP
249,500
Cost per EUP
$1.07
$0.97
$0.10
Transferred out (238,200
$254,874
$1.07)
Ending inventory:
$5,820
Material (6,000
$0.97)
180
6,000
Conversion (1,800
$0.10)
Abnormal spoilage (5,300
5,671
$1.07)
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
222
Chapter 6
$266,545
f. The easiest way to reduce shrinkage loss is to buy higher quality turkey at a
higher input cost per pound. The higher quality would have a lower fat
content and would shrink less. Because of the reduced shrinkage, conversion cost per pound of finished product might decline, and the company
would probably be able to sell its product at a higher price.
g. The approximate cost of April turkey was $1.13 per pound ($1,807 BI cost
of turkey 1,600 EUP pounds in BI), while the average cost per pound in
May was approximately $0.97 per pound. It is highly likely that buying the
lower-priced ground turkey was the cause of the abnormally high spoilage
rate. The information on the cost differences between April and May is not
clear when using weighted average process costing.
66. a.
Beginning
WIP
1,000
Inventory
Transferred 50,800
in
Units to
account 51,800
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
223
for
Units
DM
DL
OH
Trans.
In
Beg. WIP
Inventory 1,000 1,000 1,000 1,000 1,000
Started &
completed 48,000 48,000 48,000 48,000 48,000
Ending WIP
Inventory 1,800 1,800
0
720 1,170
Normal
650
650
0
650
650
spoilage
Abnormal
350
0
350
spoilage
350
350
EUP (WA)
51,800 51,800 49,000 50,720 51,170
Total
DM
DL
OH
Trans.
In
Beg. WIP
Inventory
Current
costs
$
7,355
$
0
$
325
$
980
Divided by
EUP
51,800 49,000
Cost per
EUP
$4.72
5
23,76
7
$24,0
92
50,72
0
$0.47
5
50,19
0
$51,1
70
51,17
0
$1.00
Total costs
$
6,050
$3.00
$0.25
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
224
Chapter 6
Cost Assignment:
Transferred out:
Good units (49,000 $231,525
$4.725)
Normal spoilage (650
2,909 $234,434
$4.475)
Ending inventory:
Transferred in (1,800 $ 5,400
$3.00)
Labor (720 $0.475)
342
Overhead (1,170
1,170
6,912
$1.00)
Abnormal spoilage (350
1,566
$4.475)
Total costs accounted
$242,912
for
b. Loss on Abnormal Spoilage
Work in Process InventoryGrinding
1,566
40,000
4,000
4,000
48,000
48,000
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
1,566
Chapter 6
225
(4,000)
44,000
0.05
2,200
Units
Transferred out
Ending
WIP
Inventory
Normal
loss
Abnormal
loss
EUP
(WA)
c.
1,800
4,000
2,000
800
2,200
2,200
2,200
2,200
1,800
1,800
1,800
1,800
44,800
Total
Trans. In
Material Conversion
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
226
Chapter 6
$ 13,930
241,430
$255,360
44,800
$5.70
$110,000
4,500
4,560
$119,060
Chapter 6
227
tions should be addressed: (1) What does the spoilage actually cost? (2)
Why does it occur? (3) How can it be controlled?
(CMA adapted)
Mate- Conversion
rial
5,600
74,400
80,000
5,600
5,600
5,600
64,400
64,400
64,400
7,500
7,500
2,500
2,100
400
2,100
400
2,100
400
80,000
80,000
75,000
Total
Material
Conversion
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
228
Chapter 6
7,632 $ 6,400
$ 1,232
106,168 74,400
$113,800 $80,800
80,000
$1.45
$1.01
31,768
$33,000
75,000
$0.44
Cost Assignment:
Units completed
$101,500
(70,000 $1.45)
Normal spoilage:*
Direct material
$2,121
(2,100 $1.01)
Conversion (2,100
924
3,045 $104,545
$0.44)
Ending inventory:
Direct material
$ 7,575
(7,500 $1.01)
Conversion (2,500
1,100
8,675
$0.44)
Abnormal spoilage:*
Direct material
$
404
(400 $1.01)
Conversion (400
176
580
$0.44)
Total cost accounted
$113,800
for
*Spoilage was found at the end of the production process when units are fully complete; thus, computations could have been made at the full cost of
$1.45 per unit. Had the spoilage been found earlier, the DM and conversion
would not have been at the same stage of production and separate calculations would have been needed.
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
229
Mate- Conversion
rial
5,600
74,400
80,000
5,600
2,800
7,500
2,500
2,100 2,100
630
400
400
120
80,000 74,400 70,450
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
230
Chapter 6
Total
Beginning
WIP Inventory
Current costs
Mate- Conversion
rial
7,632
106,168
$31,768
$74,400
Total cost to
account for
Divided by
EUP
Cost per EUP
$113,800
74,400
$1.45
70,450
$0.45*
$1.00
*Rounded
Cost Assignment:
Transferred out:
Beginning WIP Inven$ 7,632.00
tory cost
Cost to complete
Conversion (2,800
1,260.00
$0.45)
Total cost of BI
$ 8,892.00
Started & completed
93,380.00
(64,400 $1.45)
Normal spoilage:*
Direct material (2,100 $2,100.00
$1.00)
Conversion (630
283.50
2,383.50
$0.45)
Total cost transferred out
$104,655.50
Ending WIP Inventory:
Direct material (7,500 $7,500.00
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 6
231
$1.00)
Conversion (2,500
1,125.00
8,625.00
$0.45)
Abnormal spoilage:
Direct material (400 $ 400.00
$1.00)
Conversion (120
54.00
454.00
$0.45)
Total cost accounted for
$113,734.50
(off due to rounding)
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly
accessible website, in whole or in part.