Acct 303 Chapter 17

CHAPTER 17
PROCESS COSTING
17-16 (25 min.) Equivalent units, zero beginning inventory.
1.
Direct materials cost per unit ($750,000 10,000)

Conversion cost per unit ($798,000 10,000)
Assembly Department cost per unit
$ 75.00
79.80
$154.80
2a. Solution Exhibit 17-16A calculates the equivalent units of direct materials and conversion
costs in the Assembly Department of Nihon, Inc. in February 2009.
Solution Exhibit 17-16B computes equivalent unit costs.
2b.
Direct materials cost per unit

Conversion cost per unit
Assembly Department cost per unit
$ 75
84
$159
3.
The difference in the Assembly Department cost per unit calculated in requirements 1 and 2
arises because the costs incurred in January and February are the same but fewer equivalent units
of work are done in February relative to January. In January, all 10,000 units introduced are fully
completed resulting in 10,000 equivalent units of work done with respect to direct materials and
conversion costs. In February, of the 10,000 units introduced, 10,000 equivalent units of work is
done with respect to direct materials but only 9,500 equivalent units of work is done with respect
to conversion costs. The Assembly Department cost per unit is, therefore, higher.
SOLUTION EXHIBIT 17-16A
Steps 1 and 2: Summarize Output in Physical Units and Compute Output in Equivalent Units;
Assembly Department of Nihon, Inc. for February 2009.
Flow of Production
Work in process, beginning (given)
Started during current period (given)
To account for
Completed and transferred out
during current period
Work in process, ending* (given)
1,000 100%; 1,000 50%
Accounted for
Work done in current period
(Step 1)
Physical
Units
0
10,000
10,000
9,000
1,000
(Step 2)
Equivalent Units
Direct
Conversion
Materials
Costs
9,000
9,000
1,000
500
10,000
9,500
10,000
*Degree of completion in this department: direct materials, 100%; conversion costs, 50%.
17-1
SOLUTION EXHIBIT 17-16B

Compute Cost per Equivalent Unit,
Assembly Department of Nihon, Inc. for February 2009.
(Step 3) Costs added during February

Divide by equivalent units of work done
in current period (Solution Exhibit 17-l6A)
Cost per equivalent unit
Total
Production
Costs
$1,548,000
Direct
Materials
$750,000
10,000
$
75
Conversion
Costs
$798,000
9,500
84
17-17 (20 min.) Journal entries (continuation of 17-16).

1.
2.
3.
Work in ProcessAssembly
Accounts Payable
To record $750,000 of direct materials
purchased and used in production during
February 2009
Various accounts
To record $798,000 of conversion costs
for February 2009; examples include energy,
manufacturing supplies, all manufacturing
labor, and plant depreciation
Work in ProcessTesting
To record 9,000 units completed and
transferred from Assembly to Testing
during February 2009 at
$159 9,000 units = $1,431,000
750,000
750,000
798,000
798,000
1,431,000
1,431,000
Postings to the Work in ProcessAssembly account follow.

Work in Process Assembly Department
Beginning inventory, Feb. 1
0
3. Transferred out to
1. Direct materials
750,000
2. Conversion costs
798,000
Ending inventory, Feb. 28
117,000
17-2
1,431,000
17-18 (25 min.) Zero beginning inventory, materials introduced in middle of process.
1.
Solution Exhibit 17-18A shows equivalent units of work done in the current period of
Chemical P, 50,000; Chemical Q, 35,000; Conversion costs, 45,000.
2.
Solution Exhibit 17-18B summarizes the total Mixing Department costs for July 2009,
calculates cost per equivalent unit of work done in the current period for Chemical P, Chemical
Q, and Conversion costs, and assigns these costs to units completed (and transferred out) and to
units in ending work in process.
Mixing Department of Roary Chemicals for July 2009.
(Step 1)
Flow of Production
To account for
15,000 100%; 15,000 0%;
15,000 66 2/3%
Accounted for
Work done in current period only
Physical
Units
0
50,000
50,000
35,000
15,000
(Step 2)
Equivalent Units
Chemical P
Chemical Q
Conversion
Costs
35,000
35,000
35,000
15,000
10,000
50,000
35,000
45,000
50,000
*Degree of completion in this department: Chemical P, 100%; Chemical Q, 0%; conversion costs, 66 2/3%.
17-3

Steps 3, 4, and 5: Summarize Total Costs to Account For, Compute Cost per Equivalent Unit, and
Assign Total Costs to Units Completed and to Units in Ending Work in Process;
Mixing Department of Roary Chemicals for July 2009.
Total
Production
Costs
Chemical P
$455,000
$455,000
(Step 3) Costs added during July

Total costs to account for
(Step 4) Costs added in current period
Divide by equivalent units of work
done in current period
(Solution Exhibit 17-l8A)
Cost per equivalent unit
(Step 5) Assignment of costs:

(35,000 units)
Work in process, ending
(15,000 units)
Total costs accounted for
Chemical Q
Conversion
Costs
$250,000
$250,000
$70,000
$70,000
$135,000
$135,000
$250,000
$70,000
$135,000
50,000
5
35,000
2
45,000
$
3
$350,000
(35,000* $5) + (35,000* $2) + (35,000* $3)
105,000
$455,000
(15,000 $5) +
$250,000 +
(0 $2)
$70,000
+ (10,000 $3)
+
$135,000
*Equivalent units completed and transferred out from Solution Exhibit 17-18A, Step 2.
Equivalent units in ending work in process from Solution Exhibit 17-18A, Step 2.
17-19 (15 min.) Weighted-average method, equivalent units.

Under the weighted-average method, equivalent units are calculated as the equivalent units of
work done to date. Solution Exhibit 17-19 shows equivalent units of work done to date for the
Assembly Division of Fenton Watches, Inc., for direct materials and conversion costs.
SOLUTION EXHIBIT 17-19
Weighted-Average Method of Process Costing, Assembly Division of Fenton Watches, Inc., for
May 2009.
(Step 2)
(Step 1)
Equivalent Units
Physical
Direct Conversion
Flow of Production
Units
Materials
Costs
Work in process beginning (given)
80
500
To account for
580
Completed and transferred out during current period
460
460
460
Work in process, ending* (120 60%; 120 30%)
120
72
36
Accounted for
580
___
___
Work done to date
532
496
17-4
17-20 (20 min.) Weighted-average method, assigning costs (continuation of 17-19).

Solution Exhibit 17-20 summarizes total costs to account for, calculates cost per equivalent unit
of work done to date in the Assembly Division of Fenton Watches, Inc., and assigns costs to units
completed and to units in ending work-in-process inventory.
Weighted-Average Method of Process Costing, Assembly Division of Fenton Watches, Inc., for
May 2009.
Total
Production
Costs
$ 584,400
4,612,000
$5,196,400
(Step 3)

Costs added in current period (given)
(Step 4)
Costs incurred to date

Divide by equivalent units of work done to date
(Solution Exhibit 17-19)
Cost per equivalent unit of work done to date
(Step 5)
Assignment of costs:
Completed and transferred out (460 units)
Work in process, ending (120 units)
$4,586,200
610,200
$5,196,400
Direct
Materials
$ 493,360
3,220,000
$3,713,360
Conversion
Costs
$ 91,040
1,392,000
$1,483,040
$3,713,360
$1,483,040
496
2,990
(460* $6,980) + (460* $2,990)

(72 $6,980) + (36 $2,990)
$3,713,360 +
$1,483,040
Equivalent units completed and transferred out from Solution Exhibit 17-19, Step 2.
Equivalent units in work in process, ending from Solution Exhibit 17-19, Step 2.
17-5
532
6,980
17-21 (15 min.) FIFO method, equivalent units.

Under the FIFO method, equivalent units are calculated as the equivalent units of work done in
the current period only. Solution Exhibit 17-21 shows equivalent units of work done in May
2009 in the Assembly Division of Fenton Watches, Inc., for direct materials and conversion
costs.
FIFO Method of Process Costing, Assembly Division of Fenton Watches, Inc., for May 2009.
Flow of Production
To account for
Completed and transferred out during current
period:
From beginning work in process
80 (100% 90%); 80 (100% 40%)
Started and completed
380 100%, 380 100%
120 60%; 120 30%
Accounted for
(Step 1)
Physical
Units
80
500
580
(Step 2)
Equivalent Units
Direct
Conversion
Materials
Costs
(work done before current period)
80
8
48
380
380
72
36
460
464
380
120
___
580
Degree of completion in this department: direct materials, 90%; conversion costs, 40%.
460 physical units completed and transferred out minus 80 physical units completed and transferred out from
beginning work-in-process inventory.
17-6
17-22 (20 min.) FIFO method, assigning costs (continuation of 17-21).

Solution Exhibit 17-22 summarizes total costs to account for, calculates cost per equivalent unit
of work done in May 2009 in the Assembly Division of Fenton Watches, Inc., and assigns total
costs to units completed and to units in ending work-in-process inventory.
FIFO Method of Process Costing, Assembly Division of Fenton Watches, Inc., for May 2009.
(Step 3) Work in process, beginning (given)

Total
Production
Costs
$ 584,400
4,612,000
$5,196,400

Divide by equivalent units of work done in
current period (Solution Exhibit 17-21)
Cost per equiv. unit of work done in current period
Completed and transferred out (460 units):
Work in process, beginning (80 units)
Costs added to beginning work in process
in current period
Total from beginning inventory
Started and completed (380 units)
Total costs of units completed and
transferred out
*
$ 584,400
Direct
Materials
$ 493,360
3,220,000
$3,713,36
0
Conversion
Costs
$ 91,040
1,392,000
$1,483,040
$3,220,000
460
$1,392,000
464
7,000
$493,360
17-7
$91,040
(8* $7,000) + (48* $3,000)
200,000
784,400
3,800,000
(380 $7,000) + (380 $3,000)
4,584,400
612,000
$5,196,400
(72# $7,000) + (36# $3,000)

$3,713,360 +
$1,483,040
Equivalent units used to complete beginning work in process from Solution Exhibit 17-21, Step 2.
Equivalent units started and completed from Solution Exhibit 17-21, Step 2.
#
Equivalent units in work in process, ending from Solution Exhibit 17-21, Step 2.
3,000
17-23 (20-25 min.) Standard-costing method, assigning costs.

1.
Standard Costing Method of Process Costing for Buckys Boxes for July 2010
(Step 1)
Physical
Units
Flow of Production

To account for
Completed and transferred out during current period:
185,000 (100% 100%); 185,000 (100% 25%)
327,000 100%, 327,000 100%
138,000 100%; 138,000 80%
Accounted for
185,000
465,000
650,000
(Step 2)
Equivalent Units
Direct
Conversion
Materials
Costs
185,000
0
138,750
327,000
327,000
138,000
_______
465,000
110,400
_______
576,150
327,000
138,000
_______
650,000
512,000 physical units completed and transferred out minus 185,000 physical units completed and transferred out
from beginning work-in-process inventory.
17-8
2.
Steps 3, 4, and 5: Summarize Total Costs to Account For, Compute Cost per Equivalent Unit,
and Assign Total Costs to Units Completed and to Units in Ending Work in Process;
Standard Costing Method of Process Costing for Buckys Boxes for July 2010

Costs added in current period at standard costs
Total
Production
Direct
Conversion
Costs
Materials
Costs
$ 337,625
$240,500
+
$ 97,125
1,814,415
(465,000 $1.30) + (576,150 $2.10)
$2,152,040
$845,000
+
$1,307,040
(Step 4) Standard cost per equivalent unit (given)
(Step 5) Assignment of costs at standard costs:

Completed and transferred out (512,000 units):
Work in process, beginning (185,000 units)
$ 337,625
Costs added to beg. work in process in current period
291,375
629,000
Started and completed (327,000 units)
1,111,800
Total costs of units transferred out
1,740,800
Work in process, ending (138,000 units)
411,240
$2,152,040
Summary of variances for current performance:
Costs added in current period at standard costs (see Step 3 above)
Actual costs incurred (given)
Variance
1.30
17-9
2.10
$240,500
+
$97,125
(0* $1.30) + (138,750* $2.10)
(327,000 $1.30) + (327,000 $2.10)
(138,000# $1.30) + (110,400# $2.10)
$845,000
+
$1,307,040
$604,500
$1,209,915
607,500
1,207,415
$ 3,000 U
$
2,500 F
*Equivalent units to complete beginning work in process from Solution Exhibit 17-23A, Step 2.
Equivalent units started and completed from Solution Exhibit 17-23A, Step 2.
#
17-24 (25 min.) Weighted-average method, assigning costs.

1. & 2.
Solution Exhibit 17-24A shows equivalent units of work done to date for Bio Doc Corporation
for direct materials and conversion costs.
Solution Exhibit 17-24B summarizes total costs to account for, calculates the cost per equivalent
unit of work done to date for direct materials and conversion costs, and assigns these costs to
units completed and transferred out and to units in ending work-in-process inventory.
Weighted-Average Method of Process Costing, Bio Doc Corporation for July 2008.
Flow of Production
To account for
20,000 100%; 20,000 50%
Accounted for
Work done to date
(Step 1)
Physical
Units
12,500
50,000
62,500
42,500
20,000
(Step 2)
Equivalent Units
Direct
Conversion
Materials
Costs
42,500
42,500
20,000
10,000
62,500
52,500
62,500
*Degree of completion: direct materials, 100%; conversion costs, 50%.
17-10

Weighted-Average Method of Process Costing, Bio Doc Corporation for July 2008.
Total
Production
Costs
$162,500
813 ,750
$976,250
(Step 3)

(Step 4)

Divide by equivalent units of work done to
date (Solution Exhibit 17-24A)
(Step 5)
Completed and transferred out (42,500 units)
*Equivalent units completed and transferred out (given).
Equivalent units in ending work in process (given).
17-11
$735,250
241,000
$976,250
Direct
Materials
$ 75,000
350,000
$425,000
Conversion
Costs
$ 87,500
463,750
$551,250
$425,000
$551,250
62,500
$ 6.80
52,500
$ 10.50
(42,500* $6.80) + (42,500* $10.50)

(20,000 $6.80) + (10,000 $10.50)
$425,000
+
$551,250
17-25 (30 min.) FIFO method, assigning costs.

1. & 2. Solution Exhibit 17-25A calculates the equivalent units of work done in the current
period. Solution Exhibit 17-25B summarizes total costs to account for, calculates the cost per
equivalent unit of work done in the current period for direct materials and conversion costs, and
assigns these costs to units completed and transferred out and to units in ending work-in-process
inventory.
FIFO Method of Process Costing, Bio Doc Corporation for July 2008.
(Step 1)
Physical
Units
Flow of Production

To account for
12,500 (100% 100%); 12,500 (100% 70%)
30,000 100%, 30,000 100%
20,000 100%; 20,000 50%
Accounted for
12,500
50,000
62,500
(Step 2)
Equivalent Units
Direct
Conversion
Materials
Costs
12,500
0
3,750
30,000
30,000
20,000
10,000
50,000
43,750
30,000
20,000
62,500
17-12

Steps 3, 4, and 5: Summarize Total Costs to Account For, Compute Cost per Equivalent Unit, and Assign Total Costs to Units
Completed and to Units in Ending Work in Process;
FIFO Method of Process Costing, Bio Doc Corporation for July 2008.

current period (Solution Exhibit 17-25A)
Cost per equivalent unit of work done in current period
Cost added to beginning work in process in current period
Total costs of units completed and transferred out
Total
Production
Costs
$162,500
813,750
$976,250
$162,500
39,750
202,250
528,000
730,250
246,000
$976,250
*Equivalent units used to complete beginning work in process from Solution Exhibit 17-25A, Step 2.
#
Direct
Materials
$ 75,000
350,000
$425,000
$350,000
Conversion
Costs
$ 87,500
463,750
$551,250
$463,750
50,000
43,750
10.60
$75,000
+
$87,500
*
(0 $7) + (3,750* $10.60)
(30,000 $7) + (30,000 $10.60)
(20,000# $7) + (10,000# $10.60)
$425,000
+ $551,250
17-26 (30 min.) Standard-costing method, assigning costs.

1.
The calculations of equivalent units for direct materials and conversion costs are identical
to the calculations of equivalent units under the FIFO method. Solution Exhibit 17-25A shows
the equivalent unit calculations for standard costing and computes the equivalent units of work
done in July 2008. Solution Exhibit 17-26 uses the standard costs (direct materials, $6.60;
conversion costs, $10.40) to summarize total costs to account for, and to assign these costs to
units completed and transferred out and to units in ending work-in-process inventory.
2.
Solution Exhibit 17-26 shows the direct materials and conversion costs variances for
Direct materials
Conversion costs
$20,000 U
$8,750 U

Steps 3, 4, and 5: Summarize Total Costs to Account For, Compute Cost per Equivalent Unit,
and Assign Total Costs to Units Completed and to Units in Ending Work in Process;
Standard Costing Method of Process Costing, Bio Doc Corporation for July 2008.

Variance
Total
Production
Direct
Conversion
Costs
Materials
Costs
$173,500
(12,500 $6.60) + (8,750 $10.40)
785,000
(50,000 $6.60) + (43,750 $10.40)
$958,500
$412,500
+
$546,000
$ 6.60
$173,500
39,000
212,500
510,000
722,500
236,000
$958,500
(12,500 $6.60) + (8,750 $10.40)

(0* $6.60) + (3,750* $10.40)
(30,000 $6.60) + (30,000 $10.40)
(20,000# $6.60) + (10,000# $10.40)
$412,500
+
$546,000
$330,000
350,000
$ 20,000 U
#
17-14
$ 10.40
$455,000
463,750
$ 8,750 U
17-27 (3540 min.) Transferred-in costs, weighted-average method.

1, 2. & 3. Solution Exhibit 17-27A calculates the equivalent units of work done to date.
unit of work done to date for transferred-in costs, direct materials, and conversion costs, and
assigns these costs to units completed and transferred out and to units in ending work-in-process
inventory.
Steps 1 and 2: Summarize Output in Physical Units and Compute Output in Equivalent Units
Weighted-Average Method of Process Costing;
Finishing Department of Asaya Clothing for June 2009.
(Step 1)
Physical
Units
Flow of Production

Transferred in during current period (given)
To account for
60 100%; 60 0%; 60 75%
Accounted for
Work done to date
(Step 2)
Equivalent Units
TransferredDirect
Conversion
in Costs
Materials
Costs
75
135
210
150
60
150
150
150
60
45
210
150
195
210
*Degree of completion in this department: transferred-in costs, 100%; direct materials, 0%; conversion costs, 75%.
17-15

Weighted-Average Method of Process Costing,
(Step 3)

(Step 4)

(Solution Exhibit 17-27A)
(Step 5)
a
b
Work in process, ending (60 units):
Total
Production
Costs
$105,000
258,000
$363,000
$275,934
87,066
$363,000
Equivalent units completed and transferred out from Sol. Exhibit 17-27, step 2.
Equivalent units in ending work in process from Sol. Exhibit 17-27A, step 2.
17-16
Transferred-in
Costs
$ 75,000
142,500
$ 217,500
Direct
Materials
$
0
37,500
$37,500
Conversion
Costs
$ 30,000
78,000
$108,000
$ 217,500
$37,500
$108,000
210
$1,035.71
195
$ 553.85
150
250
(150 a $1,035.71) + (150 a $250) + (150a $553.85)

(60b $1,035.71) + (0b $250) + (45b $553.85)
$ 217,500
$37,500
$108,000
17-28 (3540 min.) Transferred-in costs, FIFO method.

Solution Exhibit 17-28A calculates the equivalent units of work done in the current period (for
transferred-in costs, direct-materials, and conversion costs) to complete beginning work-inprocess inventory, to start and complete new units, and to produce ending work in process.
unit of work done in the current period for transferred-in costs, direct materials, and conversion
costs, and assigns these costs to units completed and transferred out and to units in ending workin-process inventory.
Steps 1 and 2: Summarize Output in Physical Units and Compute Output in Equivalent Units
FIFO Method of Process Costing;
(Step 1)
Flow of Production
Transferred-in during current period (given)
To account for
From beginning work in processa
[75 (100% 100%); 75 (100% 0%); 75 (100% 60%)]
(75 100%; 75 100%; 75 100%)
Work in process, endingc (given)
(60 100%; 60 0%; 60 75%)
Accounted for
(Step 2)
Equivalent Units
Physical Transferred-in
Direct
Conversion
Units
Costs
Materials
Costs
75
135
210
75
0
75
30
75
75
75
60
___
135
0
___
150
45
___
150
75b
60
___
210
Degree of completion in this department: Transferred-in costs, 100%; direct materials, 0%; conversion costs, 60%.
150 physical units completed and transferred out minus 75 physical units completed and transferred out from beginning
work-in-process inventory.
Degree of completion in this department: transferred-in costs, 100%; direct materials, 0%; conversion costs, 75%.
17-17

FIFO Method of Process Costing,
(Step 3)

(Step 4)
Costs added in current period

Divide by equivalent units of work done in current period
(Step 5)
Costs added to beginning work in process in current period
Total
Production
Costs
$ 90,000
246,300
$336,300
$ 90,000
34,350
124,350
130,416
254,766
81,534
$336,300
Transferred-in
Costs
Direct Materials Conversion Costs
$ 60,000
$
0
$ 30,000
130,800
37,500
78,000
$190,800
$37,500
$108,000
$130,800
$37,500
$ 78,000
135
$ 968.89
150
$ 250
$ 60,000
(0a $968.89)
$
0
+ (75a $250)
$ 30,000
+ (30 a $520)
(75b $968.89) + (75b $250)
+ (75b $520)
(60c $968.89) + (0c $250)

$190,800 +
$37,500
+ (45c $520)
+ $108,000
Equivalent units used to complete beginning work in process from Solution Exhibit 17-28A, step 2.
Equivalent units started and completed from Solution Exhibit 17-28A, step 2.
c
Equivalent units in ending work in process from Solution Exhibit 17-28A, step 2.
b
17-18
150
520
17.29 (15-20 min.) Standard-costing method.

1. Since there was no additional work needed on the beginning inventory with respect to
materials, the initial mulch must have been 100% complete with respect to materials. For
conversion costs, the work done to complete the opening inventory was 434,250
965,000 = 45%. Therefore, the unfinished mulch in opening inventory must have been
55% complete with respect to conversion costs.
2. It is clear that the ending WIP is also 100% complete with respect to direct materials
(1,817,000 1,817,000), and it is 60% (= 1,090,200 1,817,000) complete with regard
to conversion costs.
3. We can first obtain the total standard costs per unit. The number of units started and
completed during August is 845,000, and a total cost of $6,717,750 is attached to them.
The per unit standard cost is therefore ($6,717,750 845,000) = $7.95. If x and y
represent the per unit cost for direct materials and conversion costs, respectively, we
therefore know that:
x + y = 7.95
We also know that the ending inventory is costed at $12,192,070 and contains 1,817,000
equivalent units of materials and 1,090,200 equivalent units of conversion costs. This
provides a second equation:
1,817,000 x + 1,090,200 y = 12,192,070.
Solving these equations reveals that the direct materials cost per unit, x, is $4.85, while
the conversion cost per unit, y, is $3.10.
4. Finally, the opening WIP contained 965,000 equivalent units of materials and (965,000434,250) = 530,750 equivalent units of conversion costs. Applying the standard costs
computed in step (3), the cost of the opening inventory must have been:
965,000 $4.85 + 530,750 $3.10 = $6,325,575.
17-19
17-30 (25 min.) Weighted-average method.

1.
Since direct materials are added at the beginning of the assembly process, the units in this
department must be 100% complete with respect to direct materials. Solution Exhibit 17-30A
shows equivalent units of work done to date:
Direct materials
Conversion costs
25,000 equivalent units

24,250 equivalent units
2. & 3. Solution Exhibit 17-30B summarizes the total Assembly Department costs for October
2009, calculates cost per equivalent unit of work done to date, and assigns these costs to units
completed (and transferred out) and to units in ending work in process using the weightedaverage method.
Weighted-Average Method of Process Costing, Assembly Department of Larsen Company, for
October 2009.
(Step 1)
Flow of Production
To account for
2,500 100%; 2,500 70%
Accounted for
Work done to date
Physical
Units
5,000
20,000
25,000
22,500
2,500
(Step 2)
Equivalent Units
Direct
Conversion
Materials
Costs
22,500
22,500
2,500
1,750
25,000
24,250
25,000
17-20

Weighted-Average Method of Process Costing, Assembly Department of Larsen Company,
for October 2009.
Total
Production
Costs
$1,652,750
6,837,500
$8,490,250
(Step 3)

(Step 4)

(Step 5)
$7,717,500
772,750
$8,490,250
Direct
Materials
$1,250,000
4,500,000
$5,750,000
Conversion
Costs
$ 402,750
2,337,500
$2,740,250
$5,750,000
$2,740,250
24,250
$
113
25,000
230
(22,500* $230) + (22,500* $113)

(2,500 $230) + (1,750 $113)
$6,150,000 +
$2,619,000
Equivalent units completed and transferred out from Solution Exhibit 17-30A, Step 2.
Equivalent units in work in process, ending from Solution Exhibit 17-30A, Step 2.
17-31 (10 min.) Journal entries (continuation of 17-30).

1.
2.
3.
Work in ProcessAssembly Department

Accounts Payable
Direct materials purchased and used in
production in October.
4,500,000

Various accounts
Conversion costs incurred in October.
2,337,500
4,500,000
Work in ProcessTesting Department

7,717,500
Cost of goods completed and transferred out
in October from the Assembly Department to the Testing Department.
Beginning inventory, October 1 1,652,750 3. Transferred out to
1. Direct materials
4,500,000
2. Conversion costs
2,337,500
Ending Inventory, October 31
772,750
17-21
2,337,500
7,717,500
7,717,500
17-32 (20 min.) FIFO method (continuation of 17-30).

1.
The equivalent units of work done in the current period in the Assembly Department in
October 2009 for direct materials and conversion costs are shown in Solution Exhibit 17-32A.
2.
The cost per equivalent unit of work done in the current period in the Assembly
Department in October 2009 for direct materials and conversion costs is calculated in Solution
Exhibit 17-32B.
3.
Solution Exhibit 17-32B summarizes the total Assembly Department costs for October
2009, and assigns these costs to units completed (and transferred out) and units in ending work in
process under the FIFO method.
The cost per equivalent unit of beginning inventory and of work done in the current
period differ:
Direct materials
Conversion costs
Total cost per unit
Beginning
Inventory
$250.00 ($1,250,000 5,000 equiv. units)
134.25 ($ 402,750 3,000 equiv. units)
$384.25
Cost per equivalent unit (weighted-average)

Cost per equivalent unit (FIFO)
Work Done in
Current Period
$225.00
110.00
$335.00
Direct
Materials
$230*
$225**
Conversion
Costs
$113*
$110**
from Solution Exhibit 17-30B

from Solution Exhibit 17-32B
**
The cost per equivalent unit differs between the two methods because each method uses different
costs as the numerator of the calculation. FIFO uses only the costs added during the current
period whereas weighted-average uses the costs from the beginning work-in-process as well as
costs added during the current period. Both methods also use different equivalent units in the
denominator.
The following table summarizes the costs assigned to units completed and those still in
process under the weighted-average and FIFO process-costing methods for our example.
Weighted
Average
FIFO
(Solution
(Solution
Exhibit 17-30B) Exhibit 17-32B) Difference
Cost of units completed and transferred out $7,717,500
$7,735,250
+ $17,750
772,750
755,000
$17,750
$8,490,250
$8,490,250
17-22
The FIFO ending inventory is lower than the weighted-average ending inventory by
$17,750. This is because FIFO assumes that all the higher-cost prior-period units in work in
process are the first to be completed and transferred out while ending work in process consists of
only the lower-cost current-period units. The weighted-average method, however, smoothes out
cost per equivalent unit by assuming that more of the lower-cost units are completed and
transferred out, while some of the higher-cost units in beginning work in process are placed in
ending work in process. So, in this case, the weighted-average method results in a lower cost of
units completed and transferred out and a higher ending work-in-process inventory relative to the
FIFO method.
Assembly Department of Larsen Company for October 2009.
(Step 1)
Flow of Production
To account for
period:
5,000 (100% 100%); 5,000 (100% 60%)
17,500 100%, 17,500 100%
2,500 100%; 2,500 70%
Accounted for
(Step 2)
Equivalent Units
Direct
Conversion
Materials
Costs
Physical
Units
5,000
20,000
25,000
5,000
17,00
0
2,500
_____
25,000
2,000
17,500
17,500
2,500
1,750
______
21,250
20,000
22,500 physical units completed and transferred out minus 5,000 physical units completed and transferred out from
17-23

Steps 3, 4, and 5: Summarize Total Costs to Account For, Compute Cost per Equivalent Unit, and Assign Total Costs to
Units Completed and to Units in Ending Work in Process;
FIFO Method of Process Costing, Assembly Department of Larsen Company for October 2009.

Total
Production
Costs
$1,652,750
6,837,500
$8,490,250

Total costs of units completed & transferred out
$1,652,750
220,000
1,872,750
5,862,500
7,735,250
755,000
$8,490,250
#
17-24
Direct
Materials
$1,250,000
4,500,000
$5,750,000
Conversion
Costs
$ 402,750
2,337,500
$2,740,250
$4,500,000
$2,337,500
20,000
$
225
21,250
110
$1,250,000
+ $ 402,750
*
(0 $225) + (2,000* $110)
(17,500 $225) + (17,500 $110)
(2,500# $225) + (1,750# $110)
$5,750,000
+ $2,740,250
17.33 (30 min.) Transferred-in costs, weighted-average method (related to 17-30 to 17-32).
1.
Transferred-in costs are 100% complete, and direct materials are 0% complete in both
beginning and ending work-in-process inventory. The reason is that transferred-in costs are
always 100% complete as soon as they are transferred in from the Assembly Department to the
Testing Department. Direct materials in beginning or ending work in process for the Testing
Department are 0% complete because direct materials are added only when the testing process is
90% complete and the units in beginning and ending work in process are only 70% and 60%
complete, respectively.
2.
Solution Exhibit 17-33A computes the equivalent units of work done to date in the
Testing Department for transferred-in costs, direct materials, and conversion costs.
3.
Solution Exhibit 17-33B summarizes total Testing Department costs for October 2009,
calculates the cost per equivalent unit of work done to date in the Testing Department for
transferred-in costs, direct materials, and conversion costs, and assigns these costs to units
completed and transferred out and to units in ending work in process using the weighted-average
method.
4.
Journal entries:
a. Work in ProcessTesting Department
during October from the Assembly
Department to the Testing Department
b. Finished Goods
during October from the Testing Department
to Finished Goods inventory
17-25
7,717,500
7,717,500
23,459,600
23,459,600

Testing Department of Larsen Company for October 2009.
(Step 1)
Physical
Flow of Production
Units
7,500
Transferred in during current period (given) 22,500
To account for
30,000
26,300
3,700
3,700 100%; 3,700 0%; 3,700 60%
Accounted for
30,000
Work done to date
(Step 2)
Equivalent Units
Transferred-in
Direct
Conversion
Costs
Materials
Costs
26,300
26,300
26,300
3,700
2,220
30,000
26,300
28,520
17-26

Steps 3, 4, and 5: Summarize Total Costs to Account For, Compute Cost per Equivalent Unit, and Assign Total Costs to Units Completed
and to Units in Ending Work in Process;
(Step 3)Work in process, beginning (given)

Total
Production
Costs
$ 3,767,960
21,378,100
$25,146,060
(Step 4) Costs incurred to date

Equivalent unit costs of work done to date
(Step 5)Assignment of costs:
$23,459,600
1,686,460
$25,146,060
*Equivalent units completed and transferred out from Solution Exhibit 17-33A, Step 2.
17-27
Transferred
-in Costs
$ 2,932,500
7,717,500
$10,650,000
Direct
Materials
$
0
9,704,700
$9,704,700
Conversion
Costs
$ 835,460
3,955,900
$4,791,360
$10,650,000
$9,704,700
$4,791,360
30,000
355
26,300
369
(26,300* $355) + (26,300* $369)

(3,700 $355) +
(0 $369)
$10,429,500
+ $9,704,700
28,520
168
+ (26,300* $168)
+ (2,220 $168)
+
$4,791,360
17-34 (30 min.) Transferred-in costs, FIFO method (continuation of 17-33).

1.
As explained in Problem 17-33, requirement 1, transferred-in costs are 100% complete
and direct materials are 0% complete in both beginning and ending work-in-process inventory.
2.
The equivalent units of work done in October 2009 in the Testing Department for
transferred-in costs, direct materials, and conversion costs are calculated in Solution Exhibit 1734A.
3.
Solution Exhibit 17-34B summarizes total Testing Department costs for October 2009,
calculates the cost per equivalent unit of work done in October 2009 in the Testing Department
for transferred-in costs, direct materials, and conversion costs, and assigns these costs to units
completed and transferred out and to units in ending work in process using the FIFO method.
4.
Journal entries:
a. Work in ProcessTesting Department
during October from the Assembly Dept. to
the Testing Dept.
b. Finished Goods
during October from the Testing Department
to Finished Goods inventory.
17-28
7,735,250
7,735,250
23,463,766
23,463,766

Flow of Production
To account for
period:
7,500 (100% 100%); 7,500 (100% 0%);
7,500 (100% 70%)
18,800 100%; 18,800 100%; 18,800 100%
3,700 100%; 3,700 0%; 3,700 60%
Accounted for
(Step 2)
(Step 1)
Equivalent Units
Physical TransferredDirect
Conversion
Units
in Costs
Materials
Costs
7,500
22,500
30,000
7,500
0
7,500
2,250
18,800
18,800
18,800
3,700
2,220
______
22,500
_____
26,300
18,800
3,700
______
30,000
23,270


Total
Production
Costs
$ 3,717,335
21,395,850
$25,113,185

Cost per equiv. unit of work done in current period
(Step5) Assignmentofcosts:
Completedandtransferredout(26,300units):
Workinprocess,beginning(7,500units)
Costsaddedtobeg.workinprocessincurrentperiod
Totalfrombeginninginventory
Startedandcompleted(18,800units)
Totalcostsofunitscompleted&transferredout
Workinprocess,ending(3,700units)
Totalcostsaccountedfor
$ 3,717,335
3,150,000
6,867,335
16,596,431
23,463,766
1,649,419
$25,113,185
Direct
Materials
$
0
9,704,700
$9,704,700
Conversion
Costs
$ 835,460
3,955,900
$4,791,360
$ 7,735,250
$9,704,700
$3,955,900
22,500
343.79
26,300
369.00
23,270
170.00
$2,881,875 +
$0
+ $835,460
*
(0 $343.79) +
(7,500 $369.00) + (2,250* $170.00)
*
(18,800 $343.79)+(18,800 $369.00)+(18,800 $170.00)

(3,700# $343.79) + (0# $369.00)
$10,617,125
+ $9,704,700
#
17-30
Transferred-in
Costs
$ 2,881,875
7,735,250
$10,617,125
+ (2,220# $170.00)
+ $4,791,360
17-35 (25 min.) Weighted-average method.

Solution Exhibit 17-35A shows equivalent units of work done to date of:
Direct materials
Conversion costs
625 equivalent units

525 equivalent units
Note that direct materials are added when the Assembly Department process is 10%
complete. Both the beginning and ending work in process are more than 10% complete and
hence are 100% complete with respect to direct materials.
Solution Exhibit 17-35B summarizes the total Assembly Department costs for April
2009, calculates cost per equivalent unit of work done to date for direct materials and conversion
costs, and assigns these costs to units completed (and transferred out), and to units in ending
work in process using the weighted-average method.
Weighted-Average Method of Process Costing, Assembly Department of Porter Handcraft for
April 2009.
Flow of Production
To account for
125 100%; 125 20%
Accounted for
Work done to date
(Step 1)
Equivalent Units
Physical
Units
75
550
625
500
125
(Step 2)
Direct
Materials
Conversion
Costs
500
500
125
25
625
525
625
17-31

Weighted-Average Method of Process Costing, Assembly Department of Porter, April 2009.

Total
Production
Costs
Direct
Materials
$ 1,910
28,490
$30,400
$ 1,775
17,600
$19,375
$19,375
$11,025
(Step 4) Costs incurred to date

Divide by equivalent units of work done to
date (Solution Exhibit 17-35A)
*
$26,000
4,400
$30,400
17-32
135
10,890
$11,025
525
21
(500* $31) + (500* $21)

(125 $31) + (25 $21)
$19,375
+ $11,025
625
31
Conversion
Costs
17-36 (510 min.)
Journal entries (continuation of 17-35).
1. Work in Process Assembly Department

Accounts Payable
To record direct materials purchased and
used in production during April
17,600
2. Work in Process Assembly Department

Various Accounts
To record Assembly Department conversion
costs for April
10,890
3. Work in ProcessFinishing Department

To record cost of goods completed and transferred
out in April from the Assembly Department
to the Finishing Department
26,000
17,600
10,890
26,000

Beginning inventory, April 1
1,910
3. Transferred out to
1. Direct materials
17,600
Work in ProcessFinishing
2. Conversion costs
10,890
Ending inventory, April 30
4,400
17-33
26,000
17-37 (20 min.) FIFO method (continuation of 17-35).

The equivalent units of work done in April 2009 in the Assembly Department for direct materials
and conversion costs are shown in Solution Exhibit 17-37A.
Solution Exhibit 17-37B summarizes the total Assembly Department costs for April 2009,
calculates the cost per equivalent unit of work done in April 2009 in the Assembly Department
for direct materials and conversion costs, and assigns these costs to units completed (and
transferred out) and to units in ending work in process under the FIFO method.
The equivalent units of work done in beginning inventory is: direct materials, 75 100% =
75; and conversion costs 75 40% = 30. The cost per equivalent unit of beginning inventory and
of work done in the current period are:
Direct materials
Conversion costs
Beginning
Inventory
$23.67 ($1,775 75)
$4.50 ($135 30)
Work Done in
Current Period
(Calculated Under
FIFO Method)
$32
$22
process under the weighted-average and FIFO process-costing methods for our example.
Cost of units completed and transferred out

Weighted
Average
FIFO
(Solution
(Solution
Exhibit 17-35B) Exhibit 17-37B) Difference
$26,000
$25,850
$150
4,400
4,550
+$150
$30,400
$30,400
The FIFO ending inventory is higher than the weighted-average ending inventory by $150.
This is because FIFO assumes that all the lower-cost prior-period units in work in process are the
first to be completed and transferred out while ending work in process consists of only the
higher-cost current-period units. The weighted-average method, however, smoothes out cost per
equivalent unit by assuming that more of the higher-cost units are completed and transferred out,
while some of the lower-cost units in beginning work in process are placed in ending work in
process. Hence, in this case, the weighted-average method results in a higher cost of units
completed and transferred out and a lower ending work-in-process inventory relative to the FIFO
method.
17-34

FIFO Method of Process Costing, Assembly Department of Porter Handcraft for April 2009.
Flow of Production
To account for
75 (100% 100%); 75 (100% 40%)
425 100%; 425 100%
125 100%; 125 20%
Accounted for
(Step 1)
Physical
Units
75
550
625
(Step 2)
Equivalent Units
Direct
Conversion
Materials
Costs
75
0
45
425
425
125
25
550
495
425
125
625
500 physical units completed and transferred out minus 75 physical units completed and transferred out from

FIFO Method of Process Costing, Assembly Department of Porter Handcraft for April 2009.

current period (Exhibit 17-37A)
Cost per equivalent unit of work done in current
period
Completed and transferred out (500 units):
Costs added to begin. work in process in
current period
Total costs of units completed & tsfd. out
Total
Production
Costs
$ 1,910
28,490
$30,400
Direct
Materials
$ 1,775
17,600
$19,375
$17,600
Conversion
Costs
$ 135
10,890
$11,025
$10,890
550
495
32
22
$ 1,910
$1,775
$135
990
2,900
22,950
25,850
4,550
$30,400
(0* $32)
(45* $22)
(425 $32)
(425 $22)
(125# $32) +
$19,375
+
(25# $22)
$11,025
#
17-35
17.38 (30 min.) Transferred-in costs, weighted average.

1.
Binding Department for transferred-in costs, direct materials, and conversion costs.
Solution Exhibit 17-38B summarizes total Binding Department costs for April 2009,
calculates the cost per equivalent unit of work done to date in the Binding Department for
completed and transferred out and to units in ending work in process using the weighted-average
method.
2.
Journal entries:
a. Work in Process Binding Department
Work in ProcessPrinting Department
during April from the Printing Department
to the Binding Department
b. Finished Goods
Work in Process Binding Department
during April from the Binding Department
to Finished Goods inventory
144,000
144,000
249,012
249,012

Binding Department of Publish, Inc. for April 2009.
(Step 1)
Flow of Production
To account for
Work in process, endinga (given)
(600 100%; 600 0%; 600 60%)
Accounted for
Work done to date
a
(Step 2)
Equivalent Units
Physical Transferred- Direct Conversion
Units
in Costs Materials Costs
900
2,700
3,600
3,000
3,000
3,000
3,000
600
600
0
360
3,600
3,600
3,000
3,360
17-36

(Step 3)

(Step 4)

(Step 5)
a
b
Total
Production
Costs
$ 47,775
239,700
$287,475
$249,012
38,463
$287,475
Equivalent units completed and transferred out from Sol. Exhibit 17-38A, step 2.
Equivalent units in ending work in process from Sol. Exhibit 17-38A, step 2.
17-37
Transferred-in
Costs
$ 32,775
144,000
$176,775
Direct
Materials
$
0
26,700
$26,700
Conversion
Costs
$15,000
69,000
$84,000
$176,775
$26,700
$84,000
3,600
$ 49.104
3,000
$ 8.90
3,360
$
25
(3,000a $49.104) + (3,000a $8.90) + (3,000a $25)

(600b $49.104) +
(0b $8.90) + (360b $25)
$176,77
5
+ $26,700
$84,000
17-39 (30 min.) Transferred-in costs, FIFO method (continuation of 17-38).

1.
Solution Exhibit 17-39A calculates the equivalent units of work done in April 2009 in the
Binding Department for transferred-in costs, direct materials, and conversion costs.
Solution Exhibit 17-39B summarizes total Binding Department costs for April 2009,
calculates the cost per equivalent unit of work done in April 2009 in the Binding Department for
completed and transferred out and to units in ending work in process using the FIFO method.
Journal entries:
a. Work in Process Binding Department
Work in ProcessPrinting Department
during April from the Printing Department to
the Binding Department.
b.
Finished Goods
Work in Process Binding Department
during April from the Binding Department
to Finished Goods inventory.
141,750
141,750
240,525
240,525
2.
The equivalent units of work done in beginning inventory is: Transferred-in costs, 900
100% = 900; direct materials, 900 0% = 0; and conversion costs, 900 40% = 360. The cost
per equivalent unit of beginning inventory and of work done in the current period are:
Transferred-in costs (weighted average)

Transferred-in costs (FIFO)
Direct materials
Conversion costs
Beginning
Inventory
$36.42 ($32,775 900)
$30.95 ($27,855 900)
$41.67 ($15,000 360)
Work Done in
Current Period
$53.33 ($144,000 2,700)
$52.50 ($141,750 2,700)
$ 8.90
$23.00
process under the weighted-average and FIFO process-costing methods for the Binding
Department.
Cost of units completed and transferred out

Weighted
Average
FIFO
(Solution
(Solution
Exhibit 17-38B) Exhibit 17-39B)
$249,012
$240,525
38,463
39,780
$287,475
$280,305
17-38
Difference
$8,487
+$1,317
The FIFO ending inventory is higher than the weighted-average ending inventory by
$1,317. This is because FIFO assumes that all the lower-cost prior-period units in work in
process (resulting from the lower transferred-in costs in beginning inventory) are the first to be
completed and transferred out while ending work in process consists of only the higher-cost
current-period units. The weighted-average method, however, smoothes out cost per equivalent
unit by assuming that more of the higher-cost units are completed and transferred out, while
some of the lower-cost units in beginning work in process are placed in ending work in process.
Hence, in this case, the weighted-average method results in a higher cost of units completed and
transferred out and a lower ending work-in-process inventory relative to FIFO. Note that the
difference in cost of units completed and transferred out ($8,487) does not fully offset the
difference in ending work-in-process inventory (+$1,317). This is because the FIFO and
weighted-average methods result in different values for transferred-in costs with respect to both
beginning inventory and costs transferred in during the period.
(Step 1)
Flow of Production
To account for
From beginning work in processa
[900 (100% 100%); 900 (100% 0%); 900
(2,100 100%; 2,100 100%; 2,100 100%)
Work in process, endingc (given)
(600 100%; 600 x 0%; 600 60%)
Accounted for
(Step 2)
Equivalent Units
Physical Transferred-in
Direct
Conversion
Units
Costs
Materials
Costs
900
2,700
3,600
(100% 40%)]
900
0
900
540
2,100
2,100
2,100
600
____
2,700
0
____
3,000
360
____
3,000
2,100b
600
____
3,600
3,000 physical units completed and transferred out minus 900 physical units completed and transferred out from beginning
work-in-process inventory.
c
b
17-39


Total
Production
Costs
$ 42,855
237,450
$280,305
Transferred-in Costs
$ 27,855
141,750
$169,605

Divide by equivalent units of work done in current period (Sol.
Exhibit 17-39A)
Costs added to beginning work in process in current period
a
$ 42,855
20,430
63,285
177,240
240,525
39,780
$280,305
17-40
Conversion
Costs
$15,000
69,000
$84,000
$141,750
$26,700
$69,000
2,700
$ 52.50
3,000
$ 8.90
3,000
$ 23.00
$27,855
+
(0a $52.50) +
$0
+
$15,000
(900a $8.90) + (540a $23)
(2,100b $52.50) + (2,100b $8.90) + (2,100b $23)

(600c $52.50) +
$169,605
+
Equivalent units used to complete beginning work in process from Solution Exhibit 17-39A, step 2.
Equivalent units started and completed from Solution Exhibit 17-39A, step 2.
c
Equivalent units in ending work in process from Solution Exhibit 17-39A, step 2.
b
Direct
Materials
$
0
26,700
$26,700
(0c $8.90) +
$26,700
(360c $23)
+
$84,000
17-40 (45 min.) Transferred-in costs, weighted-average and FIFO methods.

1.
Drying and Packaging Department for transferred-in costs, direct materials, and conversion
costs. Solution Exhibit 17-40B summarizes total Drying and Packaging Department costs for
week 37, calculates the cost per equivalent unit of work done to date in the Drying and
Packaging Department for transferred-in costs, direct materials, and conversion costs, and
assigns these costs to units completed and transferred out and to units in ending work in process
using the weighted-average method.
2.
Solution Exhibit 17-40C computes the equivalent units of work done in week 37 in the
Drying and Packaging Department for transferred-in costs, direct materials, and conversion
costs. Solution Exhibit 17-40D summarizes total Drying and Packaging Department costs for
week 37, calculates the cost per equivalent unit of work done in week 37 in the Drying and
Packaging Department for transferred-in costs, direct materials, and conversion costs, and
assigns these costs to units completed and transferred out and to units in ending work in process
using the FIFO method.
Drying and Packaging Department of Frito-Lay Inc. for Week 37.
(Step 1)
(Step 2)
Equivalent Units
Physical
TransferredDirect
Conversion
Flow of Production
Units
in Costs
Materials
Costs
1,250
Transferred in during current period (given) 5,000
To account for
6,250
5,250
5,250
5,250
5,250
1,000
1,000 100%; 1,000 0%; 1,000 40%
1,000
0
400
Accounted for
6,250
Work done to date
6,250
5,250
5,650
17-41

Steps 3, 4, and 5: Summarize Total Costs to Account For, Compute Cost per Equivalent Unit, and Assign Total
Costs to Units Completed and to Units in Ending Work in Process;
(Step 3)

(Step 4)

Divide by equivalent units of work done
to date (Solution Exhibit 17-40A)
Equivalent unit costs of work done to date
(Step 5)
Total
Production
Costs
$ 38,060
159,600
$197,660
$174,300
23,360
$197,660
17-42
Transferred
-in Costs
$ 29,000
96,000
$125,000
Direct
Materials
$
0
25,200
$25,200
Conversion
Costs
$ 9,060
38,400
$47,460
$125,000
$25,200
$47,460
5,250
$ 4.80
5,650
$ 8.40
6,250
20
(5,250* $20) + (5,250* $4.80) + (5,250* $8.40)

(1,000 $20) +
(0 $4.80) + (400 $8.40)
$125,000
$25,200
+ $47,460
SOLUTION EXHIBIT 17-40C

Flow of Production
To account for
1,250 (100% 100%); 1,250 (100% 0%);
1,250 (100% 80%)
4,000 100%; 4,000 100%; 4,000 100%
1,000 100%; 1,000 0%; 1,000 40%
Accounted for
(Step 1)
Physical
Units
1,250
5,000
6,250
(Step 2)
Equivalent Units
TransferredDirect
Conversion
in Costs
Materials
Costs
1,250
0
1,250
250
4,000
4,000
4,000
1,000
400
5,000
5,250
4,650
4,000
1,000
6,250
17-43
SOLUTION EXHIBIT 17-40D

Steps 3, 4, and 5: Summarize Total Costs to Account For, Compute Cost per Equivalent Unit, and Assign Total Costs
to Units Completed and to Units in Ending Work in Process;

Total
Production
Costs
$ 37,980
157,600
$195,580

Divide by equivalent units of work done in current period
(Solution Exhibit 17-40C)
Transferred
-in Costs
$ 28,920
94,000
$122,920
Direct
Materials
$
0
25,200
$25,200
Conversion
Costs
$ 9,060
38,400
$47,460
$ 94,000
$25,200
$38,400
5,000
$ 18.80
5,250
$ 4.80
4,650
$ 8.258

Total costs of units completed & transferred out
$ 37,980
8,065
46,045
127,432
173,477
22,103
$195,580
$28,920 +
$0
+
$9,060
(0* $18.80) + (1,250* $4.80) + (250* $8.258)
(4,000 $18.80) + (4,000 $4.80) + (4,000 $8.258)
(1,000# $18.80) + (0# $4.80) +
$122,920 +
$25,200
(Step 3)
*
Equivalent units used to complete beginning work in process from Solution Exhibit 17-40C, Step 2.
Equivalent units started and completed from Solution Exhibit 17-40C, Step 2.
#
Equivalent units in ending work in process from Solution Exhibit 17-40C, Step 2.
17-44
(400# $8.258)
$47,460
17.41 (30-35 min.) Weighted-average and standard-costing method.

1.
Solution Exhibit 17-41A computes the equivalent units of work done in November 2010
by Paquitas Pearls Company for direct materials and conversion costs.
2. and 3.
Solution Exhibit 17-41B summarizes total costs of the Paquitas Pearls Company
for November 30, 2010 and, using the standard cost per equivalent unit for direct materials and
conversion costs, assigns these costs to units completed and transferred out and to units in ending
work in process. The exhibit also summarizes the cost variances for direct materials and
conversion costs for November 2010.
Standard Costing Method of Process Costing,
Paquitas Pearls Company for the month ended November 30, 2010.
(Step 1)
Physical
Units
Flow of Production

To account for
25,000 (100% 100%); 25,000 (100% 75%)
100,000 100%, 100,000 100%
26,250 100%; 26,250 50%
Accounted for
25,000
126,250
151,250
(Step 2)
Equivalent Units
Direct
Conversion
Materials
Costs
25,000
0
6,250
100,000
100,000
26,250
_______
126,250
13,125
_______
119,375
100,000
26,250
_______
151,250
17-45

Steps 3, 4, and 5: Summarize Total Costs to Account For, Compute Cost per
Equivalent Unit, and Assign Total Costs to Units Completed and to Units in
Ending Work in Process;
Standard-Costing Method of Process Costing,
Paquitas Pearls Company for the month ended November 30, 2010.

Total
Production
Direct
Conversion
Costs
Materials
Costs
$ 250,000
$ 62,500
+
$ 187,500
1,509,375
(126,250 2.50) + (119,375 $10.00)
$1,759,375
$378,125
+
$1,381,250

$ 250,000
62,500
312,500
1,250,000
1,562,500
196,875
$1,759,375
Variance
2.50
$62,500
(0* $2.50)
17-46
10.00
+
$187,500
+ (6,250* $10.00)
(100,000 $2.50) + (100,000 $10.00)

(26,250# $2.50) + (13,125# $10.00)
$378,125
+
$1,381,250
$315,625
327,500
$ 11,875 U
#
$1,193,750
1,207,415
$ 13,665 U
17-42 (25-30 min.) Operation costing

1. To obtain the overhead rates, divide the budgeted cost of each operation by the pairs of shoes
that are expected to go through that operation.
Operation 1
Operation 2
Operation 3
Operation 4
Operation 5
Operation 6
Budgeted
Conversion
Cost
$145,125
58,050
4,275
67,725
13,500
2,025
Budgeted
Pairs of
Shoes
32,250
32,250
2,250
32,250
30,000
2,250
Conversion
Cost per Pair
of Shoes
$4.50
1.80
1.90
2.10
0.45
0.90
2.
Shoe type:
Quantity:
Direct Materials
Operation 1
Operation 2
Operation 3
Operation 4
Operation 5
Operation 6
Total
Work Order
10399
Basic
1,000
$13,000
4,500
1,800
0
2,100
450
0
$21,850
Work Order
10400
Elaborate
150
$4,200
675
270
285
315
0
135
$5,880
The direct materials costs per unit vary based on the type of shoe ($390,000 30,000 = $13 for
the Basic, and $63,000 2,250 = $28 for the Elaborate). Conversion costs are charged using the
rates computed in part (1), taking into account the specific operations that each type of shoe
actually goes through.
3.
Work order 10399 (Basic shoes):
Work order 10400 (Elaborate shoes):
Total cost
$21,850
Divided by number of
pairs of shoes:
1,000
Cost per pair of plain shoes: $ 21.85
Total cost:
$5,880
Divided by number of
pairs of shoes:
150
Cost per pair of fancy shoes: $39.20
17-47

Acct 303 Chapter 17

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Acct 303 Chapter 17

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CHAPTER 17

Direct materials cost per unit ($750,000 10,000)

Direct materials cost per unit

SOLUTION EXHIBIT 17-16B

(Step 3) Costs added during February

17-17 (20 min.) Journal entries (continuation of 17-16).

Postings to the Work in ProcessAssembly account follow.

SOLUTION EXHIBIT 17-18B

(Step 3) Costs added during July

(Step 5) Assignment of costs:

(35,000* $5) + (35,000* $2) + (35,000* $3)

17-19 (15 min.) Weighted-average method, equivalent units.

17-20 (20 min.) Weighted-average method, assigning costs (continuation of 17-19).

Work in process, beginning (given)

Costs incurred to date

(460* $6,980) + (460* $2,990)

17-21 (15 min.) FIFO method, equivalent units.

17-22 (20 min.) FIFO method, assigning costs (continuation of 17-21).

(Step 3) Work in process, beginning (given)

(Step 4) Costs added in current period

(8* $7,000) + (48* $3,000)

(380 $7,000) + (380 $3,000)

(72# $7,000) + (36# $3,000)

17-23 (20-25 min.) Standard-costing method, assigning costs.

Work in process, beginning (given)

(Step 3) Work in process, beginning (given)

(Step 4) Standard cost per equivalent unit (given)

(Step 5) Assignment of costs at standard costs:

17-24 (25 min.) Weighted-average method, assigning costs.

*Degree of completion: direct materials, 100%; conversion costs, 50%.

SOLUTION EXHIBIT 17-24B

Work in process, beginning (given)

Costs incurred to date

*Equivalent units completed and transferred out (given).

Equivalent units in ending work in process (given).

(42,500* $6.80) + (42,500* $10.50)

17-25 (30 min.) FIFO method, assigning costs.

Work in process, beginning (given)

SOLUTION EXHIBIT 17-25B

(Step 3) Work in process, beginning (given)

17-26 (30 min.) Standard-costing method, assigning costs.

SOLUTION EXHIBIT 17-26

(Step 3) Work in process, beginning (given)

(12,500 $6.60) + (8,750 $10.40)

17-27 (3540 min.) Transferred-in costs, weighted-average method.

Work in process, beginning (given)

SOLUTION EXHIBIT 17-27B

Work in process, beginning (given)

Costs incurred to date

(150 a $1,035.71) + (150 a $250) + (150a $553.85)

17-28 (3540 min.) Transferred-in costs, FIFO method.

SOLUTION EXHIBIT 17-28B

Work in process, beginning (given)

Costs added in current period

(75b $968.89) + (75b $250)

(60c $968.89) + (0c $250)

17.29 (15-20 min.) Standard-costing method.

17-30 (25 min.) Weighted-average method.

25,000 equivalent units

SOLUTION EXHIBIT 17-30B

Work in process, beginning (given)

Costs incurred to date

(22,500* $230) + (22,500* $113)

17-31 (10 min.) Journal entries (continuation of 17-30).