1

CHAPTER 11
Answers to Multiple Choice Theoretical
1. 2. 3. 4. b d d b 5. 6. 7. 8. C C D D 9. 10. 11. 12. c A A B

Solutions to Multiple Choice Computational

1. (c) Materials: Units transferred out (100%) Units in process, April 30 (100%) EUP Conversion Costs: Units transferred out (100%) Units in process, April: (25,000 x 60%) EUP 2. (b) Equivalent Units of Production: Materials: Units completed and transferred out (100%) Units in process, end (100%) EUP Unit cost Materials: Cost last month (BWIP) Cost this month (current cost) Total Divided by EUP Unit cost 3. (b) Equivalent Units of Production Materials Units completed and transferred out (100%) Units in process, July 31 (100%) EUP Unit cost Materials: Cost last month (BWIP) Cost this month Total Divided by EUP Unit cost Work in process, July 31: (12,000 x P0.51) 44,000 12,000 56,000 P 3,000 25,560 P28,560 56,000 P 0.51 P 6,120 255,000 25,000 280,000 255,000 15,000 270,000

85,000 14,000 99,000 P12,800 69,700 P82,500 99,000 P 0.833

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4. (b) Transferred in costs (4,000 x P50 Conversion costs: (4,000 x 40%) x P30 Cost of work in process, March 31 5. (a) Units completed (100%) Units in process, end: (8,000 x 75%) EUP conversion costs 6. (a) Equivalent units of production: Materials: Units completed and transferred out (100%) Units in process, May 31: (100%) EUP Conversion costs: Units completed and transferred out (100%) Units in process, May 31: (8,000 75%) EUP Unit costs: Transferred in cost: Work in process, May1 (6,000 units) Current cost (14,000 units) Total Divided by Unit cost Cost added: Materials: BWIP Current cost Total EUP Conversion costs: BWIP Current cost Total EUP Total unit costs 20,000 6,000 26,000 P200,000 48,000 P248,000

12,000 8,000 20,000 12,000 6,000 18,000

P12,000 29,000 P41,000 20,000 P 2.05 P2,500 5,500 P8,000 20,000 P1,300 5,000 P6,300 18,000

0.40

0.35 P 2.80

Cost of units completed and transferred out: (12,000 x P2.80) P33,600

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7. (d) Equivalent production for labor: Units transferred out to next department Units in process, end; (1,400 x 30%) EUP Unit cost for labor: BWIP Current cost Total Divided by EUP Unit cost Units transferred out: (7,200 x P12.35) 8. (b) Work in process, end: (420 x P12.35) 9. (a) Equivalent production for materials: Units transferred out (100%) Units in process, end (300 x60%) EUP Material unit cost: BWIP Current cost Total material cost Divided by EUP Unit cost Units transferred out: (6,700 x P10.65) Units in process, end: (180 x P10.65) 10. (a) Direct materials: Units completed (100%) Units in process, May 31: (120x 60%) EUP Conversion costs: Units completed (100%) Units in process, May 31: (120 x 30%) EUP 460 72 532 460 36 496 6,700 180 6,880 P10,000 63,272 P73,272 6,880 P 10.65 P71,335 P 1,917 P 5,187 7,200 420 7,620 P 2,880 91,227 P94,107 7,620 P 12.35 P88,920

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11. (a) Unit costs: Materials: Work in process, May 1 Current cost Total material cost EUP (per #10) Unit cost Conversion costs: Work in process, May 1 Current cost Total conversion costs EUP (per #10) Unit cost Total unit cost Units completed: (460 x P997) Units in process, end: Materials: (72 x P698) Conversion cost: (36 x P299) Total work in process 12. (a) Equivalent Units of Production: Direct materials: Units completed Units in process, July 31: (16,000 x100%) EUP Conversion costs: Units completed Units in process, July 31: (16,000 x 50%) EUP Unit Costs: Materials: Work in process, July 1 Current costs Total material costs EUP Unit material cost Conversion costs: Work in process, July 1 Current costs Total conversion costs EUP Unit conversion cost

P 49,336 322,000 P 371,336 532 P 698 P P P P 9,104 139,200 148,304 496 299 997

P458,620 P 50,256 10,764 P 61,020

34,000 16,000 50,000 34,000 8,000 42,000

P 60,000 280,000 P340,000 50,000 P 6.8 P 70,000 371,000 P441,000 42,000 P 10.5

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13. (a) Units completed: (34,000 x P17.30) Units in process, end: Materials: (16,000 x P6.8) Conversion costs: (8,000 x P10.5) Total work in process 14. (a) Equivalent Units of Production: Materials: Units completed and transferred out Units in process, June 30 EUP Conversion costs: Units completed and transferred out Units in process, June 30: (30 x 50%) EUP Unit Costs: Transferred In: Work in process, June 1 Current costs Total EUP: (40 + 80) Unit cost Direct materials: Work in process, June 1 Current cost Total EUP Unit cost Conversion costs: Work in process, June 1 Current cost Total EUP Unit cost Total unit costs 15. (d) Units completed: (90 x P2,105) Units in ending WIP: Transferred in cost; (30 x P1,060) Costs added: CC (15 x P645) Total work in process P189,450 P 31,800 9,675 P 41,475 P588,200 P108,800 84,000 P192,800

90 0 90 90 15 105

P 40,000 87,200 P127,200 120 P 1,060 P 0 36,000 36,000 90 P 400 P 18,000 49,725 P 67,725 105 P 645 P 2,105

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16. (a) Equivalent Units of Production: Materials: Units completed Work in process, July 31 (100%) EUP Conversion costs: Units completed Work in process, July 31 (70%) EUP Unit Costs: Materials: BWIP Current costs Total material cost EUP Unit material cost Conversion costs: BWIP Current cost Total conversion costs EUP Unit conversion costs Total unit costs 17. (a) Units completed: (90 x P141,500) Units in process, ending: Materials: (10 x P98,000) Conversion costs: (7 x P43,500) Total work in process, ending 18. (a) Department X: Units in process, May 1 Units started in process Total units to account for Units completed Units still in process Department Y: Units in process, May 1 Transferred in from Department X Total units to account for Units completed Units still in process 500 15,000 15,500 (10,500) 5,000 300 8,000 8,300 (7,000) 1,300 P12,735,000 P 980,000 304,500 P 1,284,500

90 10 100 90 7 97

P1,800,000 8,000,000 P9,800,000 100 P 98,000 P 479,500 3,740,000 P4,219,500 97 P 43,500 P 141.500

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19. (a) Equivalent Units of Production: Materials: Transferred out Work in process, June 30 EUP Conversion Costs: Transferred out Work in process, June 30: (40% x 20,000) EUP Units Costs: Materials: BWIP Current cost Total EUP Unit material cost Labor cost: BWIP Current cost Total EUP Unit conversion cost Overhead: (P15 x 70%) Total unit costs 20. (a) Cost of goods manufactured: (50,000 x P45.50) Less: Finished goods inventory, June 30 Cost of goods sold 21. (b) Work in process, June 1 Started in process/transferred in Total units to account for Transferred out Units still process, June 30 22. (b) Units transferred out Ending work in process EUP Materials 131,200 34,200 (100%) 165,500 Conversion Costs 131,200 25,725 (75%) 156,925 Department 1 34,000 117,000 151,000 (132,500) 18,500 Department 2 33,000 132,500 165,500 ( 131,200) 34,300 P2,275,000 72,500 P2,202,500

50,000 20,000 70,000 50,000 8,000 58,000

P 187,500 1,212,500 P1,400,000 70,000 P 20.00 P P P P P 53,750 816,250 870,000 58,000 15.00 10.50 45.50

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23. (d) Beginning work in process Materials added Conversion costs added Total cost of units placed in process Less: Ending work in process Cost of units transferred out to finished goods 24. (d) Equivalent Units of Production: Materials: Transferred out Ending work in process: (10,000 8,000) 100% EUP Conversion costs: Transferred out Ending work in process: (2,000 x 70%) EUP Unit costs: Materials: (P15,000 / 10,000) Conversion costs: (P24,440 / 9,400) Total unit costs Costs of units transferred out to next dept.: (8,000 x P4.10) 25. (d) Materials: (2,000 x P1.50) Conversion costs: (1,400 x P2.60) Total work in process 26. (a) Equivalent Units of Production Transferred out Ending work in process EUP Unit Costs Beginning work in process Current costs Total costs EUP Unit costs Transferred Out: Materials: (85,000 x P1.31) Conversion costs: (85,000 x P0.75) 27. (d) (10,000 + 80,000) Materials CC 85,000 85,000 5,000 (100%) 3,000 (60%) 90,000 88,000 Materials P 30,000 88,000 P118,000 90,000 P 1.31 CC P 16,000 50,000 P 66,000 88,000 P 0.75 P111,350 63,750 P3,000 3,640 P6,640 P23,000 29,000 36,000 88,000 19,000 P69,000

8,000 2,000 10,000 8,000 1,400 9,400 P1.50 2.60 P4.10 P32,800

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28. (c) Equivalent Units of Production Completed production Ending work in process 1 EUP Unit Costs Beginning work in process Current costs Total costs EUP Unit costs 29. (d) Ending work in process: Materials: (43,200 x P2.3) Conversion costs: (19,200 x P3.0) Total costs of EWIP 30. (c) Equivalent Units of Production Completed and transferred out Ending work in process EUP Unit Costs Beginning work in process Current costs Total costs EUP Unit costs 31. (d) Materials: (21,600 x P4.60) Conversion costs: (9,600) x P6.00) Cost of ending work in process 32. (a) Beginning work in process Costs transferred in this month Total costs transferred in EUP: (8,900 + 30,100) Transferred in unit cost P 2,047 8,483 P10,530 39,000 P 0.27 P 99,360 57,600 P156,960 Materials 92,000 21,600 (90%) 113,600 Materials P 54,560 468,000 P522,560 113,600 P 4.60 CC 92,000 9,600 (40%) 101,600 CC P 35,560 574,040 P 609,600 101,600 P 6.00 P 99,360 57,600 P156,960 Materials 184,000 43,200 (90%) 227,200 Materials P 54,560 468,000 P522,560 227,200 P 2.3 CC 184,000 9,200 (40%) 203,200 CC P 35,560 574,040 P609,600 203,200 P 3.00

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33. (a) Equivalent Units of Production: Materials: Units transferred out Ending work in process (100%) EUP Unit material cost: BWIP Current costs Total material cost EUP Unit material cost 34. (b) Equivalent Units of Production: Direct labor: Units transferred out Ending work in process (10,000 x 75%) EUP Direct labor unit cost: BWIP Current costs Total conversion costs EUP Direct labor unit cost 35. (a) BWIP Current costs, November Total overhead costs EUP (same as labor) Overhead unit cost P 534.00 2,021.00 P2,555.00 36,000 P 0.07

29,000 10,000 39,000 P 267 1,683 P 2,950 39,000 P 0.05

29,000 7,500 36,500 P1,495.20 7,994.80 P9,490.00 36,000 P 0.26

11 Solutions to Problems Problem 11-1

1. Equivalent Units of Production: Materials: Units transferred out Units in process, end: (100%) EUP Conversion costs: Units transferred out Units in process, end: (12,000 x 2/3) EUP 2. Refining Department Cost of Production Report Month of January, 2010 Quantity Schedule Beginning work in process Started in process Units to account for Transferred out Ending work in process (100%) Total units accounted for Cost Schedule Materials: BWIP Current cost Total Conversion costs: BWIP Current cost Total costs Total costs to account for Transferred out Ending work in process: Materials Conversion costs Total EWIP Total costs accounted for Units 10,000 75,000 85.000 73,000 12,000 85,000 Total Cost P 64,000 616,000 680,000 EUP Unit Cost 73,000 12,000 85,000 73,000 8,000 81,000

85,000

P 8.00

39,900 400,720 440,620 1,120,620 981,120 96,000 43,520 139,500 P1,120,620

= = =

81,000 73,000 12,000 8,000

= x x x

5.44 P13.44 P13.44 8.00 5.44

12 Problem 11-2
1. Equivalent Units of Production Materials: Transferred out to next department Ending work in process (100%) EUP Labor: Transferred out to next department Ending work in process (500 x 25%) EUP Overhead: Transferred out to next department Ending wok in process (500 x 40$) EUP Processing Department Cost of Production Report Month of April
Quantity Schedule Beginning work in process Transferred in Total to account for Transferred out to finished goods Ending work in process Total accounted for Cost Schedule Cost from prior department: BWIP Last month Transferred in This month Total transferred in costs Cost in this department: Materials: BWIP Current month Total materials Labor: BWIP Current month Total labor cost Overhead: BWIP Current month Total overhead cost Total costs to account for Transferred out Ending work in process: Cost from prior department Costs this department: Materials Labor Overhead Total EWIP Total costs accounted for *adjusted P1.00 for rounding Units 1,000 6,000 7,000 6,500 500 7,000 Total Cost P 120,000 732,000 852,000 24,000 90,000 114,000 25,060 107,440 132,500 6,320 86,940 93,260 P 1,191,760 P 1,117,476* 60,857 8,143 2,500 2,784 74,284 P 1,191,760 = = EUP 1,000 6,000 7,000 Unit Cost

6,500 500 7,000 6,500 125 6,625 6,500 200 6,700

2.

P121.714

7,000

16.286

6,625

20.00

= = = = =

6,700 6,500 500 500 125 200

13.919 P171.919

x P171.919 x x x x 121.714 16.286 20.0 13.919

13 Problem 11-3
Ace Department First Department Equivalent Units of Production Month of June, 2010 Materials: Transferred out to next department Ending work in process (100%) EUP Conversion costs: Transferred out to next department Ending work in process, (8,000 units x 70%) EUP 106,000 8,000 114,000 106,000 5,600 111,600

Ace Company First Department Cost of Production Report Month of June 2010 Quantity Schedule Beginning work in process Started in process Total to account for Transferred out to next department Ending work in process Total accounted for Cost Schedule Materials: BWIP Current month Total materials Conversion Cost:
BWIP Current month Total CC Total costs to account for Transferred out to next department Ending work in process: Materials CC Total EWIP Total costs accounted for

Units 10,000 104,000 114,000 106,000 8,000 114,000 Total Cost P 80,000 832,000 912,000 EUP Unit Cost

114,000

P 8.00

54,000 491,724 545,724 P1,457,724 P1,366,339* 64,000 27,384 91,385 P1,457,724

111,600 = 106,000 = = 8,000 5,600

= x x x

4.89 P12.89 P12.89 8.00 4.89

14 Problem 11-4
1. Tan Corporation Shaping Department Equivalent Units of Production Month of October 2010 Materials: Units transferred out to finished goods Units in ending work in process: (2,000 x 75%) EUP Conversion costs: Units transferred out to finished goods Units in ending work in process: (2,000 x 50%) EUP 2. Tan Corporation Shaping Department Cost of Production Report Month of October 2010
Quantity Schedule Beginning work in process Transferred in from prior department Units to account for Transferred out Ending work in process Total accounted for Cost Schedule Cost from prior department: BWIP Current month Total transferred in cost Cost added this department: Materials: BWIP This month Total material cost CC: BWIP This month Total CC Total costs to account for Transferred out Ending work in process: Cost from prior department Cost added this department: Materials CC Total work in process Total costs accounted for 3. Units 3,000 7,500 10,500 8,500 2,000 10,500 Total Cost P 62,000 253,000 315,000 31,200 82,800 114,000 52,700 226,600 279,300 P708,300 P601,800 60,000 17,100 29,400 106,500 P708,300 = = EUP 3,000 7,500 10,500 Unit Cost

8,500 1,500 10,000 8,500 1,000 9,500

P30.00

= = = =

10,000 9,500 8,500 2,000 1,500 1,000

= = x x x x

11.40 29.40 P70.80 P70.80 30.00 11.40 29.40

Work in process Finishing Department 601,800 Work in process Shaping Department To record cost of units transferred to Finishing Department.

601,800

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Problem 11-5
1. Assembling Department Computation of Equivalent Units of Production Month of June 2010 Materials: Completed and transferred out Ending work in process: (4,000 x 90%) EUP Labor: Completed and transferred out Ending work in process: (4,000 x 70%) EUP Overhead: Completed and transferred out Ending work in process: (4,000 x 35%) EUP 2. Assembling Department Cost of Production Report Month of June 2010 Quantity Schedule Beginning work in process Transferred in from prior department Total units to account for Completed and transferred out Ending work in process Total units accounted for Cost Schedule Cost from prior department: BWIP Cost this month Total transferred in cost Cost added this department: Materials: BWIP This month Total material cost Labor: BWIP This month Total labor cost Overhead: BWIP This month Total overhead cost Total costs to account for Completed and transferred out Ending work in process: Cost from preceding department Cost added this department: Materials Labor Overhead Total ending work in process Total costs accounted for Units 2,000 10,000 12,000 8,000 4,000 12,000 Total cost P 32,000 160,000 192,000 20,000 96,000 116,000 7,200 36,000 43.200 5,500 18,000 23,500 P374,700 P260,000 64,000 36,000 11,200 3,500 114,700 P374,700 = = EUP 2,000 10,000 12,000 Unit Cost 8,000 3,600 11,600 8,000 2,800 10,800 8,000 1,400 9,400

P16.00

= = = = =

11,600 10,800 9,400 8,000 4,000 3,600 2,800 1,400

= = = x x x x x

10.00 4.00 2.50 P32.50 P32.50 16,00 10.00 4.00 2.50

16 Problem 11-6
1.
Mixing Department Equivalent Units of Production Month of May 2010 Direct materials: Transferred out to Bottling Department Ending work in process EUP Conversion costs: Transferred out to bottling Department Ending work in process (60% x 9,000) EUP 2. Mixing Department Cost of Production Report Month of May 2010 Quantity Schedule Beginning work in process Started in process Total to account for Transferred out Ending work in process Total accounted for Cost Schedule Direct materials: BWIP This month Total material cost Conversion costs: BWIP This month Total conversion costs Total costs to account for Transferred out to next department Ending work in process: Direct materials Conversion costs Total ending work in process Total costs accounted for Units 8,000 76,000 84,000 75,000 9,000 84,000 Total Cost P 1,680 18,480 20,160 4,020 32,160 36,180 P56,340 P51,750 2,160 2,430 4,590 P56,340 EUP Unit Cost 75,000 9,000 84,000 75,000 5,400 80,400

84,000

P0.24

80,000

= x x x

0.45 P0.69 P0.69 0.24 0.45

= 75,000 = = 9,000 5,400

3.

Work in process Bottling Department Work in process Mixing Department To record cost units finished transferred out.

51,750 51,750

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Problem 11-6 (continued): 4. Bottling Department Equivalent Units of Production Month of May 2010 Direct materials: Transferred out to finished goods Ending work in process EUP Conversion costs; Transferred out to finished goods Ending work in process (8,000 x 100%) EUP Bottling Department Cost of Production Report Month of May 2010 Quantity Schedule Beginning work in process Transferred in from prior department Total to account for Transferred out finished goods Ending work in process Total accounted for Cost Schedule Cost from prior department BWIP This month Total transferred in costs Cost added this department: Conversion costs: BWIP This month Total conversion cost Total costs to account for Transferred out to finished goods Ending work in process: Cost from prior department Cost added this department: Conversion costs Total ending work in process Total costs accounted for Units 8,000 75,000 83,000 68,000 15,000 83,000 Total Cost P 6,350 51,750 58,100 2,220 25,900 28,120 P86,220 P72,760 10,500 2,960 13,460 P86,220 = = EUP 8,000 75,000 83,000 Unit Cost 68,000 - 0 68,000 68,000 8,000 76,000

P0.70

= = =

76,000 68,000 15,000 8,000

= x x x

0.37 P1.07 P1.07 0.70 0.37

5.

Finished goods inventory Work in process Bottling Department To record cost of finished goods.

72,760 72,760

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Problem 11-7
1. Equivalent Units of Production Dept. 1 Materials: Transferred out Ending work in process (100%) EUP Conversion costs: Transferred out Ending work in process (75%; 50%) EUP 45,000 10,000 55,000 45,000 7,500 52,500 Dept. 2 43,000 9,000 52,000 43,000 4,500 47,500

2.

Department 1 Cost of Production Report Month of April 2010 Quantity Schedule Beginning work in process Started in process Total to account for Transferred out to next department Ending work in process Total accounted for Cost Schedule Materials: BWIP This month Total material cost Conversion costs: BWIP This month Total conversion costs Total costs to account for Transferred out to next department Ending work in process: Materials Conversion costs Total ending work in process Total costs to account for Units 5,000 50,000 55,000 45,000 10,000 55,000 Total Costs P 12,000 65,000 77,000 18,800 145,000 163,800 P240,800 P203,400 14,000 23,400 37,400 P240,800 EUP Unit Costs

55,000

P 1.40

= = =

52,500 = 45,000 x 10,000 x 7,500 x

3.12 P 4.52 P 4.52 1.40 3.12

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Problem 11-7 (continued) Department 2 Cost of Production Report Month of April 2010 Quantity Schedule Beginning work in process Transferred in from prior department Total to account for Transferred out to finished goods Ending work in process Total accounted for Cost Schedule Cost from preceding department: BWIP This month Total transferred in costs Cost added this department: Materials: BWIP This month Total material cost CC : BWIP This month Total CC Total costs to account for Transferred out to finished goods Ending work in process: Cost from prior department Cost added this department: Materials Conversion costs Total work in process Total costs accounted for Units 7,000 45,000 52,000 43,000 9,000 52,000 Total Cost P 28,000 203,400 231,400 14,800 45,000 59,800 20,625 110,000 130,625 P421,825 P359,050 40,050 10,350 12,375 62,775 P421,825 = = EUP 7,000 45,000 52,000 = Unit Cost

P 4.45

= = = =

52,000 47,500 43,000 9,000

= = x x

1.15 2.75 P 8.35 P 8.35 4.45 1.15 2.75

9,000 x 4,500 x

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Problem 11-8
1. Equivalent Units of Production Materials: Transferred out Ending work in process: 100%; 85% EUP Conversion costs; Transferred out Ending work in process: 25%; 85% EUP 2. Orange Company Cost of Production Report Month of March 2010 Blending Department
Quantity Schedule Beginning work in process Started in process/transferred in Total to account for Transferred out Ending work in process Total accounted for Cost Schedule Transferred in from prior department: BWIP This month Total transferred in costs Cost added this department: Materials: BWIP This month Total material costs C. Costs: BWIP This month Total conversion costs Total costs to account for Transferred out Ending work in process: Transferred in from prior department Cost added this department: Materials Conversion costs Total work in process Total costs accounted for Total Costs P Units 200 2,300 2,500 2,180 320 2,500 Unit costs P Total Costs P 15,188 339,971 355,159 1,641 42,000 43,641 1,840 73,200 75,040 P473,840 417,603* 43,616 4,641 7.980 56,237 P473,840

Blending Department 2,180 320 2,500 2,180 80 2,260

Finishing Department 2,000 238 2,238 2,000 238 2,238

Finishing Department
Units 100 2,180 2,280 2,000 280 2,280 Unit Costs

P155.77

8,000 100,000 108,000 47,215 207,600 254,815 P362,815 P339,971 13,824 9,020 22,844 P362,815

43.20

19.50

112.75 P155.95 P155.95 43.20 112.75

33.53 P208.80 P208.80 155.77 19.50 33.53

21
*P3 difference due to rounding

Problem 11-9
a. Striping Department: Beginning work in process inventory Current costs: DM DL Overhead (P80,000 x 80%) Total Less ending work in process inventory Costs transferred to Adhesion b. Adhesion Department: Let CC = conversion costs BWIP + TI + DM + CC - To = EWIP P70,000 + P237,000 + P22,600 + CC - P480,000 = P20,600 CC - P150,000 = P20,600 CC = P171,000 DL + OH = CC DL + .80DL = CC 1.80DL = P171,000 DL = P95,000 OH = P95,000 x .80 = P76,000 c. Cost of goods manufactured is equal to the cost of goods transferred to finished goods (P880,000). OH = .80 DL P90,000 = .80 DL DL = P112,500 BWIP + TI + DM + DL + OH - CGM = P40,000 P150,000 + P480,000 + DM + P112,500 + P90,000 - P880,000 = P40,000 DM - P47,500 = P40,000 DM = P87,500 d. Work in process inventory Adhesion Work in process inventory Striping Work in process inventory Packaging Work in process inventory Adhesion Finished goods inventory Work in process inventory Packaging Cost of goods sold 237,000 237,000 480,000 480,000 880,000 880,000 720,000 P 20,000 90,000 80,000 64,000 P254,000 17,000 P237,000

22
Finished goods inventory 720,000