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COMM 305 CHAPTER 4 REVIEW

Questions
1.Identifywhichcostingsystemjoborderorprocessthefollowingcompanieswouldprimarilyuse:(a)
QuakerOats,(b)FordMotorCompanyofCanada,(c)Kinko'sPrintShop,and(d)WarnerBros.Motion
Pictures.
2.Contrasttheprimaryfocusofjobordercostaccountingandofprocesscostaccounting.
3.Whatarethesimilaritiesbetweenajoborderandaprocesscostsystem?
4.Yourroommateisconfusedaboutthefeaturesofprocesscostaccounting.Identifyandexplainthe
distinctivefeaturesforyourroommate.
5.MelStorrerbelievestherearenosignificantdifferencesintheflowofcostsbetweenjobordercost
accountingandprocesscostaccounting.IsMelcorrect?Explain.
6.(a)Whatsourcedocumentsareusedinassigning(1)materialsand(2)labourtoproductioninaprocesscost
system?(b)Whatcriterionandbasisarecommonlyusedinallocatingoverheadtoprocesses?
7.AtAceCompany,overheadisassignedtoproductiondepartmentsattherateof$5permachinehour.In
July,machinehourswere3,000inthemachiningdepartmentand2,400intheassemblydepartment.
Preparetheentrytoassignoverheadtoproduction.
8.GaryWeissisuncertainaboutthestepsusedtoprepareaproductioncostreport.Statetheproceduresthat
arerequiredinthesequenceinwhichtheyareperformed.
9.Whatismeantbythetermequivalentunitsofproduction?
10.Howareequivalentunitsofproductioncalculated?
11.WetaskawinCompanyhadzerounitsofbeginningworkinprocess.Duringtheperiod,9,000unitswere
completed,andtherewere600unitsofendingworkinprocess.Whatweretheunitsstartedinto
production?
12.MendleCo.haszerounitsofbeginningworkinprocess.Duringtheperiod,12,000unitswerecompleted,
and800unitsofendingworkinprocesswereonefifthcompleteintermsofconversioncostand100%
completeintermsofmaterialscost.Whatweretheequivalentunitsofproductionfor(a)materialsand(b)
conversioncosts?
13.VenturinoCo.started3,000unitsfortheperiod.Itsbeginninginventoryis500unitsonefourthcomplete
intermsofconversioncostsand100%completeintermsofmaterialscosts.Itsendinginventoryis200
unitsonefifthcompleteintermsofconversioncostsand100%completeintermsofmaterialscosts.How
manyunitsweretransferredoutduringthisperiod?
14.KinerCompanytransfersout14,000unitsandhas2,000unitsofendingworkinprocessthatare25%
complete.Materialsareenteredatthebeginningoftheprocessandthereisnobeginningworkinprocess.
Assumingunitmaterialscostsof$3andunitconversioncostsof$6,whatarethecoststobeassignedto
units(a)transferredoutand(b)inendingworkinprocess?
15.(a)EveAdamsbelievestheproductioncostreportisanexternalreportforshareholders.IsEvecorrect?
Explain.
(b)Identifythesectionsinaproductioncostreport.
16.Whatpurposesareservedbyaproductioncostreport?
17.AtElDakikyCompany,thereare800unitsofendingworkinprocessthatare100%completeintermsof
materialsand40%completeintermsofconversioncosts.Iftheunitcostofmaterialsis$4andthecosts
assignedtothe800unitsis$6,000,whatistheperunitconversioncost?
18.Whatisthedifferencebetweenoperationscostingandaprocesscostingsystem?
19.Howdoesacompanydecidewhethertouseajoborderoraprocesscostsystem?

*20.SilvaCo.startedandcompleted2,000unitsfortheperiod.Itsbeginninginventoryis600units25%
completeanditsendinginventoryis400units20%complete.SilvausestheFIFOmethodtocalculate
equivalentunits.Howmanyunitsweretransferredoutthisperiod?

ANSWERS TO QUESTIONS
1.

(a)
(b)
(c)
(d)

Process cost.
Process cost.
Job-order.
Job-order.

2.

The primary focus of job-order cost accounting is on the individual job. In process cost
accounting, the primary focus is on the processes involved in producing homogeneous
products.

3.

The similarities are: (1) all three manufacturing cost elementsdirect materials, direct labour,
and overheadare the same; (2) the accumulation of the costs of materials, labour, and
overhead is the same; and (3) the flow of costs is the same.

4.

The features of process cost accounting are: (1) separate work in process accounts for
each process, (2) production cost reports, (3) product costs that are computed for each
accounting period, and (4) unit costs that are computed based on total manufacturing
costs.

5.

Mel is correct. The flow of costs is the same in process cost accounting as in job-order cost
accounting. The method of assigning costs, however, is significantly different.

6.

(a) (1) Materials are charged to production on the basis of materials requisition
slips.
(2) Labour is usually charged to production on the basis of the payroll register or
departmental payroll summaries.
(b) The criterion used in assigning overhead to processes is to identify the activity that
drives or causes the cost. In many companies this activity is machine time, not
direct labour.

7.

The entry to assign overhead to production is:


July 31
27,000

Work in ProcessMachining......................................................
Work in ProcessAssembly.......................................................
Manufacturing Overhead....................................................

15,000
12,000

8.

To prepare a production cost report, four steps are followed: (a) compute the physical unit
flow,
(b) compute equivalent units of production, (c) compute production costs per unit, and (d)
prepare a cost reconciliation schedule.

9.

Equivalent units of production measure the work done during the period, expressed in
fully completed units. This involves determining the amount of work completed on
unfinished units in ending inventory.

10. Equivalent units of production are the sum of: (1) units completed and transferred out and
(2) equivalent units of ending work in process.
11. Units started into production were 9,600 or (9,000 + 600).
12.

Units transferred out


Work in process
800 X 100%
800 X 20%
Total equivalent units
13. Units transferred out were 3,300.
Units to be accounted for
Work in process (beginning)
Started into production
Total units
Units accounted for
Completed and transferred out
Work in process (ending)
Total units

Equivalent Units
b)
a) Materia Conversion
ls
Costs
12,000
12,000
800
12,800

160
12,160

500
3,000
3,500
3,300
200
3,500

14. (a) The cost of the units transferred out is $126,000, or (14,000 $9).
(b) The cost of the units in ending inventory is $9,000, or [(2,000 $3) + (2,00025%
$6)].
15. (a) Eve is incorrect. The report is an internal report for management.
(b) There are four sections in a production cost report: (1) number of physical units, (2)
equivalent units determination, (3) unit costs, and (4) cost reconciliation schedule.
16. The production cost report provides the basis for evaluating: (1) the productivity of a
department,
(2) whether unit and total costs are reasonable, and (3) whether current performance is
meeting planned objectives.
17. The per unit conversion cost is $8.75. [Conversion costs = $6,000 $3,200 = $2,800. Equivalent
units for conversion costs are 320 (800 40%); $2,800 320 = $8.75.]
18. Operations costing is similar to process costing in that standardized methods are used to
manufacture the product. At the same time, the product may have some customized
individual features that require the use of a job order cost system.
19. In deciding which system to use, a cost-benefit tradeoff occurs. In a job order system,
detailed information related to the cost of the product is involved. The cost of implementing
this system is often expensive. In a process cost system, an average cost of the product will
suffice and therefore the cost to implement is less. In summary, the cost of implementing
the system must be balanced against the benefits provided from the additional information.

*20. Unit transferred out = beginning WIP + units started and completed = 2,000 + 600 = 2,600.

BriefExercises
Journalize BE41SargunarajManufacturingpurchases$75,000ofrawmaterialsonaccount,anditincurs
entriesfor
$80,000offactorylabourcosts.JournalizethetwotransactionsonMarch31assuming
accumulatin
thelabourcostsarenotpaiduntilApril.
gcosts.
Journalize BE42DataforSargunarajManufacturingaregiveninBE41.Supportingrecordsshowthat(a)
the
theassemblydepartmentused$64,000ofrawmaterialsand$45,000ofthefactorylabour,
assignment
and(b)thefinishingdepartmentusedtheremainder.Journalizetheassignmentofthecosts
of
totheprocessingdepartmentsonMarch31.
materials
andlabour
costs.

Journalize BE43FactorylabourdataforSargunarajManufacturingaregiveninBE42.Manufacturing
the
overheadisassignedtodepartmentsonthebasisof200%oflabourcosts.Journalizethe
assignment
assignmentofoverheadtotheassemblyandfinishingdepartments.
of
overhead
costs.

Calculate BE44BowyerManufacturingCompanyhasthefollowingproductiondataforselectedmonths.
physical

EndingWorkinProcess
unitsof
Month
BeginningWorkin
Units
Units
%CompleteinTermsof
production.
Process
TransferredOut
ConversionCosts
January

30,000

10,000

40%

March

40,000

8,000

75%

July

40,000

16,000

25%

Calculatethephysicalunitsforeachmonth.

Calculate BE45UsingthedatainBE44,calculateequivalentunitsofproductionformaterialsand
equivalent
conversioncosts,assumingmaterialsareenteredatthebeginningoftheprocess.
unitsof
production.

Calculate BE46BlueRedCompanystarted9,000unitsduringthemonthofMarch.Therewere2,000units
unitcosts
inthebeginningworkinprocessinventoryand3,000unitsintheendingworkinprocess
of
inventory.CalculateunitscompletedandtransferredoutduringMarch.
production.
Assign
BE47HindiCompanyhasthefollowingproductiondataforApril:40,000unitstransferredout,
coststo
and5,000unitsinendingworkinprocessthatare100%completeformaterialsand40%
units
completeforconversioncosts.Ifunitmaterialscostis$4andunitconversioncostis$9,
transferred
determinethecoststobeassignedtotheunitstransferredoutandtheunitsinendingwork
outandin
inprocess.
process.

Calculate
unitcosts.

Preparea
cost
reconciliatio
nschedule.

*BE48OnSeptember1,DeltaCompanyhad30,000unitsinprocess,whichwere30%
completed.Materialsareaddedatthebeginningoftheprocess.Duringthemonth
170,000unitswerestartedand180,000completed.Endingworkinprocesswas50%
complete.
Calculate(a)theequivalentunitsofproductionformaterialsifweightedaveragewere
usedand(b)theequivalentunitsofproductionformaterialsifFIFOwereused.

BE49ProductioncostschargeabletotheFinishingDepartmentinJuneatYeunCompanyare
materials$15,000,labour$29,500,andoverhead$18,000.Equivalentunitsof
productionare20,000formaterialsand19,000forconversioncosts.Productionrecords
indicatethat18,000unitsweretransferredout,and2,000unitsinendingworkin
processwere60%completeintermsofconversioncostsand100%completeinterms
ofmaterials.Prepareacostreconciliationschedule.

Calculate BE410ThesmeltingdepartmentofMassaroManufacturingCompanyhasthefollowing
equivalent
productionandcostdataforNovember.
unitsof
production.
Production:2,000unitsinbeginningworkinprocessthatare100%completeinterms
ofmaterialsand20%completeintermsofconversioncosts;8,000unitstransferredout;
and5,000unitsinendingworkinprocessthatare100%completeintermsofmaterials
and40%completeintermsofconversioncosts.
Calculatetheequivalentunitsofproductionfor(a)materialsand(b)conversioncostsfor
themonthofNovember.

Assign
*BE411MoraCompanyhasthefollowingproductiondataforMarch:nobeginningworkin
coststo
process,30,000unitsstartedandcompleted,and5,000unitsinendingworkinprocess
units
thatare100%completeformaterialsand40%completeforconversioncosts.Morauses
transferred
theFIFOmethodtocalculateequivalentunits.Ifunitmaterialscostis$8andunit
outandin
conversioncostis$12,determinethecoststobeassignedtotheunitstransferredoutand

process.
theunitsinendingworkinprocess.Thetotalcoststobeassignedare$664,000.
Preparea *BE412UsingthedatainBE411,preparethecostsectionoftheproductioncostreportforMora
partial
Company.
productio
ncost
report.

SOLUTIONS TO BRIEF EXERCISES


BRIEF EXERCISE 4-1
Mar. 31
75,000
31
80,000

Raw Materials Inventory...................................


Accounts Payable.....................................

75,000

Factory Labour..................................................
Wages Payable..........................................

80,000

BRIEF EXERCISE 4-2


a)Mar.31 Work in ProcessAssembly Department......
Work in ProcessFinishing Department.......
Raw Materials Inventory...........................
75,000

64,000
11,000

b) Mar. 31Work in ProcessAssembly Department.......


Work in ProcessFinishing Department.......
Factory Labour..........................................
80,000

45,000
35,000

BRIEF EXERCISE 4-3


Mar. 31

Work in ProcessAssembly Department......


($45,000 200%)
Work in ProcessFinishing Department.......

90,000
70,000

160,000

($35,000 200%)
Manufacturing Overhead..........................

BRIEF EXERCISE 4-4


Beginning work in process
Started into production
Total units
Transferred out
Ending work in process
Total units

January

40,000
40,000

March

48,000
48,000

July

56,000
56,000

30,000
10,000
40,000

40,000
8,000
48,000

40,000
16,000
56,000

BRIEF EXERCISE 4-5


January
March
July
1

Materials
40,000 (30,000 + 10,000)
48,000 (40,000 + 8,000)
56,000 (40,000 + 16,000)

Conversion Costs
34,000 (30,000 + 4,000)1
46,000 (40,000 + 6,000)2
44,000 (40,000 + 4,000)3

40% 10,000 units, 2 75% 8,000 units, 3 25% 16,000 units

BRIEF EXERCISE 4-6


Units in beginning WIP + units started = units transferred out + ending
WIP
2,000 + 9,000 = units transferred out + 3,000
Units completed and transferred out = 8,000
BRIEF EXERCISE 4-7
Assignment of Costs

Equivalent Units

Unit Cost

Transferred out

40,000

$13.00

Work in process,
Materials
Conversion costs
Total costs

5,000
2,0001

$4.00
$9.00

40% 5,000 units

$520,000
$20,000
18,000

38,000
$558,000

*BRIEF EXERCISE 4-8

Equivalent Units
Physical
Materials
Units Weighted
FIFO
Av. (a)
(b)
Units completed & transferred 180,000
Units in ending inventory
20,000
Units accounted for
200,000
Complete beginning units:
30,000 0%; 0%*
Units completed & transferred
Work in process, ending
20,000 100%
Total equivalent units

N/A
180,000

0
180,000

20,000

20,000

200,000

200,000

*Direct materials are added at the beginning of the process

BRIEF EXERCISE 4-9


Per unit cost for materials: $15,000 20,000 units = $0.75
Per unit for conversion costs: ($29,500 + $18,000) 19,000 units =
$2.50
Total per unit cost: $0.75 + $2.50 = $3.25
Costs accounted for
Transferred out
Work in process, June 30
Materials
Conversion costs
Total costs
1

(18,000 $3.25)
(2,000 $0.75)
(1,2001 $2.50)

2,000 60% = Equivalent units for conversion costs

$58,500
$1,500
3,000

4,500
$63,000

BRIEF EXERCISE 4-10

a)Materials

Units transferred out


Work in process, November 30
Materials (5,000 100%)
Conversion costs (5,000 40%)
Total equivalent units

8,000

b)Conversion
Costs
8,000

5,000

2,000
10,000

13,000

*BRIEF EXERCISE 4-11


Costs to Be
Assigned Assignment of Costs
Transferred out
Started and
completed

$664,000

Work in process, 3/31


Materials
Conversion costs

40% 5,000 units

Equivalent
Units

Unit
Cost

Total Costs
Assigned

30,000

$20.00

$600,000

5,000
2,0001

$8.00
$12.00

$40,000
24,000

64,000
$664,000

*BRIEF EXERCISE 4-12

Units accounted for


Completed and transferred out
Work in process, March 1
Started and completed
Work in process, March 31
Total units

Equivalent Units
Conversion
Materials
Costs
-030,000
5,000
35,000

-030,000
2,000
32,000

MORA COMPANY
(Partial) Production Cost Report
For the Month Ended March 31
COSTS
Materials
Unit costs
Costs in March (a)
Equivalent units (b)
Unit costs (a) (b)
Costs to be accounted for
In process, March 1
Costs in March
Total costs:
Costs accounted for
Transferred out
In process, March 1
Started and completed
(30,000 units $20.00)
In process, March 31
Materials (5,000 $8.00)
Conversion costs
(2,000 $12.00)
Total costs:

$280,0001
35,000
$8.00

Conversion
Costs
$384,0002
32,000
$12.00

Total
$664,000
$20.00
$
0
664,000
$664,000
$

0
600,000

$40,000
24,000

64,000
$664,000

35,000 equivalent units $8.00 per unit


32,000 equivalent units $12.00 per unit

1
2

DoIt!Review
Compar D413Instructions
ejob
Indicatewhethereachofthefollowingstatementsistrueorfalse.
order
(a)Manyhospitalsusejobordercostingforsmall,routinemedicalprocedures.
and
(b)Amanufacturerofcomputerflashdriveswoulduseajobordercostsystem.
process
(c)Aprocesscostsystemusesmultipleworkinprocessaccounts.
cost
(d)Aprocesscostsystemkeepstrackofcostsonjobcostsheets.
systems.

Assignand D414YussuffCompanymanufacturesCH21throughtwoprocesses:mixingandpackaging.
journalize
InJuly,thefollowingcostswereincurred.
manufacturin

Mixing
Packaging
gcosts.
Rawmaterialsused
$10,000
$24,000
Factorylabourcosts
Manufacturingoverheadcosts

8,000

36,000

12,000

54,000

Unitscompletedatacostof$21,000inthemixingdepartmentaretransferredtothe
packagingdepartment.Unitscompletedatacostof$102,000inthepackaging
departmentaretransferredtoFinishedGoods.

Instructions

Journalizetheassignmentofthesecoststothetwoprocessesandthetransferofunitsas
appropriate.

Calculate
equivalent
units.

D415Theassemblydepartmenthasthefollowingproductionandcostdataforthecurrent
month.
BeginningWorkinProcess

UnitsTransferredOut

EndingWorkinProcess

20,000

16,000

Materialsareenteredatthebeginningoftheprocess.Theendingworkinprocessunits
are70%completeastoconversioncosts.

Instructions

Calculatetheequivalentunitsofproductionfor(a)materialsand(b)conversioncosts.
Preparecost D416InMarch,LassoManufacturinghadthefollowingunitproductioncosts:materials$10
reconciliatio
andconversioncosts$8.OnMarch1,ithadzeroworkinprocess.DuringMarch,Lasso
nschedule.
transferredout22,000units.AsofMarch31,2,000unitsthatwere40%completeasto
conversioncostsand100%completeastomaterialswereinendingworkinprocess.

Instructions

(a)Calculatethetotalunitstobeaccountedfor.

(b)Calculatetheequivalentunitsofproduction.
(c)Prepareacostreconciliationschedule,includingthecostsofmaterialstransferredout
andthecostsofmaterialsinprocess.

SOLUTIONS TO DO IT! REVIEW


DO IT! REVIEW 4-13
(a) False. Process costing is normally used when there are a large
number of homogeneous products or services.
(b) False. Same as (a)
(c) True.
(d) False. A process cost system uses a cost report to determine
total cost and per unit cost.
DO IT! REVIEW 4-14
Work in ProcessMixing Department ............................
Work in ProcessPackaging Department ......................
Raw Materials Inventory...................................
34,000

10,000
24,000

Work in ProcessMixing Department.............................


Work in ProcessPackaging Department.......................
Factory Labour..................................................
44,000

8,000
36,000

Work in ProcessMixing Department.............................


Work in ProcessPackaging Department.......................
Manufacturing Overhead..................................
66,000

12,000
54,000

Work in ProcessPackaging Department.......................


Work in ProcessMixing Department............
21,000

21,000

Finished Goods Inventory.................................................


Work in ProcessPackaging Department.....
102,000

102,000

DO IT! REVIEW 4-15

Completed and transferred out


Started and completed
Work in process, ending
Total equivalent units
1
70% 16,000 units

DO IT! REVIEW 4-16

(a) Units to be accounted for:


Units in beginning inventory
Units started into production

(b) Units completed & transferred


Units in ending inventory
Equivalent units of prod.

Equivalent Units
b)Conversion
a)Materials
Costs
20,000
16,000
36,000

Physical
Units

20,000
11,2001
31,200

Equivalent Units
Material Conversion

24,000
24,000
22,000
2,000
24,000

22,000
2,000
24,000

22,000
8001
22,800

40% 2,000 unitsDO IT! REVIEW 4-16 (Continued)

(c)

LASSO MANUFACTURING
(Partial) Production Cost Report
For the Month Ended March 31

COSTS
Unit costs
Costs in March (a)
Equivalent units (b)
Unit costs (a) (b)
Costs to be accounted for
In process, March 1
Costs in March
Total costs:
Costs accounted for
Transferred out
In process, March 1
Started and completed
(22,000 units $18.00)
In process, March 31
Materials (2,000 $10.00)
Conversion costs
(800 $8.00)
Total costs:

Materials

Conversion
Costs

$240,000
24,000
$10.00

$182,400
22,800
$8.00

Total
$422,400
$18.00
$
0
422,400
$422,400
$

0
396,000

$20,000
6,400

26,400
$422,400

Exercises
Understan E417WojtekNakowskihaspreparedthefollowinglistofstatementsaboutprocesscost
dprocess
accounting.
cost
accounting
1. Processcostsystemsareusedtoapplycoststosimilarproductsthataremass
.
producedinacontinuousfashion.
2. Aprocesscostsystemisusedwheneachfinishedunitisindistinguishablefrom
another.
3. Companiesthatproducesoftdrinks,motionpictures,andcomputerchipswouldall
useprocesscostaccounting.
4. Inaprocesscostsystem,costsaretrackedbyindividualjobs.
5. Jobordercostingandprocesscostingtrackdifferentmanufacturingcostelements.
6. Bothjobordercostingandprocesscostingaccountfordirectmaterials,direct
labour,andmanufacturingoverhead.
7. Costsflowthroughtheaccountsinthesamebasicwayforbothjobordercosting
andprocesscosting.
8. Inaprocesscostsystem,onlyoneworkinprocessaccountisused.
9. Inaprocesscostsystem,costsaresummarizedinajobcostsheet.
10. Inaprocesscostsystem,theunitcostistotalmanufacturingcostsfortheperiod
dividedbytheunitsproducedduringtheperiod.

Instructions
Identifyeachstatementastrueorfalse.Iffalse,indicatehowtocorrectthestatement.

Journalize E418FernandoCompanymanufacturespizzasaucethroughtwoproductiondepartments:
transactions.
cookingandcanning.Ineachprocess,materialsandconversioncostsareincurredevenly
throughouttheprocess.ForthemonthofApril,theworkinprocessaccountsshowthe
followingdebits:

Cooking

Canning

Beginningworkinprocess

$0

$4,000

Materials

25,000

8,000

8,500

7,000

29,000

25,800

55,000

Labour
Overhead
Coststransferredin

Instructions
JournalizetheApriltransactions.

Answer
E419TheledgerofMagdyCompanyhasthefollowingworkinprocessaccount:
questionson
WorkinProcessPainting
costsand
5/1
Balance
$3,570 5/31
Transferredout
production.

$?

5/31

Materials

6,460

5/31

Labour

2,400

5/31

Overhead

1,626

5/31

Balance

$?

Productionrecordsshowthattherewere400unitsinthebeginninginventory,30%
complete,1,200unitsstarted,and1,200unitstransferredout.Thebeginningworkin
processhadmaterialscostof$2,020andconversioncostsof$1,550.Theunitsinending
inventorywere40%complete.Materialsareenteredatthebeginningofthepainting
process.

Instructions

Answerthefollowingquestions:
(a)HowmanyunitsareinprocessatMay31?
(b)WhatistheunitmaterialscostforMay?
(c)WhatistheunitconversioncostforMay?
(d)WhatisthetotalcostofunitstransferredoutinMay?
(e)WhatisthecostoftheMay31inventory?

Journalize E420DouglasManufacturingCompanyhastwoproductiondepartments:cuttingandassembly.
transactions
July1inventoriesareRawMaterials$6,200,WorkinProcessCutting$4,900,Workin
fortwo
ProcessAssembly$12,600,andFinishedGoods$35,000.DuringJuly,thefollowing
processes.
transactionsoccurred:
1.

2.

3.

4.

5.

Purchased$65,500ofrawmaterialsonaccount.
Incurred$47,000offactorylabour(CreditWagesPayable).
Incurred$75,000ofmanufacturingoverhead;$55,000waspaidandtheremainder
isunpaid.
Requisitioned$14,700inmaterialsforcuttingand$11,900inmaterialsfor
assembly.
Usedfactorylabourof$27,000forcuttingand$19,000forassembly.


6.

7.

8.

9.

Appliedoverheadattherateof$22permachinehour.Machinehourswere1,700in
cuttingand1,650inassembly.
Transferredgoodscosting$70,700fromthecuttingdepartmenttotheassembly
department.
Transferredgoodscosting$140,000fromAssemblytoFinishedGoods.
Soldgoodscosting$165,000for$210,000onaccount.

Instructions

Journalizethetransactions.(Omitexplanations.)

Calculate E421InLeeWenCompany,materialsareenteredatthebeginningofeachprocess.Workin
physical
processinventories,withthepercentageofworkdoneonconversioncosts,andproduction
unitsand
dataforitssterilizingdepartmentinselectedmonthsduring2012areasfollows:
equivalent
BeginningWorkin
unitsof

Process

EndingWorkinProcess
production.
Month
Units ConversionCost
UnitsTransferred
Units ConversionCost
%
Out
%
January

9,000

2,000

60

March

12,000

4,000

30

May

14,000

6,000

80

July

10,000

1,500

20

Instructions

(a)CalculatethephysicalunitsforJanuaryandMay.
(b)Calculatetheequivalentunitsofproductionfor(1)materialsand(2)conversioncosts
foreachmonth.

Determine E422ThecuttingdepartmentofGronemanManufacturinghasthefollowingproductionandcost
equivalent
dataforJuly.

unitsand
unitcosts
andassign
costs.

Production

Costs

1.

Transferredout9,000units.

Beginningworkin
process

$0

2.

Started1,000unitsthatare30%completeintermsof
conversioncostsand100%completeintermsof
materialsatJuly31.

Materials

45,000

Labour

16,200

Manufacturing
overhead

17,280

Materialsareenteredatthebeginningoftheprocess.Conversioncostsareincurred
uniformlyduringtheprocess.

Instructions

(a)Determinetheequivalentunitsofproductionfor(1)materialsand(2)conversioncosts.
(b)Calculateunitcostsandprepareacostreconciliationschedule.

Preparea E423ThesandingdepartmentofHanninenFurnitureCompanyhasthefollowingproductionand
production
manufacturingcostdataforMarch2012,thefirstmonthofoperation.
cost
report.
Production:11,000unitsfinishedandtransferredout;4,000unitsstartedthatare100%
completeintermsofmaterialsand25%completeintermsofconversioncosts.
Manufacturingcosts:materials$48,000;labour$42,000;overhead$36,000.

Instructions

Prepareaproductioncostreport.

Determine *E424MontrealManufacturingInc.hasthefollowingcostandproductiondataforthemonthof
equivalent
April.
unitsusing
BeginningWIP
18,000units
FIFO,unit
Startedinproduction
100,000
costs,and
assignmen
Completedproduction
94,000
tofcosts.
EndingWIP
24,000
Thebeginninginventorywas60%completeforconversioncosts.Theendinginventory
was40%completeforconversioncosts.Materialsareaddedatthebeginningofprocess.
CostspertainingtothemonthofAprilareasfollows:
Beginninginventorycostsare
Materials

$65,000

Directlabour

20,000

Factoryoverhead

15,000

CostsincurredduringAprilinclude

Materials

$550,000

Directlabour

195,000

Factoryoverhead

380,000

Instructions
(a)Calculatetheequivalentunitsofproductionfor(1)materialsand(2)conversioncosts
forthemonthofAprilusingthefirstin,firstout(FIFO)method.
(b)Calculatetheunitcostsforthemonth.
(c)Determinethecoststobeassignedtotheunitstransferredoutandinendingworkin
process.

Determine E425TorontoManufacturingInc.hasthefollowingcostandproductiondataforthemonthof
equivalent
November.
units,unit
BeginningWIP
18,000units
costs,and
Startedinproduction
100,000
assignmen
tofcosts.
Completedproduction
94,000
EndingWIP

24,000

Theendinginventorywas40%completeforconversioncosts.Materialsareaddedatthe
beginningofprocess.
CostspertainingtothemonthofNovemberareasfollows:
Beginninginventorycostsare
Materials

$65,000

Directlabour

20,000

Factoryoverhead

15,000

CostsincurredduringNovemberinclude
Materials

$550,000

Directlabour

195,000

Factoryoverhead

380,000

Instructions

(a)Calculateequivalentunitsofproductionformaterialsandforconversioncosts.
(b)Determinetheunitcostsofproduction.
(c)Showtheassignmentofcoststounitstransferredoutandinprocess.

Calculate E426ThepolishingdepartmentofLacroixManufacturingCompanyhasthefollowingproduction
equivalent
andmanufacturingcostdataforSeptember.Materialsareenteredatthebeginningofthe
units,unit
process.
costs,and
costs
Production:Beginninginventoryof2,500unitsthatare100%completeintermsof
assigned.
materialsand30%completeintermsofconversioncosts;unitsstartedduringtheperiod
are12,000;endinginventoryof3,000units10%completeintermsofconversioncosts.
Manufacturingcosts:Beginninginventorycosts,comprising$25,000ofmaterialsand
$28,080ofconversioncosts;materialscostsaddedinpolishingduringthemonth,
$120,725;labourandoverheadappliedinpolishingduringthemonth,$100,020and
$300,240,respectively.

Instructions

(a)Calculatetheequivalentunitsofproductionformaterialsandconversioncostsforthe
monthofSeptember.
(b)Calculatetheunitcostsformaterialsandconversioncostsforthemonth.
(c)Determinethecoststobeassignedtotheunitstransferredoutandinprocess.
Explain E427WilburKumarhasrecentlybeenpromotedtoproductionmanagerandhasjuststartedto
the
receivevariousmanagerialreports.Oneofthereportshehasreceivedistheproductioncost
production
reportthatyouprepared.Itshowedthathisdepartmenthad2,000equivalentunitsinending
costreport.
inventory.Hisdepartmenthashadahistoryofnotkeepingenoughinventoryonhandto
meetdemand.Hehascometoyou,veryangry,andwantstoknowwhyyoucreditedhim
withonly2,000unitswhenheknowshehadatleasttwicethatmanyonhand.

Instructions

ExplaintoWilburwhyhisproductioncostreportshowedonly2,000equivalentunitsin
endinginventory.Writeaninformalmemo.Bekindandexplainveryclearlywhyheis
mistaken.

Preparea E428TheweldingdepartmentofBaloghManufacturingCompanyhasthefollowingproduction
production
andmanufacturingcostdataforFebruary2012.Allmaterialsareaddedatthebeginningof
costreport.
theprocess.
ManufacturingCosts

ProductionData

Beginningworkin
process
Materials

$30,000

Conversioncosts

4,175

Beginningworkin
process

$34,175 Unitstransferredout
146,400 Unitsstarted

24,000units
1/10
complete
54,000

Materials

60,000

Labour

32,780 Endingworkinprocess

30,000units

Overhead

53,045

1/5complete

Instructions

PrepareaproductioncostreportfortheweldingdepartmentforthemonthofFebruary.

Calculate E429ContainerShipping,Inc.iscontemplatingtheuseofprocesscostingtotrackthecostsofits
physical
operations.Theoperationconsistsofthreesegments(departments):receiving,shipping,and
unitsand
delivery.ContainersarereceivedatContainerShipping'sdocksandsortedaccordingtothe
equivalent
shiptheywillbecarriedon.Thecontainersareloadedontoaship,whichcarriesthemtothe
unitsof
appropriateportofdestination.Thecontainersarethenoffloadedanddeliveredtothe
production.
receivingcompany.
ContainerShippingwantstobeginusingprocesscostingintheshippingdepartment.Direct
materialsrepresentthefuelcoststoruntheship,andContainersintransitrepresentswork
inprocess.Listedbelowisinformationabouttheshippingdepartment'sfirstmonthof
activity.
Containersintransit,April1

Containersloaded

900

Containersintransit,April
30

400(40%ofdirectmaterialsand30%ofconversion
costs)

Instructions
(a)Determinethephysicalflowofcontainersforthemonth.
(b)Calculatetheequivalentunitsfordirectmaterialsandconversioncosts.

Determine E430HiTechMortgageCompanyusesaprocesscostingsystemtoaccumulatecostsinitsloan
equivalent
applicationdepartment.Whenanapplicationiscompleted,itisforwardedtotheloan
units,unit
departmentforfinalprocessing.Thefollowingprocessingandcostdatapertainto
costs,and
September:
assignmen
1. Applicationsinprocesson
Beginningworkin

tofcosts.
process:

September1,100

2. Applicationsstartedin

September,1,000

Direct
materials
Conversion
costs

$1,000
4,000

Septembercosts:

3. Completedapplicationsduring

Direct
materials

$4,500

Directlabour

12,000

September,900

4. ApplicationsstillinprocessatSeptember30were
100%completeintermsofmaterials(forms)and
60%completeintermsofconversioncosts.

Overhead

8,480

Materialsaretheformsusedintheapplicationprocess,andthesecostsareincurredatthe
beginningoftheprocess.Conversioncostsareincurreduniformlyduringtheprocess.

Instructions

(a)Determinetheequivalentunitsofservice(production)formaterialsandconversion
costs.
(b)Calculatetheunitcostsandprepareacostreconciliationschedule.
Calculate *E431UsingthedatainE431,assumeHiTechMortgageCompanyusestheFIFOmethod.Also
equivalent
assumethattheapplicationsinprocessonSeptember1were100%completeintermsof
units,unit
materials(forms)and40%completeintermsofconversioncosts.
costs,and
Instructions
costs
(a)Determinetheequivalentunitsofservice(production)formaterialsandconversion
assigned.
costs.
(b)Calculatetheunitcostsandprepareacostreconciliationschedule.

Determine *E432ThecuttingdepartmentofChanManufacturinghasthefollowingproductionandcostdata
equivalent
forAugust.
units,unit
Production
Costs
costs,and
1.Startedandcompleted8,000units.
Beginningworkin
$0
assignmen
process
tofcosts.
2.Started1,000unitsthatare60%completedat
August31.

Materials

54,000

Labour

17,000

Manufacturingoverhead

26,000

Materialsareenteredatthebeginningoftheprocess.Conversioncostsareincurred
uniformlyduringtheprocess.ChanManufacturingusestheFIFOmethodtocalculate
equivalentunits.

Instructions

(a)Determinetheequivalentunitsofproductionfor(1)materialsand(2)conversion
costs.
(b)Calculateunitcostsandshowtheassignmentofmanufacturingcoststounits
transferredoutandinworkinprocess.

Calculate *E433ThesmeltingdepartmentofAmberManufacturingCompanyhasthefollowingproduction
equivalent
andcostdataforSeptember.
units,unit
costs,and
Production:Beginningworkinprocessof2,000unitsthatare100%completeintermsof
costs
materialsand20%completeintermsofconversioncosts;8,000unitsstartedand
assigned.
finished;and1,000unitsinendingworkinprocessthatare100%completeintermsof
materialsand40%completeintermsofconversioncosts.
Manufacturingcosts:Workinprocess,September1,$15,200;materialsadded,$63,000;
labourandoverhead,$143,000.
AmberusestheFIFOmethodtocalculateequivalentunits.

Instructions

(a)Calculatetheequivalentunitsofproductionfor(1)materialsand(2)conversioncosts
forthemonthofSeptember.
(b)Calculatetheunitcostsforthemonth.
(c)Determinethecoststobeassignedtotheunitstransferredoutandinprocess.

Answer *E434TheledgerofPlattCompanyhasthefollowingworkinprocessaccount:
questions
WorkinProcessPainting
oncosts
3/1
Balance
$3,080 3/31
Transferredout
and
production.
3/31
Materials
6,600

$?

3/31

Labour

2,230

3/31

Overhead

1,280

3/31

Balance

Productionrecordsshowthattherewere900unitsinthebeginninginventory,30%
complete,1,200unitsstarted,and1,300unitstransferredout.Theunitsinending
inventorywere40%complete.Materialsareenteredatthebeginningofthepainting
process.PlattusestheFIFOmethodtocalculateequivalentunits.

Instructions

Answerthefollowingquestions:
(a)HowmanyunitsareinprocessatMarch31?
(b)WhatistheunitmaterialscostforMarch?
(c)WhatistheunitconversioncostforMarch?
(d)WhatisthetotalcostofunitsstartedinFebruaryandcompletedinMarch?
(e)WhatisthetotalcostofunitsstartedandfinishedinMarch?
(f)WhatisthecostoftheMarch31inventory?

Preparea *E435TheweldingdepartmentofHirohamaManufacturingCompanyhasthefollowing
production
productionandmanufacturingcostdataforFebruary2012.Allmaterialsareaddedatthe
costreport
beginningoftheprocess.HirohamausestheFIFOmethodtocalculateequivalentunits.
fora
ManufacturingCosts
ProductionData
second
Beginningworkin
$23,600 Beginningworkin
10,000units,10%
process.
process
process
complete
Coststransferredin

135,000

Materials

57,000

Unitstransferredout

65,000

Labour

35,100

Unitstransferredin

80,000

Overhead

68,400

Endingworkinprocess

25,000,20%complete

Instructions
PrepareaproductioncostreportfortheweldingdepartmentforthemonthofFebruary.
Transferredincostsareconsideredmaterialscosts.

EXERCISE 4-17

SOLUTIONS TO EXERCISES

1. True.
2. True.
3. False. Companies that produce soft drinks and computer chips
would all use process cost accounting, but companies producing
motion pictures would use job-order costing since the motion
pictures are not homogeneous.

4. False. In a job-order cost system, costs are tracked by individual


jobs.
5. False. Job-order costing and process costing track the same three
manufacturing cost elements.
6. True.
7. True.
8. False. In a process cost system, multiple work in process
accounts by department are used.
9. False. In a process cost system, costs are summarized in a
production cost report for each department.
10. False. In a process cost system, the unit cost of production is the
sum of two unit costs: materials costs divided by the equivalent
units of production for materials, and conversion costs divided
by the equivalent units of production for conversion.
EXERCISE 4-18
April 30

Work in ProcessCooking................................
Work in ProcessCanning................................
Raw Materials Inventory.............................
33,000

25,000
8,000

30

8,500
7,000

30

29,000
25,800

30

55,000

Work in ProcessCooking................................
Work in ProcessCanning................................
Factory Labour............................................
15,500
Work in ProcessCooking................................
Work in ProcessCanning................................
Manufacturing Overhead............................
54,800
Work in ProcessCanning................................
Work in ProcessCooking........................
55,000

EXERCISE 4-19
(a) Work in process, May 1
Started into production
Total units to be accounted for
Less: Transferred out
Work in process, May 31
(b)
Units transferred out
Work in process, May 31
400 100%
400 40%

Work in process, May 1


Costs added
Total materials cost

400
1,200
1,600
1,200
400
Equivalent Units
Materials
Conversion Costs
1,200
1,200
400
1,600

160
1,360

Direct
Materials
$2,020
6,460
$8,480

Conversion Costs
$1,550
4,026
$5,576

$8,480 1,600 = $5.30


(c) $5,576 1,360 = $4.10
(d) Transferred out: 1,200 ($5.30 + $4.10) = $11,280;
Per unit cost = $5.30 + $4.10 is calculated in (b) and (c)
(e) Work in process, May 31
Materials (400 $5.30)
Conversion costs (160 $4.10)

$2,120
656
$2,776

EXERCISE 4-20
1.

Raw Materials Inventory...........................................


Accounts Payable.............................................
65,500

65,500

2.

Factory Labour..........................................................
Wages Payable..................................................
47,000

47,000

3.

75,000

Manufacturing Overhead..........................................
Cash...................................................................
55,000
Accounts Payable.............................................
20,000
4.

Work in ProcessCutting........................................ 14,700


Work in ProcessAssembly................................... 11,900
Raw Materials Inventory...................................
26,600
5.

Work in ProcessCutting........................................
Work in ProcessAssembly...................................
Factory Labour..................................................
46,000

27,000
19,000

6.

Work in ProcessCutting (1,700 $22).................


Work in ProcessAssembly (1,650 $22).............
Manufacturing Overhead..................................
73,700

37,400
36,300

7.

Work in ProcessAssembly...................................
Work in ProcessCutting................................
70,700

70,700

8.

Finished Goods Inventory........................................


Work in ProcessAssembly............................
140,000

140,000

9.

Cost of Goods Sold..................................................

165,000

Finished Goods Inventory................................


165,000
Accounts Receivable................................................
Sales...................................................................
210,000

210,000

EXERCISE 4-21
(a)

Units to be accounted for


Beginning work in process
Started into production
Total units
Units accounted for
Transferred out
Ending work in process
Total units
(1)

May

0
11,000
11,000

0
20,000
20,000

9,000
2,000
11,000

14,000
6,000
20,000

Equivalent Units of
Production
Materials

(b)
January
March
May
July

Jan.

(2)

11,000 (9,000 + 2,000)


16,000 (12,000 + 4,000)
20,000 (14,000 + 6,000)
11,500 (10,000 + 1,500)

2,000 60%

4,000 30%

Equivalent Units of
Production
Conversion Costs
10,200 (9,000 + 1,2001)
13,200 (12,000 + 1,2002)
18,800 (14,000 + 4,8003)
10,300 (10,000 + 3004)

6,000 80%

1,500 20%

EXERCISE 4-22
(a)

Materials

Conversion Costs

9,000

9,000

Units transferred out


Work in process, July 31
1,000 100%
1,000 30%
Total equivalent units

1,000

300
9,300

10,000

(b) Materials:$45,000 10,000 = $4.50

Conversion costs:($16,200 + $17,280) 9,300 = $3.60

Costs accounted for


Transferred out (9,000 $8.10)
Work in process, July 31
Materials (1,000 $4.50)
Conversion costs (300 $3.60)
Total costs

(Total costs: $45,000 + $16,200 + $17,280 = $78,480)

EXERCISE 4-23

$72,900
$4,500
1,080

5,580
$78,480

HANNINEN FURNITURE COMPANY


Sanding Department
Production Cost Report
For the Month Ended March 31, 2012
Equivalent Units
Quantities

Physical
Units

Units to be accounted for


Work in process, March 1
Started into production
Total units

0
15,000
15,000

Units accounted for


Transferred out
Work in process, March 31
Total units

11,000
4,000
15,000

Costs
Unit costs
Costs in March
Equivalent units
Unit costs (a) (b)
Costs to be accounted for
Work in process, March 1
Started into production
Total costs

Materials

Conversion
Costs

11,000
4,000
15,000

11,000
1,000
12,000

Conversion
Material
Costs
s
$48,000
15,000
$3.20

$78,000

12,000
$6.50

Total

$126,00
0
$9.70
$
0
126,00
0
$126,00
0

(4,000 25%)

Cost Reconciliation Schedule


Costs accounted for
Transferred out (11,000 $9.70)
Work in process, March 31
Materials (4,000 $3.20)
Conversion costs (1,000 $6.50)
Total costs

($42,000 + $36,000)

$106,70
0
$12,800
6,500
19,300
$126,00
0

*EXERCISE 4-24
(a) Quantities

Equivalent Units
Physical
ConUnits
Material version

Units to be accounted for


Work in process, beginning
Started this period
Total units

18,000
100,000
118,000

Units accounted for


Work in process, beginning
Materials (0%)
Conversion (40%)
Started and completed
Work In process, ending
Materials (100%)
Conversion (40%)
Total equivalent units
Current period costs

(b) Per equivalent unit cost

Total costs:
Work in Process, beginning
Costs added during the month
Total costs to be allocated

18,000
0
76,000
24,000

76,000

7,200
76,000

24,000
118,000

100,000

9,600
92,800

$1,125,000 $550,000 $575,000

$5.500

$ 100,000
1,125,000
$1,225,000

$6.196

$11.696

*EXERCISE 4-24 (Continued)


(c) Costs for completed goods and ending work in process
(Some amounts have been rounded.)

Beginning Inventory

Total
$100,000

Complete beginning WIP


Materials (0 $5.500)
Conversion (7,200 $6.196)

44,610

Started and completed


Materials (76,000 $5.500)
Conversion (76,000 $6.196)
Cost for units transferred out

888,900

Ending work in process


Materials (24,000 $5.500)
Conversion (9,600 $6.196)
Total costs

Material
$65,000

Conversi
on
$35,000

0
44,610

418,000
$1,033,510 $483,000

470,900
$550,510

191,490
132,000
$1,225,000 $615,000

59,490
$610,000

EXERCISE 4-25
(a)
Units transferred out
Work in process, ending
24,000 100%
24,000 40%
Equivalent units of production
(b)
Costs during the month
Equivalent units
Unit costs

Materials
94,000
24,000
118,000

Materials
$615,0001
118,000
$5.212

Conversion
Costs
94,000
9,600
103,600

Conversion
Costs
$610,0002
103,600
$5.888

$65,000 + $550,000
$35,000 + $575,000
1

(c) Transferred out (94,000 $11.10)


Work in process
Materials (24,000 $5.212)
Conversion costs (9,600 $5.888)
Total costs
Some numbers have been rounded.

Total
$1,225,000
$11.10
2

$1,043,400
$125,100
56,500

181,600
$1,225,000

EXERCISE 4-26
(a)

Physical
Units
2,500
12,000
14,500

Work in process, September 1


Units started into production
Units transferred out
Work in process, September 30

Units transferred out


Work in process
3,000 100%
3,000 10%

11,500
3,000
14,500
Equivalent Units
Materials
Conversion Costs
11,500
11,500

(b)

3,000
14,500
Materials

Work in process, September 1


Direct materials
Conversion costs
Costs added to production in polishing
during September
Material costs
Conversion costs
($100,020 + $300,240)
Total cost

300
11,800
Conversion
Costs

$25,000

$28,080

120,725
$145,725

400,260
$428,340

$145,725 14,500 = $10.05 (Material costs per equivalent unit)


$428,340 11,800 = $36.30 (Conversion costs per equivalent unit)
$10.05 + $36.30 = $46.35 cost per unit

(c) Costs accounted for


Transferred out (11,500 $46.35)
$533,025
Work in process, September 30
Materials (3,000 $10.05)
Conversion costs (300 $36.30)
Total costs
$574,065
Prove total costs:
Beginning Inventory
Added during the month:
Materials
Conversion costs
Total [as in (c) above]

$30,150
10,890

$ 53,080
120,725
400,260
$574,065

41,040

EXERCISE 4-27
To:
From:
Re:

Stan Maley
Student
Ending inventory

The reason for any confusion related to your departments ending


inventory quantity stems from the fact that the quantity can be measured
in two different ways, depending on what the information is used for.
The ending inventory quantity can be measured in physical units or
equivalent units. Physical units are actual units present without regard
to the stage of completion. Your departments ending inventory in
physical units is at least double the amount reported as equivalent
units.
Equivalent units measure the work done on the physical units,
expressed in terms of fully completed units. Therefore, if your ending
inventory contains 4,000 units which are 50% complete, that is
equivalent to having 2,000 completed units at month end. Therefore, the
ending inventory could be expressed as containing 4,000 physical units
or 2,000 equivalent units. I hope this clears up any
misunderstandings. Please contact me if you have any further
questions.

EXERCISE 4-28

BALOGH MANUFACTURING COMPANY


Welding Department
Production Cost Report
For the Month Ended February 29, 2012
Equivalent Units

Quantities

Physical
Units

Materials

(Step 1)
Units to be accounted for
Work in process, February 1
Started into production
Total units

24,000
60,000
84,000

Units accounted for


Transferred out
Work in process, February 29
Total units

54,000
30,000
84,000

Unit costs (Step 3)


Costs in February
Equivalent units
Unit costs (a) (b)

(Step 2)

54,000
30,000
84,000

Costs

Materials
(a)
(b)

Conversion
Costs

$176,400
84,000
$2.10

54,000
6,000
60,000
Conversion
Costs
$90,000
60,000
$1.50

Costs to be accounted for


Work in process, February 1
Started into production 1
Total costs
1
($146,400 + $32,780 + $53,045)

Total
$266,400
$3.60

$34,175
232,225
$266,400

Cost Reconciliation Schedule (Step 4)


Costs accounted for
Transferred out (54,000 $3.60)
Work in process, February 29
Materials (30,000 $2.10)
Conversion costs (6,000 1.50)
Total costs

$194,400
$63,000
9,000

72,000
$266,400

EXERCISE 4-29
(a)

Containers in transit, April 1


Containers loaded
Total containers

0
900
900

Containers off-loaded1
Containers in transit, April 30
Total containers

500
400
900

Total containers less containers in transit

(b)
Containers off-loaded
Containers in transit, April 30
Total equivalent units
2
400 40% = 160
3
400 30% = 120

Equivalent Units
Physical
Direct
Conversion
Units
Materials
Costs
500
500
500
2
400
160
1203
660
620

EXERCISE 4-30
(a)
Work in process, beginning
Units started into production

Physical
Units
100
1,000
1,100

Units transferred out


Work in process, ending

900
200
1,100
Materials
900
200
1,100

Completed Applications transferred out


Work in process, ending (100%, 60%)
Equivalent units

Conversion
Costs
900
120
1,020

(b)
Costs
Unit costs (Step 3)
Costs in September
Equivalent units
Unit costs (a) (b)

(a)
(b)

Materials

Conversion
Costs

$5,500
1,100
$5.00

$24,480
1,020
$24.00

Costs to be accounted for


Work in process, September 1
Started into production
Total costs

Total
$29,980
$29.00

$5,000
24,980
$29,980

Cost Reconciliation Schedule (Step 4)


Costs accounted for
Transferred out (900 $29.00)
Work in process, September 30
Materials (200 $5.00)
Conversion costs (120 $24.00)
Total costs

$26,100
$1,000
2,880

3,880
$29,980

*EXERCISE 4-31
(a)
Applications completed:
Work in process, September 1
Started and completed
Work in process, September 30
Total units
1

Physical
Units
100
800
200
1,100

Equivalent Units
Conversion
Materials
Costs
0
800
200
1,000

601
800
120
980

40% complete as to conversion costs, thus needs 60% more to complete the units,
60% 100 units = 60 equivalent units

*EXERCISE 4-31 (Continued)


(b) Materials: $4,500 1,000 = $4.50
Conversion costs: ($12,000 + $8,480) 980 = $20.898
Costs to be accounted for:
Work in process, September 1
Costs put into production in September
Total costs
Costs accounted for:
Applications completed:
Work in process, September 1
Conversion costs (60 $20.898)
Started and completed (800 $25.398)
Work in process, September 30:
Materials (200 $4.50)
Conversion costs (120 $20.898)
Total costs

$5,000
24,980
$29,980

$5,000
1,254

$ 6,254
20,318
900
2,508

$26,572
3,408
$29,980

*EXERCISE 4-32
(a) (1) Materials:
Production Data
Work in process, Aug1
Started and completed
Work in process, Aug 31
Total
(2) Conversion Costs:
Production Data
Work in process, Aug 1
Started and completed
Work in process, Aug 31
Total
(b) Unit costs are:
Materials
Conversion costs
Total
1

Materials
Added
This Period
0
100%
100%

Physical
Units
0
8,000
1,000
9,000
Physical
Units
0
8,000
1,000
9,000

$54,000 9,000 =
$43,0001 8,600 =

%
0
100
60

Equivalent
Units
0
8,000
1,000
9,000
Equivalent
Units
0
8,000
600
8,600

$6.00
5.00
$11.00

$17,000 (Labour) + $26,000 (Manufacturing Overhead) = $43,000

Equivale
Costs to Be
nt
Unit
Assigned
Assignment of Costs
Units Cost
Total mfg. Transferred out
costs
Started and completed 8,000 $11
Work in process, 8/31
Materials
Conversion costs
$97,000

1,000
600

$6
$5

Total
Costs
Assigned
$88,000
6,000

3,000

9,000
$97,0002

$54,000 (Materials) + $17,000 (Labour) + $26,000 (Manufacturing


Overhead).

*EXERCISE 4-33
(a) (1)

(2)

Materials
Work in process, beg.
Started and completed
Work in process, end
Total

Physical
Units
2,000
8,000
1,000
14,000

Materials Added
This Period
Q 0%
100%
100%

Equivalent
Units
0
8,000
1,000
9,000

Conversion Costs
Work in process, beg.
Started and completed
Work in process, end
Total

Physical
Units
2,000
8,000
1,000
14,000

Work Added
This Period
80%1
100%
40%

Equivalent
Units
1,600
8,000
400
10,000

20% complete as to conversion costs, thus needs 80% more to


complete the units,

(b) Materials
Conversion costs

(c)

Costs to Be
Assigned
Total mfg. costs

$221,200*

$63,000 9,000 =
$7.00
$143,000 10,000 =
14.30
$21.30

Assignment of Costs

Equivalent
Units

Transferred out
Work in process, beg
Conversion costs
Started and completed
Total costs transferred out
Work in process, end
Materials
Conversion costs
Total costs

Unit
Cost

1,600
8,000

$14.30
$21.30

1,000
400

$7.00
$14.30

Total Costs
Assigned
$15,200
22,880

$7,000
5,720

$38,080
170,400
208,480
12,720
$221,200

*Work in process, September 1, $15,200 + materials costs $63,000 + labour and


overhead costs $143,000 = $221,200.

*EXERCISE 4-34
(a) Work in process, beginning
Started into production
Total units to be accounted for
Less: Transferred out
Work in process, March 31

900
1,200
2,100
1,300
800

(b) Materials:

Physical Materials Added Equivalent


Production Data
Units
This Period
Units
Work in process, March 1
900
0
0
Started and completed
400
100%
400
Work in process, March 31 800
100%
800
Total
2,100
1,200

Unit cost = $6,600 1,200 = $5.50.


(c) Conversion costs:

Physical
Production Data
Units
Work in process, March 1
900
Started and completed
400
Work in process, March 31 800
Total
2,100

Work Added
This Period
70%1
100%
40%

70% to complete the units, 70% 900 units

Equivalent
Units
630
400
320
1,350

Unit cost = $2,230 (Labour) + $1,280 (Overhead) 1,350 = $2.60


(d) In process, March 1...........................................................
Conversion costs in March (630 $2.60)........................
Total cost of units started in Feb & completed in Mar...

$3,080
1,638
$4,718

(e) 400 ($5.50 + $2.60) = $3,240


(f)

Materials (8002 $5.50).....................................................


Conversion costs (800 40% $2.60)............................
Total cost of work in process, March 31.........................

Work in process ending March 31st

$4,400
832
$5,232

*EXERCISE 4-35
HIROHAMA MANUFACTURING COMPANY
Welding Department
Production Cost Report
For the Month Ended February 29, 2012
Equivalent Units

Quantities

Physical
Units

Materials

(Step 1)

(Step 2)

Units to be accounted for


Work in process, February 1
Units transferred in
Total units

10,000
80,000
90,000

Units accounted for


Completed and transferred out
Work in process, February 1
Started and completed2
Total Completed
Work in process, February 29
Total units

10,000
55,000
65,000
25,000
90,000

Costs

Unit costs (Step 3)


Costs in February
Equivalent units
Unit costs (a) (b)
Costs to be accounted for
Work in process, February 1
Costs Transferred in
Started into production
Total costs

Conversion
Costs

(a)
(b)

0
55,000
55,000
25,000
80,000

9,0001
55,000
64,000
5,0003
69,000

Materials

Conversion
Costs

Total

$192,000

$103,500

$295,500

80,000
$2.40

69,000
$1.50

$3.90

$23,600
135,000
160,500
$319,100

*EXERCISE 4-35 (Continued)


Cost Reconciliation Schedule
Costs accounted for (Step 4)
Transferred out
Work in process, February 1
Costs to complete beginning
work in process
Conversion costs
(9,000 $1.50)
Total costs
Units started and completed (55,000 $3.90)
Total costs transferred out
Work in process, February 29
Materials (25,000 $2.40)
Conversion costs (5,000 $1.50)
Total costs

$23,600

13,500

$37,100
214,500
$251,600
60,000
7,500

10% complete as to conversion costs; needs 90% more to complete the units,
90% 10,000 = 9,000 equivalent units
2
80,000 25,000 = 55,000
3
25,000 20% = 5,000
4
Cost of materials added $57,000 plus costs transferred in $135,000.
5
Labour $35,100 plus overhead $68,400.

67,500
$319,100

Problems:SetA
Calculate P436ATorontoTimersInc.'scostingsystemusestwocostcategories:directmaterialsand
equivalen
conversioncosts.Eachofitsproductsmustgothroughtheassemblydepartmentandthe
tunits,
testingdepartment.Directmaterialsareaddedatthebeginningofproduction.Conversion
unit
costsareallocatedevenlythroughoutproduction.Datafortheassemblydepartmentfor
costs,and
June2012areasfollows:
costs
ProductionDataUnits

assigned.
Workinprocess,beginninginventory(60%completeintermsof
850units
conversioncosts)
UnitsstartedduringJune
Workinprocess,endinginventory

1,300
units
450units

CostData

Workinprocess,beginninginventorycosts

Directmaterials

382,500

Conversioncosts

255,000

DirectmaterialscostsaddedduringJune

2,500,000

ConversioncostsaddedduringJune

2,800,000

Instructions
(a)Determinewhatunitcostcanbecalculatedfromtheinformationprovidedforworkin
processbeginninginventory.
(b)Calculatehowmanyunitswerecompletedandtransferredoutoftheassembly
departmentduringJune2012.

Complete P437AKastenCompanymanufacturesbowlingballsthroughtwoprocesses:mouldingand
thefour
packaging.Inthemouldingdepartment,urethane,rubber,plastic,andothermaterialsare
steps
mouldedintobowlingballs.Inthepackagingdepartment,theballsareplacedincartons
necessary
andsenttothefinishedgoodswarehouse.Allmaterialsareenteredatthebeginningof
toprepare
eachprocess.
a
Labourandmanufacturingoverheadareincurreduniformlythroughouteachprocess.
productio
ProductionandcostdataforthemouldingdepartmentduringJune2012arepresented
ncost
below:
report.
ProductionData
June
Beginningworkinprocessunits

Unitsstartedintoproduction

30,000

Endingworkinprocessunits

4,000

Percentcompleteendinginventory

80%

CostData

Materials

$298,000

Labour

60,400

Overhead

150,800

Total

$509,200

Instructions

(a)Prepareascheduleshowingphysicalunitsofproduction.
(b)Determinetheequivalentunitsofproductionformaterialsandconversioncosts.
(c)Calculatetheunitcostsofproduction.
(d)DeterminethecoststobeassignedtotheunitstransferredandinprocessforJune.
(e)PrepareaproductioncostreportforthemouldingdepartmentforthemonthofJune.

Complete P438ASweetCorporationisinthedairymanufacturingbusiness.Productsgothroughtwo
thefour
productiondepartments(Afirst,thenB).DatafromthosedepartmentsforOctober2012
steps
arepresentedbelow.
necessary
DepartmentA
DepartmentB

toprepare

Beginningworkinprocess Beginningworkinprocess
a
productio
Numberofunits
1000
200
ncost
%completeformaterials
100%

report.
%completefortransferredin

100%

60%

30%

Totalmaterialscost

$24,000

Totalconversioncost

$30,000

$40,000

15,000

%completeforconversion

Totaltransferredincosts

DepartmentA

DepartmentB

Endingworkinprocess

Endingworkinprocess

Numberofunits
%completeformaterials
%completefortransferredin
%completeforconversion

600

300

100%

100%

30%

40%

SweetCorporationstarted2,600unitsofproductduringthemonthindepartmentA.Costs
incurredindepartmentAforOctober2012totalled$64,000formaterialand$132,000for
conversion.Additionally,departmentBincurredconversioncostsinSeptember2012of
$600,000.DepartmentBaddsnomaterialstotheproduct.

Instructions

(a)JournalizethetransferofgoodsfromdepartmentAtodepartmentBduringOctober
2012.SweetCorporationaccountsforitscostsusingtheweightedaveragemethod.
(b)PrepareaproductioncostreportfordepartmentBforOctober2012.

Journalize P439AFiedelCompanymanufacturesitsproduct,Vitadrink,throughtwomanufacturing
transactions
processes:mixingandpackaging.Allmaterialsareenteredatthebeginningofeach
.
process.OnOctober1,2012,inventoriesconsistedof$26,000inRawMaterials,$0in
WorkinProcessMixing,$250,000inWorkinProcessPackaging,and$289,000in
FinishedGoods.ThebeginninginventoryforPackagingconsistedof10,000unitsthat
were50%completeintermsofconversioncostsandfullycompleteintermsof
materials.DuringOctober,50,000unitswerestartedintoproductioninthemixing
departmentandthefollowingtransactionswerecompleted:
1.

2.

3.

4.

5.

6.

Purchased$300,000ofrawmaterialsonaccount.

7.

8.

9.

Transferred45,000unitsfrommixingtopackagingatacostof$979,000.

Issuedrawmaterialsforproduction:mixing$210,000andpackaging$45,000.
Incurredlabourcostsof$248,900.
Usedfactorylabour:mixing$182,500andpackaging$66,400.
Incurred$790,000ofmanufacturingoverheadonaccount.
Appliedmanufacturingoverheadonthebasisof$22permachinehour.Machine
hourswere28,000inmixingand6,000inpackaging.

Transferred53,000unitsfrompackagingtoFinishedGoodsatacostof
$1,315,000.
Soldgoodscosting$1,604,000for$2,500,000onaccount.

Instructions
JournalizetheOctobertransactions.

Determine P440AThefollowingispartialinformationforthemonthofMarchforMacmillanInternational
assignment
Inc.,atwodepartmentmanufacturerthatusesprocesscosting:
ofcosts.
Workinprocess,beginning(67%converted)
15,000 units
Costsofbeginningworkinprocess:
TransferredinfromdepartmentA
Materials
Conversion
UnitscompletedandtransferredoutduringMarch
UnitstransferredinduringMarchfromdepartmentA
Workinprocess,ending(37.5%converted)


$9,500
0
11,200
45,000 units
? units
16,000 units

MaterialscostsaddedduringMarch

$13,000

ConversioncostsaddedduringMarch

$63,000

Otherinformation:
1.

2.

3.

MaterialisintroducedatthebeginningindepartmentAandmorematerialis
addedattheveryendindepartmentB.
Conversioncostsareincurredevenlythroughoutbothprocesses.

AstheprocessindepartmentAiscompleted,goodsareimmediatelytransferred
todepartmentB;asgoodsarecompletedindepartmentB,theyaretransferredto
finishedgoods.
4. UnitcostsofproductionindepartmentAinMarchwere
Materials
$0.55

Conversion

0.40

Total

$0.95

5. Thecompanyusestheweightedaveragemethod.

Instructions

(a)CalculatethecostofgoodstransferredoutofdepartmentBinMarch.
(b)CalculatethecostoftheMarchendingworkinprocessinventoryindepartmentB.
(adaptedfromCGACanada)

Assign P441ACavalierCompanyhasseveralprocessingdepartments.Costschargedtotheassembly
costsand
departmentforNovember2012totalled$2,229,000asfollows:
preparea
Workinprocess,November1

productio
Materials
$69,000

ncost
report.
Conversioncosts
48,150
$117,150
Materialsadded

1,548,000

Labour

225,920

Overhead

337,930

Productionrecordsshowthat35,000unitswereinbeginningworkinprocess,30%
completeintermsofconversioncosts,700,000unitswerestartedintoproduction,and
25,000unitswereinendingworkinprocess,40%completeintermsofconversioncosts.
Materialsareenteredatthebeginningofeachprocess.

Instructions

(a)Determinetheequivalentunitsofproductionandtheunitproductioncostsforthe
assemblydepartment.
(b)Determinetheassignmentofcoststogoodstransferredoutandinprocess.
(c)Prepareaproductioncostreportfortheassemblydepartment.

Determine P442AChenCompanymanufacturesbasketballs.Materialsareaddedatthebeginningofthe
equivalent
productionprocessandconversioncostsareincurreduniformly.Productionandcostdata
unitsand
forthemonthofJuly2012areasfollows:
unitcosts
ProductionDataBasketballs
Units
PercentComplete
andassign
Workinprocessunits,July1
500
60%
costs.
Unitsstartedintoproduction

1,000

600

30%

CostDataBasketballs

Workinprocess,July1

$750

600

$1,350

Directmaterials

2,400

Directlabour

1,580

Manufacturingoverhead

1,060

Workinprocessunits,July31

Materials
Conversioncosts

Instructions

(a)Calculatethefollowing:
1.

2.

3.

Theequivalentunitsofproductionformaterialsandconversioncosts
Theunitcostsofproductionformaterialsandconversioncosts
Theassignmentofcoststounitstransferredoutandinprocessattheendofthe
accountingperiod

(b)PrepareaproductioncostreportforthemonthofJulyforthebasketballs.
Calculate P443ALutherProcessingCompanyusesaweightedaverageprocesscostingsystemand
equivalent
manufacturesasingleproductapremiumrugshampooandcleaner.Thecompanyhas
unitsand
justcompletedthemanufacturingactivityforthemonthofOctober.Apartiallycompleted
completea
productioncostreportforthemonthofOctoberforthemixingdepartmentisshown
production
below.
cost

EquivalentUnits
report.
Physical
Conversion
Quantities
Units
Materials
Costs
Unitstobeaccountedfor
Workinprocess,October1(allmaterials,
70%conversioncosts)
Startedintoproduction

20,000

160,000

Physical
Units

Quantities
Totalunits
Unitsaccountedfor
Transferredout
Workinprocess,October31(60%
materials,40%conversioncosts)
Totalunitsaccountedfor
Costs

EquivalentUnits
Materials

Conversion
Costs

180,000

130,000

50,000

180,000

Materials

ConversionCosts

CostsinOctober

$240,000

$105,000

$345,000

Equivalentunits

Unitcosts

Unitcosts
Coststobeaccountedfor

$?

$?

Total

$?

Workinprocess,October1

$30,000

Startedintoproduction

315,000

$345,000

CostReconciliationSchedule

Costsaccountedfor

Transferredout

$?

Workinprocess,October31

Materials

Conversioncosts

Totalcosts

$?

Totalcosts

(a)Prepareaschedulethatshowshowtheequivalentunitswerecalculatedsothatyou
cancompletetheQuantities:Unitsaccountedforequivalentunitssectionofthe
productioncostreport,andcalculateOctoberunitcosts.
Determine P444AAlbertaInstrumentCompanyusesaprocesscostingsystem.Aunitofproductpasses
assignmen
throughthreedepartmentsmoulding,assemblyandfinishingbeforeitiscompleted.
tofcosts.
ThefollowingactivitytookplaceinthefinishingdepartmentduringMay:

Workinprocessinventory,May1
Transferredinfromtheassemblydepartment

Units
1,900
14,000

Units

Transferredouttofinishedgoodsinventory

11,900

Rawmaterialisaddedatthebeginningofprocessinginthefinishingdepartment.The
workinprocessinventorywas70%completeintermsofconversioncostsonMay1and
40%completeintermsofconversioncostsonMay31.AlbertaInstrumentCompanyuses
theweightedaveragemethodofprocesscosting.Theequivalentunitsandcurrentperiod
costsperequivalentunitofproductionforeachcostfactorareasfollowsforthefinishing
department:

EquivalentUnits

CurrentPeriodCostsperEquivalentUnit

Transferredincosts

15,400

$6.00

Rawmaterials

15,400

2.00

Conversioncosts

13,300

4.00

Total

$12.00

Instructions
Calculatethefollowingamounts:
(a)ThecostofunitstransferredtofinishedgoodsinventoryduringMay
(b)Thecostofthefinishingdepartment'sworkinprocessinventoryonMay31
(adaptedfromCMACanada)

Determine *P445ABelowisinformationaboutABCLtd.,achemicalproducer,forthemonthofJune:
equivalent
Workinprocess,beginninginventory
25,000units
unitsusing
Transferredinunits100%complete

FIFO.
Directmaterials0%complete

Conversioncosts80%complete

TransferredinduringJune

175,000units

CompletedandtransferredoutduringJune

170,000units

Workinprocess,endinginventory

?units

Transferredinunits100%complete

Directmaterials0%complete

Conversioncosts40%complete

Instructions

(a)Howmanyunitsareinendingworkinprocessinventory?
(b)UnderFIFO,whataretheequivalentunitsofproductionforthemonthofJunefor
materials?
(c)UnderFIFO,whataretheequivalentunitsofproductionforthemonthofJunefor
conversioncosts?
Determine *P446ATheAllbrightBrickWorks,inWinnipeg,manufactureshighqualitybricksusedin
assignmen
residentialandcommercialconstruction.Thefirmissmallbuthighlyautomatedand
tofcosts
typicallyproducesabout300,000brickspermonth.Abrickiscreatedinacontinuous
using
productionoperation.Intheinitialstep,therawmaterial,amixtureofsoilsandwater,is

FIFO.

forcedintoabrickmouldmovingalongaconveyerbelt.Noothermaterialsareactually
requiredinthemanufactureofabrick.Eachbricktakesaboutthreedaystocomplete.
Theyspendthelast36hoursorsoontheconveyerbeltinanoventhatremovesmoisture
fromtheproduct.Theconveyerbeltspeedismonitoredandcontrolledbycomputer.The
firmusesaprocesscostingsystembasedonactualcostsinthreecostpoolsdirect
materials,directlabour,andfactoryoverheadtoassignproductioncoststooutput.Cost
andproductiondataforOctober2012follow:
ProductionData
Beginningworkinprocessinventory(100%completeintermsofdirect
materials;60%completeintermsofdirectlabour;36%completein
termsoffactoryoverhead)
Startedthisperiod

35,000
bricks
295,000
bricks

Endingworkinprocessinventory(100%completeintermsofdirect
materials;50%completeintermsofdirectlabour;40%completein
termsoffactoryoverhead)

30,000
bricks

CostData

Materials

DirectLabour

Overhead

Beginninginventory

$1,330

$435

$852

CostinOctober

12,200

15,000

18,180

Instructions

Determinethecostofbrickstransferredtofinishedgoodsinventoryandthecostof
bricksinendingworkinprocessinventoryforOctober2012.Assumethecompanyuses
theFIFOmethod.
(adaptedfromCGACanada)

Determine *P447AJessicaCompanymanufactureshockeypucksandsoccerballs.Forbothproducts,
equivalent
materialsareaddedatthebeginningoftheproductionprocessandconversioncostsare
unitsand
incurredevenly.JessicausestheFIFOmethodtocalculateequivalentunits.Production
unitcost,
andcostdataforthemonthofAugustareasfollows:
and
ProductionDataHockeypucks
Units
PercentComplete
preparea
Workinprocessunits,August1
500
70%
production
costreport
Unitsstartedintoproduction
1,600

using
Workinprocessunits,August31
600
30%
FIFO.
CostDataHockeypucks

Workinprocess,August1

$1,125

Directmaterials

1,600

Directlabour

1,160

Manufacturingoverhead

1,000

ProductionDataSoccerballs
Workinprocessunits,August1
Unitsstartedintoproduction
Workinprocessunits,August31
CostDataSoccerballs

200

90%

2,000
150

60%

Workinprocess,August1

$450

Directmaterials

2,500

Directlabour

1,000

995

Manufacturingoverhead

Instructions
(a)Calculatethefollowingforboththehockeypucksandthesoccerballs:
1.

2.

3.

Theequivalentunitsofproductionformaterialsandconversioncosts
Theunitcostsofproductionformaterialsandconversioncosts
Theassignmentofcoststounitstransferredoutandtoworkinprocessatthe
endoftheaccountingperiod

(b)PrepareaproductioncostreportforthemonthofAugustforthehockeypucksonly.

SOLUTIONS TO PROBLEMSSET A
PROBLEM 4-36A
(a)

Unit cost for beginning work in process inventory:


Direct material cost per unit:
Total material cost
$382,500
Equivalent units (850 100%)
850
$450.00

Conversion cost per unit:


Total conversion cost
Equivalent units (850 60%)

$255,000
510
$500.00

Total unit cost for beginning inventory

(b)

Beginning work in process


Started during the month
Total units in production
Less: ending work in process
Units completed and transferred out

$950.00

850
1,300
2,150
450
1,700

PROBLEM 4-37A
(a) Physical units
Units to be accounted for
Work in process, June 1
Started into production
Total units
Units accounted for
Transferred out
Work in process, June 30
Total units
(b) Equivalent units

Units transferred out


Work in process, June 30
4,000 100%
4,000 80%
Total equivalent units
(c)
Materials
Conversion costs
Total unit cost

0
30,000
30,000
26,000
4,000
30,000
Materials
26,000
4,000
30,000

Conversion
Costs
26,000
3,200
29,200

Unit Costs
$9.9333 ($298,000 30,000)
$7.2329 (($60,400 + $150,800) 29,200)
$17.1662 ($9.9333 + $7.2329) rounded

(d) Costs accounted for


Transferred out (26,000 $17.1662)
$446,321
Work in process, June 30
Materials (4,000 $9.9333)
Conversion costs (3,200 $7.2329)
Total costs
$509,200

$39,733
23,146

62,879

PROBLEM 4-37A (Continued)


(e)

KASTEN COMPANY
Molding Department
Production Cost Report
For the Month Ended June 30, 2012
Equivalent Units

Quantities

Physical
Units
(Step 1)

Units to be accounted for


Work in process, June 1
Started into production
Total units
Units accounted for
Transferred out
Work in process, June 30
Total units

Costs
Unit costs (Step 3)
Costs in June
Equivalent units
Unit costs (a) (b)
Costs to be accounted for
Work in process, June 1
Started into production
Total costs

Materials

Conversion
Costs

(Step 2)

0
30,000
30,000
26,000
4,000
30,000

26,000
4,000
30,000

Materials
(a) $298,000
(b) 30,000
$9.9333

26,000
3,200 (4,000 80%)
29,200
Conversion
Costs
$211,200
29,200
$7.2329

Total
$509,200
$17.1662
$ 0
509,200
$509,200

Cost Reconciliation Schedule (Step 4)


Costs accounted for
Transferred out (26,000 $17.1662)
Work in process, June 30
Materials (4,000 $9.9333)
Conversion costs (3,200 $7.2329)
Total costs

$446,321
$39,733
23,146

62,879
$509,200

(a) Calculation of equivalent unitsDept A

Beginning WIP
Started into production
PROBLEM 4-38A
Equivalent Units
Completed and transferred out
Ending work in process
Materials (100%)
Conversion (30%)

Physical
Units
1,000
2,600
3,600

Equivalent Units
Trans
ConIn
Material Version

3,000
600

3,000

3,000

600
3,600

3,600

180
3,180

Calculation of equivalent unitsDept B

Beginning WIP in Dept B


Transferred in from Dept A

Department B
Completed and transferred out
Ending work in process
Transferred in (100%)
Conversion (40%)

Physical
Units
200
3,000
3,200

2,900
300

Equivalent Units
Trans
ConIn
Material Version

2,900

2,900

300
3,200

3,200

120
3,020

PROBLEM 4-38A (Continued)

Per Unit Costs: Dept A


Beginning WIP
Costs added in the month
Equivalent units
Cost per equiv. unit

Per Unit Costs: Dept B


Beginning WIP
Costs added in the month

Total

Total

Trans
In
$ 15,000
218,625
$233,625
3,200

$284.9283 $73.0078

ConVersion
$ 30,000
132,000
162,000
3,180
$50.9434

Material
$24,000
64,000
$88,000
3,600
$24.4444

$75.3878

Equivalent units
Cost per equiv. unit

Trans
In

ConMaterial Version
$ 40,000
600,000
$640,000
3,020
$211.9205

2,900 transferred in $75.3878/unit = $218,625

Work in ProcessDepartment B.................................... 218,625


Work in ProcessDepartment A.............................

218,625

PROBLEM 4-38A (Continued)


(b)

SWEET CORPORATION
Department B
Production Cost Report
For the Month Ended October 31, 2012
Equivalent Units

Quantities
Units to be accounted for
Work in process, beginning
Transferred in
Total units
Units accounted for
Transferred out
Work in process, ending
Total units

Costs
Unit costs (Step 3)
Total costs
Equivalent units
Unit costs (a) (b)
Costs to be accounted for
Work in process, beginning
Transferred in
Started into production
Total costs
Cost Reconciliation Schedule (Step 4)

Physical
Units

Transferr
ed in

(Step 1)

200
3,000
3,200
2,900
300
3,200

Conversion
Costs

(Step 2)

2,900
300
3,200

2,900
120 (300 40%)
3,020

Transferr
ed in

Conversion
Costs

(a) $233,625
(b) 3,200
$73.0078

$640,000
3,020
$211.9205

Total
$873,625
$284.9283
$ 55,000
218,625
600,000
$873,625

Costs accounted for


Transferred out (2,900 $304.6158)
Work in process, ending
Transferred in (300 $92.6953)
Conversion costs (120 $211.9205)
Total costs

$826,292

$21,902.3
4
25,430.4
6

47,333
$873,625

PROBLEM 4-39A
1.

Raw Materials Inventory...................................


Accounts Payable......................................
300,000

300,000

2.

Work in ProcessMixing.................................
Work in ProcessPackaging..........................
Raw Materials Inventory...........................
255,000

210,000
45,000

3.

Factory Labour..................................................
Wages Payable..........................................
248,900

248,900

4.

Work in ProcessMixing.................................
Work in ProcessPackaging..........................
Factory Labour..........................................
248,900

182,500
66,400

5.

Manufacturing Overhead..................................
Accounts Payable......................................
790,000

790,000

6.

Work in ProcessMixing (28,000 $22).........


Work in ProcessPackaging..........................
(6,000 $22)
Manufacturing Overhead..........................
748,000

616,000
132,000

7.

Work in ProcessPackaging..........................
Work in ProcessMixing.........................
979,000

979,000

8.

Finished Goods Inventory................................


Work in ProcessPackaging...................
1,315,000

1,315,000

9.

Accounts Receivable........................................

2,500,000

Sales...........................................................
2,500,000
Cost of Goods Sold...........................................
Finished Goods Inventory........................
1,604,000

1,604,000

PROBLEM 4-40A

Calculation of cost per equivalent unit

Beginning WIP in Dept B


Transferred in from Dept A

Department B
Completed and transferred out
Ending work in process
Transferred in (100%)
Materials (0%)1
Conversion (37.5%)

Physical
Units
15,000
46,000
61,000

45,000
16,000

Equivalent Units
Trans
ConIn
Material version

45,000

45,000

45,000

16,000
0
61,000

61,000

45,000

6,000
51,000

Additional Material is added at the end in Department B.

Per Unit Costs:


Beginning WIP
Costs added in March
Equivalent units
Cost per equiv. unit
1

Total

$2.616

46,000 transferred in $0.95/unit = $43,700

Trans
In
$ 9,500
$43,700 1
$53,200
61,000
$0.872

Material
$ 13,000
$ 13,000
45,000
$0.289

Conversion
$11,200
$63,000
$74,200
51,000
$1.455

PROBLEM 4-40A (Continued)

(a)
Total
Cost of units
transferred out:
Units transferred out2
Cost per unit

Trans
In

Material

Conversion

45,000
$2.616
$117,720

Transferred to Finished Goods

Trans
Total
(b)

Cost of ending WIP


Transferred in (100%)
Material (0%)
Conversion (37.5%)
Cost per unit

In

ConMaterial

version

16,000
0

$22,682

$0.872
$13,952

$0.289
$ 0

6,000
$1.455
$8,730

PROBLEM 4-41A
(a)

Physical
Units
Units to be accounted for
Work in process, November 1
Started into production
Total units

35,000
700,000
735,000

Units accounted for


Transferred out
Work in process, November 30
Total units

710,000
25,000
735,000

Total
Cost per unit

Beginning work in process


Added during month

Equivalent units
Per unit cost
1

$3.05

Equivalent Units
Conversion
Materials
Costs

710,000
25,000
735,000

710,000
10,000
720,000

Materials

Conversion
Costs

$ 69,000
1,548,000
$1,617,000

$48,150
563,8501
612,000

735,000

720,000

$2.20

$0.85

$225,920 + $337,930 = $563,850

(b) Costs accounted for

Transferred out (710,000 $3.05)


Work in process, November 30
Materials (25,000 $2.20)
Conversion costs (10,000 $0.85)

$2,165,500
$55,000
8,500

63,500

Total costs

$2,229,000

PROBLEM 4-41A (Continued)


(c)

CAVALIER COMPANY
Assembly Department
Production Cost Report
For the Month Ended November 30, 2012
Equivalent Units

Quantities

Physical
Units
(Step 1)

Units to be accounted for


Work in process, November 1
Started into production
Total units
Units accounted for
Transferred out
Work in process, November 30
Total units

Costs
Unit costs (Step 3)
Costs in November
Equivalent units
Unit costs (a) (b)
Costs to be accounted for
Work in process, November 1
Started into production
Total costs
Cost Reconciliation Schedule (Step 4)

Materials

Conversion
Costs

(Step 2)

35,000
700,000
735,000
710,000
25,000
735,000

710,000
25,000
735,000

Materials
(a) $1,617,000
(b) 735,000
$2.20

710,000
10,000 (25,000 40%)
720,000
Conversion
Costs
$612,000
720,000
$0.85

Total
$2,229,000
$3.05
$ 117,150
2,111,850
$2,229,000

Costs accounted for


Transferred out (710,000 $3.05)
Work in process, November 30
Materials (25,000 $2.20)
Conversion costs
(10,000 $0.85)
Total costs

$2,165,500
$55,000
8,500

63,500
$2,229,000

PROBLEM 4-42A
(a) (1)

Physical
Units

Units to be accounted for


Work in process, July 1
Started into production
Total units

500
1,000
1,500

Units accounted for


Transferred out
Work in process, July 31
Total units

900
600
1,500

(2)

900
600
1,500

900
180
1,080

Materials

Conversion
Costs

$ 750
2,400
$3,150

$ 600
2,6401
$3,240

Equivalent units

1,500

1,080

Per unit cost

$2.10

$3.00

Cost per unit


Beginning work in process
Added during month

Equivalent Units
Conversion
Materials
Costs

$1,580 (Direct Labour) + $1,060 (Manufacturing Overhead)

(3) Costs accounted for

Transferred out (900 ($2.10+3.00)


Work in process, July 31
Materials (600 $2.10)
Conversion costs (180 $3.00)
Total costs

$4,590
$1,260
540

1,800
$6,390

PROBLEM 4-42A (Continued)


(b)

CHEN COMPANY
Basketball Department
Production Cost Report
For the Month Ended July 31, 2012
Equivalent Units

Quantities
Units to be accounted for
Work in process, July 1
Started into production
Total units
Units accounted for
Transferred out
Work in process, July 31
Total units

Physical
Units

Materials

(Step 1)

(Step 2)

500
1,000
1,500
900
600
1,500

Costs
Unit costs (Step 3)
Costs in July
Equivalent units
Unit costs (a) (b)
Costs to be accounted for
Work in process, July 1
Started into production
Total costs
Cost Reconciliation Schedule (Step 4)

Conversion
Costs

(a)
(b)

900
600
1,500

900
180
1,080

Materials

Conversion
Costs

$3,150
1,500
$2.10

$3,240
1,080
$3.00

Total
$6,390
$5.10

$1,350
5,040
$6,390

Costs accounted for


Transferred out (900 $5.10)
Work in process, July 31
Materials (600 $2.10)
Conversion costs (180 $3.00)
Total costs

$4,590
$1,260
540

1,800
$6,390

PROBLEM 4-43A
(a) Computation of equivalent units:
Physical
Units
Units accounted for
Transferred out
Work in process, October 31
Materials (50,000 60%)
Conversion costs
(50,000 40%)
Total units

130,000
50,000

180,000

Equivalent Units
Conversion
Materials
Costs
130,000
30,000
160,000

130,000

20,000
150,000

Computation of October unit costs


Materials:$240,000 160,000 equivalent units =
$1.50
Conversion cost:$105,000 150,000 equivalent units =
.70
Total unit cost, October
$2.20
(b) Cost Reconciliation Schedule
Transferred out (130,000 $2.20)
Work in process, October 31
Materials (30,000 $1.50)
Conversion costs (20,000 $0.70)
Total costs

$286,000
$45,000
14,000

59,000
$345,000

PROBLEM 4-44A

(a) Cost of units transferred to finished goods:


11,90
0

Units transferred out


Total cost per unit

$12.00
$142,800

(b)
Physical
Units
Units to be accounted for
Work in process, May 1
Started into production
Total units
Units accounted for
Transferred out
Work in process, May 31
Material (100%)
Conversion (40%)
Total units

Cost of WIP May 31


Transferred in (100%)
Material (100%)
Conversion (40%)

Total
4,000

Equivalent Units
Conversio
Materials
n
Costs

1,900
14,000
15,900
11,900
4,000

11,900

11,900

4,000
15,900

Trans
In

15,900

1,600
13,500

ConMaterial version

4,000
4,000
1,600
$6.00

Cost per unit


$38,400

$24,000

$2.00

$4.00

$8,000

$6,400

*PROBLEM 4-45A
(a)

Units in beginning work in process


Plus: transferred in
Total units in production
Less: completed and transferred out
Units in ending work in process

25,000
175,000
200,000
170,000
30,000

(b) and (c)


Physical
Units

Quantities
Units to be accounted for
Work in process, beginning
Transferred into production
Total units
Units accounted for
Work in process,
beginning
Transferred in and completed
Work In process, ending
Total units

Equivalent Units
Conversi
Trans Material
on
In
s
Costs

25,000
175,000
200,000

25,000
25,000 25,000
5,000
145,000 145,000 145,000

30,000
30,000
0
145,000
12,000

200,000 175,000 170,000 162,000
(b)
(c)

*PROBLEM 4-46A
Equivalent Units
Quantities

Physical
Material
Units

Labour

Overhead

Units to be accounted for


Work in process, beginning
Started this period
Total units

35,000
295,000
330,000

Units accounted for


Work in process, beginning

35,000

Materials (0%)

Labour (40%1)

14,000

Overhead (64%2)
Started and completed
Work In process, ending
Materials (100%)
Labour (50%)

22,400
265,0003 265,000 265,000 265,000
30,000
30,000
15,000

Overhead (40%)

12,000

Total equivalent units (m)

330,000 295,000m 294,000m 299,400m

Current period costs (n)

$45,380 $12,200n $15,000n


$18,180n

Per equivalent unit cost

$0.1531 $0.0414 $0.0510 $0.0607

[(n) (m)]
1

Labour 60% complete, 40% to be completed


Overhead 36% complete, 64% to be completed
3
330, 000 35,000 (beginning WIP) 30,000 (ending WIP)
2

PROBLEM 4-46A (Continued)


Costs for completed goods and ending work in process
Material Labour
Total
Beginning Inventory

$2,617

Complete beginning WIP


Materials (0 $0.0414)
Labour (14,000 $0.0510)
Overhead (22,400 $0.0607)

2,073

Started and completed


Materials (265,000 $0.0414)
Labour (265,000 $0.0510)
Overhead (265,000 $0.0607)
Cost for units transferred out

40,572

$1,330

$435

Conver
sion
$852

0
714
1,359

10,971
13,515
16,086
$45,262 $12,301 $14,664 $18,297

Ending work in process


2,735
Materials (30,000 $0.0414)
1,242
Labour (15,000 $0.0510)
765
Overhead (12,000 $0.0607)
728
Total costs $47,997 $13,543 $15,429 $19,025

*PROBLEM 4-47A
(a) A. HOCKEY PUCKS
Physical
Units

Quantities
Units to be accounted for
Work in process, beginning
Started into production
Total units

500
1,600
2,100

Units accounted for


Work in process,
beginning
Started and completed
Work In process, ending
Total units
(1)

Equivalent units
Materials
Work in process, Aug 1
Started and completed
Work in process, Aug 31
Total
Equivalent units
Conversion
Work in process, Aug 1
Started and completed
Work in process, Aug 31
Total

100% Materials added, 0% to be added

500
1,000
600
2,100

Physical
Units
500
1,000
600
2,100

Physical
Units
500
1,000
600
2,100
2

Materials
Added
This Period
0%1
100%
100%

Conversion
Added
This Period
30%2
100%
30%

Equivalent
Units
0
1,000
600
1,600

Equivalent
Units
150
1,000
180
1,330

70% completed, 30% to be added

*PROBLEM 4-47A (Continued)


(2) Unit costs
Costs in August (a)
Equivalent units (b)
Unit costs [(a) (b)]
3

Materials

Conversion

$1,600
1,600
$1.00

$2,1603
1,330
$1.624

Direct Labour, $1,160 + Manufacturing Overhead, $1,000

(3) Costs for completed goods and ending work in process

Beginning WIP
Complete beginning WIP
Materials (0 $1.00)
Conversion (150 $1.624)
Started and completed
Materials (1,000 $1.00)
Conversion (1,000 $1.624)

Total

Beg
WIP

$1,125

$1,125

Materi
als

Conver
sion

244
$244
2,624

Ending WIP
892
Materials (600 $1.00)
Conversion (180 $1.624)
Total costs $4,885

$1,000
1,624
600
$1,125

$1,600

292
$2,160

*PROBLEM 4-47A (Continued)


B. SOCCER BALLS
Physical
Units

Quantities
Units to be accounted for
Work in process, beginning
Started into production
Total units
Units accounted for
Work in process,
beginning
Started and completed
Work In process, ending
Total units
(1) Equivalent units
Materials
Work in process, Aug 1
Started and completed
Work in process, Aug 31
Total
Equivalent units
Conversion
Work in process, Aug 1
Started and completed
Work in process, Aug 31
Total

Physical
Units
200
1,850
150
2,200

Physical
Units
200
1,850
150
2,200

200
2,000
2,200
200
1,850
150
2,200
Materials
Added
This Period
0%4
100%
100%

Conversion
Added
This Period
10%5
100%
60%

Equivalent
Units
0
1,850
150
2,000

Equivalent
Units
20
1,850
90
1,960

100% completed as to materials, 0% to be added


be added

90% completed, 10% to

*PROBLEM 4-47A (Continued)


(2) Unit costs

Costs in August (a)


Equivalent units (b)
Unit costs [(a) (b)]
6

Materials

Conversion

$2,500
2,000
$1.250

$1,9956
1,960
$1.018

Direct Labour $1,000 + Manufacturing Overhead $995

(3) Costs for completed goods and ending work in process


Total
Beginning work in process
Complete beginning WIP
Materials (0 $1.250)
Conversion (20 $1.018)
Started and completed
Materials (1,850 $1.250)
Conversion (1,850 $1.018)
Cost for units transferred out

$450
20

Beg
WIP

Materi
als

Conver
sion

$450
$20

4,195
$2,312
$4,665

Ending work in process


280
Materials (150 $1.250)
Conversion (90 $1.018)
Total costs $4,945

$450

$2,312

1,883
$1,903

188
$450

$2,500

92
$1,995

*PROBLEM 4-47A (Continued)


(b)

JESSICA COMPANY
Production Cost ReportHockey pucks
For the Month Ended August 31

Quantities
Units to be accounted for
Work in process, August 1
Started into production
Total units
Units accounted for
Completed and transferred out
Work in process, August 1
Started and completed
Work in process, August 31
Total units
Costs
Unit costs
Costs in August (a)
Equivalent units (b)
Unit costs [(a) (b)]
Costs to be accounted for
Work in process, August 1
Added into production
Total costs
Cost Reconciliation Schedule
Costs accounted for
Transferred out
Work in process, August 1
Conversion costs to complete
beginning inventory (150 $1.624)
Started and completed (1,000 $2.624)
Work in process, August 31
Materials (600 $1)
Conversion costs (180 $1.624)
Total costs
*($1,600 + $1,160 + $1,000)

Physical
Units

Equivalent Units
Conversion
Materials
Costs

500
1,600
2,100

500
1,000
600
2,100

0
1,000
600
1,600

150
1,000
180
1,330

$1,600
1,600
$1.00

$2,160
1,330
$1.624
$1,125
3,760*
$4,885

$1,125
244
2,624
$ 600
292

$3,993

892
$4,885

Problems:SetB
Analyze *P448BUnitedDominionManufacturingCo.producesawoodrefinishingkitthatsellsfor
aprocess
$17.95.Thefinalprocessingofthekitsoccursinthepackagingdepartment.Aquilted
costing
wrapisappliedatthebeginningofthepackagingprocess.Acompartmentedoutsidebox
system
printedwithinstructionsandthecompany'snameandlogoisaddedwhenunitsare70%
and
throughtheprocess.Conversioncosts,consistingofdirectlabourandappliedoverhead,
calculate
occurevenlythroughoutthepackagingprocess.Conversionactivitiesafterthecompletion
equivalen
oftheboxincludepackagesealing,testingforleakage,andfinalinspection.The
tunits
followingdataareforthepackagingdepartment'sactivitiesduringthemonthofOctober:
andunit
costs.
1. Beginningworkinprocessinventorywas10,000units,60%completeintermsof
conversioncosts.
2. Duringthemonth,40,000unitsweretransferredtopackaging.

3. Therewere10,000unitsinendingworkinprocess,70%completeintermsof
conversioncosts.
Thepackagingdepartment'sOctobercostswereasfollows:
Quiltedwrap

$80,000

Outsideboxes

50,000

Directlabour

22,000

Appliedoverhead($3.00/perdirectlabourdollar)

66,000

Thecoststransferredinfrompriorprocessingwere$3.00perunit.Thecostofgoodssold
forthemonthwas$240,000,andtheendingfinishedgoodsinventorywas$84,000.
UnitedDominionManufacturingCo.usestheFIFOmethodforprocesscosting.

Instructions

(a)PrepareascheduleofequivalentunitsfortheOctoberactivityinthepackaging
department.
(b)DeterminethecostperequivalentunitfortheOctoberproduction.
(adaptedfromCMACanada)

Calculate P449BMontrealLeatherCompanymanufactureshighqualityleathergoods.Oneofthe
equivalen
company'smainproductsisafineleatherbelt.Thebeltsareproducedinasingle,
tunits,
continuousprocessinitsQuebecplant.Duringtheprocess,leatherstripsaresewn,
unitcosts,
punched,anddyed.Thebeltsthenenterafinalfinishingstagetoconcludetheprocess.
andcosts
Labourandoverheadareappliedcontinuouslyduringthemanufacturingprocess.All
assigned.
materials,leatherstrips,andbucklesareintroducedatthebeginningoftheprocess.The
firmusestheweightedaveragemethodtocalculateitsunitcosts.
TheleatherbeltsproducedattheQuebecplantaresoldwholesalefor$9.85each.
Managementwantstocomparethecurrentmanufacturingcostperunitwiththemarket
pricesforleatherbelts.TopmanagementhasaskedtheQuebecplantcontrollertosubmit
dataonthecostofmanufacturingtheleatherbeltsforthemonthofOctober.Thesecost
datawillbeusedtodeterminewhethermodificationsintheproductionprocessshouldbe
initiatedorwhetheranincreaseinthebelts'sellingpriceisjustified.Thecostperbeltused
forplanningandcontrolis$4.85.
Theworkinprocessinventoryconsistedof12,200partiallycompletedunitsonOctober1.
Thebeltswere45%completeintermsofconversioncosts.Thecostsincludedinthe
inventoryonOctober1wereasfollows:
Leatherstrips

$3,000

Buckles

750

Conversioncosts

900

Total

$4,650

DuringOctober,22,800leatherstripswereplacedintoproduction.Atotalof21,000
leatherbeltswerecompleted.TheworkinprocessinventoryonOctober31consistedof
14,000belts,whichwere50%completeintermsofconversioncosts.
ThecostschargedtoproductionduringOctoberwereasfollows:
Leatherstrips

$61,800

Buckles

13,650

Conversioncosts

62,100

Total

$137,550

Instructions
InordertoprovidecostdataonthemanufactureofleatherbeltsintheQuebecplanttothe
topmanagementofMontrealLeatherCompany,calculatethefollowingamountsforthe
monthofOctober:
(a)Theequivalentunitsformaterialsandconversioncosts
(b)TheassignmentofproductioncoststotheOctober31workinprocessinventoryand
togoodstransferredout
(c)Theweightedaverageunitcostoftheleatherbeltscompletedandtransferredto
finishedgoods.Commentonthecostperbeltthatthecompanyusesforplanningand
control.

(adaptedfromCMACanada)

Calculate *P450BThefollowinginformationisforproductionactivitiesintherefiningdepartmentofPetro
equivalen
PureCorporation.Allunitsinworkinprocess(WIP)werecostedusingtheFIFOcost
tunits,
system.
unitcosts,
Percentageof
Conversion
andcosts
RefiningDepartment
Units
Completion
Costs
assigned
WIP,February1
25,000
70%
$22,000
with
FIFO.
Unitsstartedandcostsincurred
135,000

143,000
duringFebruary

Unitscompletedandtransferredto
themixingdepartment
WIP,February28

100,000

60%

Instructions

(a)Calculatetheconversioncostsperequivalentunitofproductionduringthelastperiod
andthisperiod.
(b)CalculatetheconversioncostintheworkinprocessinventoryaccountatFebruary28.
(c)Calculatetheperunitconversioncostoftheunitsstartedlastperiodandcompleted
thisperiod.

Preparea *P451BPetroPureCorporationmanufactureschemicaladditivesforindustrialapplications.As
production
thenewcostaccountant,youhavebeenassignedthetaskofcompletingtheproduction
costreport
costreportforthemostrecentperiod.ThecompanyusestheFIFOmethodofprocess
using
costing.Thefollowinginformationisforthemostrecentperiod:
FIFO.
ProductionDataUnits
BeginningWIPinventory(75%completeintermsofmaterials;70%
completeintermsofconversioncosts)

18,000

Unitsstartedintoproductionthisperiod

27,000

Unitscompletedandtransferredout

33,000

EndingWIPinventory(60%completeintermsofmaterials;50%complete
intermsofconversioncosts)

12,000

CostData
Beginninginventory:

ProductionDataUnits
Materials

$32,000

Conversioncosts

64,000

Currentperiod:

Materials

252,000

Conversioncosts

440,000

Instructions
PrepareacompleteproductionreportfortheperiodusingtheFIFOmethod.(Roundthe
costperequivalentunittothreedecimalplaces;roundthecostsinthecostreporttothe
nearestdollar.)
(adaptedfromCGACanada)
Determine *P452BNationalCompanymanufacturesbicyclesandtricycles.Forbothproducts,materialsare
equivalent
addedatthebeginningoftheproductionprocess,andconversioncostsareincurred
unitsand
uniformly.NationalCompanyusestheFIFOmethodtocalculateequivalentunits.
unitcosts
ProductionandcostdataforthemonthofMayareasfollows:
andassign
ProductionDataBicycles
Units
PercentComplete
costsfor
Workinprocessunits,May1
300
70%
processes;
preparea
Unitsstartedintoproduction
1,200

production
Workinprocessunits,May31
500
30%
cost
report.
CostDataBicycles

Workinprocess,May1

$17,400

Directmaterials

48,000

Directlabour

19,400

Manufacturingoverhead

30,420

ProductionDataTricycles

Units

PercentComplete

Workinprocessunits,May1

100

75%

Unitsstartedintoproduction

900

Workinprocessunits,May31

200

40%

CostDataTricycles

Workinprocess,May1

$8,000

Directmaterials

63,000

Directlabour

31,060

Manufacturingoverhead

45,415

Instructions
(a)Calculatethefollowingforboththebicyclesandthetricycles:
1. Theequivalentunitsofproductionformaterialsandconversioncosts


2. Theunitcostsofproductionformaterialsandconversioncosts

3. Theassignmentofcoststounitstransferredoutandinprocessattheendof
theaccountingperiod
(b)PrepareaproductioncostreportforthemonthofMayforthebicyclesonly.

Complete P453BBicnellCorporationmanufactureswaterskisthroughtwoprocesses:mouldingand
thefour
packaging.Inthemouldingdepartment,fibreglassisheatedandshapedintotheformofa
steps
ski.Inthepackagingdepartment,theskisareplacedincartonsandsenttothefinished
necessary
goodswarehouse.Materialsareenteredatthebeginningofbothprocesses.Labourand
toprepare
manufacturingoverheadareincurreduniformlythroughouteachprocess.Productionand
a
costdataforthemouldingdepartmentforJanuary2012arepresentedbelow:
production
ProductionData
January
cost
Beginningworkinprocessunits
0
report.
Unitsstartedintoproduction

42,500

Endingworkinprocessunits

2,500

Percentcompleteendinginventory

40%

CostData

Materials

$510,000

Labour
Overhead
Total

Instructions

96,000
150,000
$756,000

(a)Calculatethephysicalunitsofproduction.
(b)Determinetheequivalentunitsofproductionformaterialsandconversioncosts.
(c)Calculatetheunitcostsofproduction.
(d)Determinethecoststobeassignedtotheunitstransferredoutandinprocess.
(e)Prepareaproductioncostreportforthemouldingdepartmentforthemonthof
January.

Complete *P454BMeethaCorporationisinthecandymanufacturingbusiness.Productsgothroughtwo
thefour
productiondepartments(Afirst,thenB).DatafromthosedepartmentsforSeptember
steps
2012arepresentedbelow.
necessary

DepartmentA
DepartmentB
toprepare

Beginningworkinprocess Beginningworkinprocess
a
production
Numberofunits
1000
200
cost
%completeformaterials
100%

report.
%completefortransferredin

100%

60%

30%

Totalmaterialscost

$24,000

Totalconversioncost

$30,000

$40,000

$15,000

%completeforconversion

Totaltransferredincosts

Numberofunits

Endingworkinprocess

Endingworkinprocess

600

300

%completeformaterials

100%

%completefortransferredin

100%

30%

40%

%completeforconversion

MeethaCorporationstarted2,600unitsofproductduringthemonthindepartmentA.
CostsincurredindepartmentAforSeptember2012totalled$64,000formaterialand
$132,000forconversion.Additionally,departmentBincurredconversioncostsin
September2012of$600,000.DepartmentBaddsnomaterialstotheproduct.

Instructions
(a)JournalizethetransferofgoodsfromdepartmentAtodepartmentBduring
September2012.MeethaCorporationaccountsforitscostsusingtheFIFOmethod.
(b)PrepareaproductioncostreportfordepartmentBforSeptember2012.

Journalize P455BMcNallyCompanymanufacturesanutrient,Everlife,throughtwomanufacturing
transactions.
processes:blendingandpackaging.Allmaterialsareenteredatthebeginningofeach
process.OnAugust1,2012,inventoriesconsistedof$5,000inRawMaterials,$0in
WorkinProcessBlending,$3,945inWorkinProcessPackaging,and$7,500in
FinishedGoods.Thebeginninginventoryforpackagingconsistedof500units,twofifths
completeintermsofconversioncostsandfullycompleteintermsofmaterials.During
August,9,000unitswerestartedintoproductioninblending,andthefollowing
transactionswerecompleted:
1.

2.

3.

4.

5.

6.

7.

8.

9.

Purchased$25,000ofrawmaterialsonaccount.
Issuedrawmaterialsforproduction:blending$18,930andpackaging$9,140.
Incurredlabourcostsof$23,770.
Usedfactorylabour:blending$13,320andpackaging$10,450.
Incurred$41,500ofmanufacturingoverheadonaccount.
Appliedmanufacturingoverheadattherateof$25permachinehour.Machine
hourswere900forblendingand300forpackaging.
Transferred8,200unitsfromblendingtopackagingatacostof$44,940.
Transferred8,600unitsfrompackagingtoFinishedGoodsatacostof$67,490.
Soldgoodscosting$62,000for$90,000onaccount.

Instructions
JournalizetheAugusttransactions.

AssigncostsP456BCrosbyCompanyhasseveralprocessingdepartments.Costschargedtotheassembly
andprepare
departmentforOctober2012totalled$1,249,500,asfollows:
aproduction
Workinprocess,October1

costreport.
Materials
$29,000
Conversioncosts

16,500

$45,500

Materialsadded

1,006,000

Labour

90,000

Overhead

108,000

Productionrecordsshowthat25,000unitswereinbeginningworkinprocess,40%
completeintermsofconversioncosts;425,000unitswerestartedintoproduction;and
35,000unitswereinendingworkinprocess,40%completeintermsofconversioncosts.
Materialsareenteredatthebeginningofeachprocess.

Instructions

(a)Determinetheequivalentunitsofproductionandtheunitproductioncostsforthe
assemblydepartment.
(b)Determinetheassignmentofcoststogoodstransferredoutandinprocess.
(c)Prepareaproductioncostreportfortheassemblydepartment.

Determin
e
equivalen
tunits
andunit
costs,and
assign
costs.

P457BSarkuCompanymanufacturesbicyclesandtricycles.Forbothproducts,materialsare
addedatthebeginningoftheproductionprocess,andconversioncostsareincurred
uniformly.ProductionandcostdataforthemonthofMayareasfollows:
ProductionDataBicycles
Workinprocessunits,May1

Units

PercentComplete

500

80%

1,500

800

25%

CostDataBicycles

Workinprocess,May1

$15,000

18,000

$33,000

50,000

Unitsstartedintoproduction
Workinprocessunits,May31

Materials
Conversioncosts
Directmaterials

ProductionDataBicycles

Units

PercentComplete

Directlabour

18,320

Manufacturingoverhead

33,680

Instructions

(a)Calculatethefollowing:
1.

2.

3.

Theequivalentunitsofproductionformaterialsandconversioncosts
Theunitcostsofproductionformaterialsandconversioncosts
Theassignmentofcoststounitstransferredoutandinprocessattheendof
theaccountingperiod

(b)PrepareaproductioncostreportforthemonthofMayforthebicycles.

Calculate
equivalent
unitsand
completea
production
costreport.

P458BWindsorCleanerCompanyusesaweightedaverageprocesscostingsystemand
manufacturesasingleproductanallpurposeliquidcleaner.Thecompanyhasjust
completedthemanufacturingactivityforthemonthofMarch.Apartiallycompleted
productioncostreportforthemonthofMarchforthemixingandblendingdepartment
isshownbelow.

WINDSORCLEANERCOMPANY
MixingandBlendingDepartment
ProductionCostReport
FortheMonthEndedMarch31

EquivalentUnits

Physica
lUnits

Material
s

Conversio
nCosts

Unitstobeaccountedfor
Workinprocess,March1
(40%materials,20%
conversioncosts)

10,000

Startedintoproduction

100,00
0

Totalunits

110,00
0

95,000

15,000

110,00
0

Quantities

UnitsaccountedforTransferred
out
Workinprocess,March31(
materials,
ncosts)

conversio

Totalunitsaccountedfor
Costs

Material
s

Conversio
nCosts

Unitcosts

CostsinMarch

$156,00
0

$98,000

Equivalentunits

Unitcosts

$?

Workinprocess,March1

$
8,700

Startedintoproduction

245,300

$254,00
0

CostReconciliationSchedule

Costsaccountedfor

Coststobeaccountedfor

Totalcosts

$?

Total

$254,00
0

$?

WINDSORCLEANERCOMPANY
MixingandBlendingDepartment
ProductionCostReport
FortheMonthEndedMarch31

Quantities

Physica
lUnits

EquivalentUnits
Material
s

Conversio
nCosts

Transferredout

$?

Workinprocess,March31

Materials

Conversioncosts

Totalcosts

$?

Instructions

(a)Prepareaschedulethatshowshowtheequivalentunitswerecalculatedsothatyou
cancompletetheQuantities:Unitsaccountedforequivalentunitssectioninthe
productioncostreportabove,andcalculateMarchunitcosts.
(b)CompletetheCostReconciliationSchedulepartoftheproductioncostreport
above.

Determine *P459BMaloneyCompanymanufactureshockeypucksandsoccerballs.Forbothproducts,
equivalent
materialsareaddedatthebeginningoftheproductionprocessandconversioncostsare
unitsand
incurreduniformly.MaloneyusestheFIFOmethodtocalculateequivalentunits.
unitcosts
ProductionandcostdataforthemonthofAugustareasshownbelow.
andassign
ProductionDataHockeypucks
Units
PercentComplete
costsfor
Workinprocessunits,August1
500
60%
processes
using
Unitsstartedintoproduction
1,600

FIFO;
Workinprocessunits,August31
600
50%
preparea
production
CostDataHockeypucks

cost
Workinprocess,August1
$1,125

report.
Directmaterials

1,600

Directlabour

1,175

Manufacturingoverhead

1,000

ProductionDataSoccerballs
Workinprocessunits,August1
Unitsstartedintoproduction
Workinprocessunits,August31
CostDataSoccerballs

Units

PercentComplete

200

80%

2,000
150

70%

Workinprocess,August1

$450

Directmaterials

2,600

Directlabour

1,000

995

Manufacturingoverhead

Instructions

(a)Calculatethefollowingforboththehockeypucksandthesoccerballs:
1.

2.

3.

Theequivalentunitsofproductionformaterialsandconversioncosts
Theunitcostsofproductionformaterialsandconversioncosts
Theassignmentofcoststounitstransferredoutandinprocessattheendof
theaccountingperiod

(b)PrepareaproductioncostreportforthemonthofAugustforthehockeypucksonly.

SOLUTIONS TO PROBLEMSSET B
*PROBLEM 4-48B

(a)
Quantities

Units to be accounted for


Work in process, beginning
Started this period
Total units
Units accounted for
Work in process, beginning
Materials-1 (0%)
Materials-2 (100%)
Conversion (40%1)
Started and completed
Work In process, ending
Materials-1 (100%)
Materials-2 (100%)*
Conversion (70%)
Total equivalent units

Equivalent Units
Material Material Convers
Physical
s
s
ion
Units
(1)
(2)
Costs

10,000
40,000
50,000

10,000
10,000
30,000
10,000

30,000 30,000

4,000
30,000

10,000
10,000
50,000

40,000 50,000

7,000
41,000

Current period costs

$80,000 $50,000
$88,000

(b) Per equivalent unit cost


1

($2.00 + $1.00 + $2.15)

*material is added at 70%


1

$5.151

$2.00

$1.00

$2.15

PROBLEM 4-49B

Equivalent Units
(a)
Quantities

Units to be accounted for


Work in process, beginning
Started this period
Total units
Units accounted for
Completed
Work In process, ending
Strips (100%)
Buckles (100%)
Conversion (50%)
Total equivalent units (m)

(b)

Physical
Units

Strips

12,200
22,800
35,000

21,000
14,000

21,000

21,000

14,000
35,000

35,000

Strips

Costs

Added during the month

21,000

14,000

TOTAL

Costs to be accounted for:


Work in process, beginning

Conversi
Buckles
on
Costs

35,000

7,000
28,000m

Conversi
Buckles
on
Costs

$4,650

$3,000

$750

$900

$137,550

61,800

13,650

62,100

Total costs (n)

$142,200 $64,800n $14,400n $63,000n

Per equivalent unit cost


[(n) (m)]

$4.51281 $1.8514 $0.4114

($1.8514 + $0.4114 + $2.25)

$2.25

PROBLEM 4-49B (Continued)

Cost accounted for as follows:

TOTAL

Completed and transferred out


(21,000 $4.5128)

$94,769

Ending work in process


Strips (14,000 $1.8514)
Buckles (14,000 $0.4114)
Conversion (7,000 $2.25)
Total costs

Strips

Convers
Buckles
ion
Costs

$47,430
$25,920
$5,760
$15,750
$142,199

(c) The weighted-average cost of a completed belt is $4.5128 each.


This is less than the planning and control cost for a belt, which might
indicate that no modifications in the production process are required.
However, companies should practice continuous improvement, and
still look for ways that could reduce their manufacturing costs, and
increase their gross margin.
Management should also investigate the accuracy of their control
cost of $4.85, as it may be out of date, and does not reflect actual
experience.

*PROBLEM 4-50B
(a) (1) Per unit conversion cost for last period:
Number of units transferred
25,000
Percentage completed
70%
= Equivalent units
17,500
Cost assigned
$22,000
Per unit conversion cost last period
$1.257
(2) Per unit conversion cost for this period:
Equivalent units this period:
Complete beginning inventory (30%1 25,000)
Started and completed (100,000 25,000)
Started ending inventory (60% 60,000*)
Total equivalent units for the current period
1

7,500
75,000
36,000
118,500

70% completed, 30% to be added

Per unit conversion cost this period:


$143,000 118,500 = $1.2067
*Calculation of units in ending inventory: 25,000 + 135,000 100,000
(b) Equivalent units, ending inventory
(60,000* 60%)
Conversion per unit cost
Total conversion cost in ending inventory
(c) Per unit cost of units in beginning inventory:
70% completed last month at a rate of $1.257
30% completed this month at a rate of $1.2067
Weighted-average unit cost

36,000
$1.2067
$43,441

$0.88
$0.36
$1.24

*PROBLEM 4-51B

PETRO-PURE CORPORATION
Production Cost Report
For the current period

Quantities
Units to be accounted for
Work in process, beginning
Started this period
Total units
Units accounted for
Work in process, beginning
Materials (25%)
Conversion (30%)
Started and completed
Work In process, ending
Materials (60%)
Conversion (50%)
Total equivalent units (m)

Physical
Units
18,000
27,000
45,000

18,000
4,500
15,000
12,000

15,000

5,400
15,000

7,200
45,000

Costs added this period


Cost per equivalent unit [(s) (t)]

Equivalent Units
Conversion
Materials
Costs

$26.105

26,700

6,000
26,400

$252,000

$440,000

$9.438

$16.667

*PROBLEM 4-51B (Continued)


Costs
Costs to be accounted for:
Work in process, beginning
Added this period
Total costs
Cost accounted for as follows:
Work in process, beginning
Complete beginning WIP
Material (4,500 $9.438)
Conversion (5,400 $16.667)
Started and Completed
(15,000 $26.105)
Work in process, ending
Material (7,200 $9.438)
Conversion (6,000 $16.667)
Total costs

TOTAL

Materials

Conversion
Costs

$96,000
692,000
$788,000

$32,000
252,000
$284,000

$64,000
440,000
$504,000

$96,000
132,471

$32,000

$64,000

42,471
90,000
391,575
167,954

141,575

250,000

67,954
100,000
$788,000

$284,000

$504,000

(a)

*PROBLEM 4-52B
A. BICYCLES
Physical
Units

Quantities
Units to be accounted for
Work in process, beginning
Started into production
Total units
Units accounted for
Work in process,
beginning
Started and completed
Work In process, ending
Total units

300
1,200
1,500
300
700
500
1,500

(1) Equivalent unitsMaterials


Physical
Units
Work in process, beg
Started and completed
Work in process, end
Total

300
700
500
1,500

Materials
Added
This Period
0%
100%
100%

Equivalent
Units
0
700
500
1,200

Equivalent unitsConversion
Physical
Units
Work in process, beg
Started and completed
Work in process, end
Total

300
700
500
1,500

Conversion
Added
This Period
30%
100%
30%

Equivalent
Units
90
700
150
940

*PROBLEM 4-52B (Continued)


(2) Unit costs

Costs in the month (a)


Equivalent units (b)
Unit costs [(a) (b)]

Materials

Conversion

$48,000
1,200
$40.00

$49,8201
940
$53.00

Direct Labour $19,400 + Manufacturing Overhead $30,420

(3)
Costs
Costs to be accounted for:
Work in process, beginning
Added this period
Total costs
Cost accounted for as follows:
Work in process, beginning
Complete beginning WIP
Material (0 $40.00)
Conversion (90 $53.00)
Started and Completed
(700 $93.00)
Total cost of units completed
Work in process, ending
Material (500 $40.00)
Conversion (150 $53.00)
Total costs

TOTAL

Materials

Conversion
Costs

$17,400
97,820
$115,220

$17,400
4,770
$4,770
65,100
87,270

$28,000

37,100

27,950
20,000
7,950
$115,220

*PROBLEM 4-52B (Continued)


B. TRICYCLES
Physical
Units

Quantities
Units to be accounted for
Work in process, beginning
Started into production
Total units
Units accounted for
Work in process,
beginning
Started and completed
Work In process, ending
Total units

100
900
1,000
100
700
200
1,000

(1) Equivalent unitsMaterials


Physical
Units
Work in process, beg
Started and completed
Work in process, end
Total

100
700
200
1,000

Materials
Added
This Period
0%
100%
100%

Equivalent
Units
0
700

200
900

Equivalent unitsConversion
Physical
Units
Work in process, beg
Started and completed
Work in process, end
Total

100
700
200
1,000

Conversion
Added
This Period
25%
100%
40%

Equivalent
Units
25
700
80
805

*PROBLEM 4-52B (Continued)


(2) Unit costs

Costs in the month (a)


Equivalent units (b)
Unit costs [(a) (b)]

Materials

Conversion

$63,000
900
$70.00

$76,4751
805
$95.00

Direct Labour $31,060 + Manufacturing Overhead $45,415

(3)
Costs
Costs to be accounted for:
Work in process, beginning
Added this period
Total costs
Cost accounted for as follows:
Work in process, beginning
Complete beginning WIP
Material (0 $70.00)
Conversion (25 $95.00)
Started and Completed
(700 $165.00)
Total cost of units completed
Work in process, ending
Material (200 $70.00)
Conversion (80 $95.00)
Total costs

TOTAL

Materials

Conversion
Costs

8,000
139,475
$147,475

$8,000
2,375
$2,375
115,500
125,875

$49,000

66,500

21,600
14,000
7,600
$147,475

*PROBLEM 4-52B (Continued)


(b)

NATIONAL COMPANY
Production Cost ReportBicycles
For the Month Ended May31

Quantities
Units to be accounted for
Work in process, beginning
Started into production
Total units
Units accounted for
Completed and transferred out
Work in process, beginning
Started and completed
Work In process, ending
Total units

Physical
Units

Equivalent Units
Conversion
Materials
Costs

300
1,200
1,500
300
700
500
1,500

0
700
500
1,200

90
700
150
940

Costs

Materials

Conversion

Unit costs (Step 3)


Costs in the month (a)
Equivalent units (b)
Unit costs [(a) (b)]

$48,000
1,200
$40.00

$49,820
940
$53.00

Costs to be accounted for


Work in process, beginning
Started into production
Total costs
Cost Reconciliation Schedule (Step 4)
Costs accounted for
Transferred out
Work in process, beginning
Conversion costs to complete
beginning inventory (90 $53.00)
Started and completed (700 $93.00)
Work in process, ending
Materials (500 $40)
Conversion costs (150 $53.00)

$17,400
97,820*
$115,220

$17,400
4,770
65,100
$20,000
7,950

$87,270

27,950
$115,220

*($50,000 + $25,200 + $30,000)

PROBLEM 4-53B

(a)
Quantities
Units to be accounted for
Work in process, beginning
Started this period
Total units
Units accounted for
Started and completed
Work In process, ending
Materials (100%)
Conversion (40%)
Total equivalent units (m)
Costs added this period
Cost per equivalent unit [(s) (t)]

(d)
Costs
Costs to be accounted for:
Work in process, beginning
Added this period
Total costs
Cost accounted for as follows:
Started and Completed
(40,000 $18.00)
Work in process, ending
Material (2,500 $12.00)
Conversion (1,000 $6.00)
Total costs

Physical
Units

Equivalent Units
Conversion
Materials
Costs

0
42,500
42,500

40,000
2,500

40,000

40,000

2,500
42,500
$18.00

1,000
42,500 (b) 41,000
$510,000
$246,000
$12.00 (c)
$6.00

TOTAL

Materials

Conversion
Costs

$
0
$756,000
$756,000

$510,000
$510,000

$246,000
$246,000

$480,000

$240,000

$720,000
36,000

30,000
$756,000

$510,000

6,000
$246,000

PROBLEM 4-53B (Continued)


(e)

BICNELL CORPORATION
Molding Department
Production Cost Report
For the Month Ended January 31, 2012
Equivalent Units

Quantities

Physical
Units

Materials

(Step 1)
Units to be accounted for
Work in process, January 1
Started into production
Total units

0
42,500
42,500

Units accounted for


Transferred out
Work in process, January 31
Total units

40,000
2,500
35,000

Costs
Unit costs (Step 3)
Costs in January
Equivalent units
Unit costs (a) (b)
Costs to be accounted for
Work in process, January 1
Started into production
Total costs
Cost Reconciliation Schedule (Step 4)

Conversion
Costs

(Step 2)

40,000
2,500
35,000

Materials
(a) $510,000
(b) 42,500
$12

40,000
1,000 (2,500 40%)
41,000

Conversion
Costs
$246,000
41,000
$6

Total
$756,000
$18

$
0
756,000
$756,000

Costs accounted for


Transferred out (40,000 $18)
Work in process, January 31
Materials (2,500 $12)
Conversion costs (1,000 $6)
Total costs

$720,000
$30,000
6,000

36,000
$756,000

*PROBLEM 4-54B
Department A
Physical
Units

Quantities
Units to be accounted for
Work in process, beginning
Started into production
Total units
Units accounted for
Work in process,
beginning
Started and completed
Work In process, ending
Total units

1,000
2,600
3,600
1,000
2,000
600
3,600

(1) Equivalent unitsMaterials


Physical
Units
Work in process, beg
Started and completed
Work in process, end
Total

1,000
2,000
600
3,600

Materials
Added
This Period
0%
100%
100%

Equivalent
Units
0
2,000
600
2,600

Equivalent unitsConversion
Physical
Units

Conversion
Added
This Period

Equivalent
Units

Work in process, beg


Started and completed
Work in process, end
Total

1,000
2,000
600
3,600

40%
100%
30%

400
2,000
180
2,580

PROBLEM 4-54B (Continued)


Unit costs
Costs in the month (a)
Equivalent units (b)
Unit costs [(a) (b)]

Materials

Conversion

$64,000
2,600
$24.6154

$132,000
2,580
$51.1628

Costs
Costs to be accounted for:
Work in process, beginning
Added this period
Total costs
Cost accounted for as follows:
Work in process, beginning
Complete beginning WIP
Material (0 $24.6154)
Conversion (400 $51.1628)
Started and Completed
(2,000 $75.7782)
Total cost of units completed
Work in process, ending
Material (600 $24.6154)
Conversion (180 $51.1628)
Total costs

TOTAL

Materials

Conversion
Costs

$ 54,000
196,000
$250,000

$54,000
20,465
0
$20,465
151,557
226,022

$49,231

102,326

23,978
14,769
9,209
$250,000

(a) Work in ProcessDepartment B................................. 226,022


Work in ProcessDepartment A........................
226,022

PROBLEM 4-54B (Continued)


Department B
Physical
Units

Quantities
Units to be accounted for
Work in process, beginning
Transferred into production
Total units
Units accounted for
Work in process,
beginning
Transferred in and completed
Work In process, ending
Total units

200
3,000
3,200
200
2,700
300
3,200

(1) Equivalent unitsTransferred in


Physical
Units
Work in process, beg
Transferred in & completed
Work in process, end
Total

200
2,700
300
3,200

Materials
Added
This Period
0%
100%
100%

Equivalent
Units
0
2,700
300
3,200

Equivalent unitsConversion
Physical
Units
Work in process, beg
Transferred in & completed
Work in process, end
Total

200
2,700
300
3,200

Conversion
Added
This Period
70%
100%
40%

Equivalent
Units
140
2,700
120
2,960

PROBLEM 4-54B (Continued)


Unit costs
Costs in the month (a)
Equivalent units (b)
Unit costs [(a) (b)]

Transferred
-in
$226,022
3,000

Conversion

$75.3407

$202.7027

Costs
Costs to be accounted for:
Work in process, beginning
Transferred-in costs
Added in the month
Total costs
Cost accounted for as follows:
Work in process, beginning
Complete beginning WIP
Conversion (140 $202.7027)
Transferred-in & completed
Trans-in (2,700 $75.3407)
Conver. (2,700 $202.7027)
Total cost of units completed
Work in process, ending
Trans-in (300 $75.3407)
Conversion (120 $202.7027)
Total costs

$600,000
2,960

TOTAL

Transferre
d-in

Conversion
Costs

$ 55,000
226,022
600,000
$881,022

$55,000
28,379
$28,379
750,717
203,420
547,297
834,096
46,926
22,602
24,324
$881,022

PROBLEM 4-54B (Continued)


(b)

METHA CORPORATION
Department B
Production Cost Report
For the Month Ended September 30, 2012
Equivalent Units

Quantities
Units to be accounted for
Work in process, beginning
Transferred in
Total units
Units accounted for
Work in process, beginning
Transferred in & completed
Work in process, ending
Total units
Costs
Unit costs
Total costs for the month
Equivalent units
Unit costs (a) (b)
Costs to be accounted for
Work in process, beginning
Transferred in
Started into production
Total costs
Cost Reconciliation Schedule

Physical
Units

Transferr
ed in

Conversion
Costs


200
3,000
3,200
200
2.700
300
3,200

(a)
(b)

0
2,700
300
3,000

$226,022
3,000
$75.3407

140
2,700
120 (300 40%)
2,960
Total
$600,000
2,960
$202.7027

$826,022
$278.0434
$ 55,000
226,022
600,000
$881,022

Costs accounted for:


Transferred out:
Work in process, beginning
Complete beginning WIP (140 $202.7027)
Transferred in & completed (2,700 $278.0434)
Work in process, ending
Transferred in (300 $75.3407)
Conversion costs (120 $202.7027)
Total costs

$55,000
28,379
750,717
$22,602
24,324

$834,096

46,926
$881,022

PROBLEM 4-55B

1.

Raw Materials Inventory..............................................


Accounts Payable................................................
25,000

25,000

2.

Work in ProcessBlending........................................
Work in ProcessPackaging.....................................
Raw Materials Inventory......................................
28,070

18,930
9,140

3.

Factory Labour.............................................................
Wages Payable.....................................................
23,770

23,770

4.

Work in ProcessBlending........................................ 13,320


Work in ProcessPackaging..................................... 10,450
Factory Labour.....................................................
23,770

5.

Manufacturing Overhead............................................
Accounts Payable................................................
41,500

41,500

6.

Work in ProcessBlending (900 $25)....................


Work in ProcessPackaging (300 $25)..................
Manufacturing Overhead.....................................
30,000

22,500
7,500

7.

Work in ProcessPackaging.....................................
Work in ProcessBlending................................
44,940

44,940

8.

Finished Goods Inventory..........................................


Work in ProcessPackaging.............................
67,490

67,490

9.

Accounts Receivable...................................................
Sales......................................................................
90,000

90,000

Cost of Goods Sold.....................................................


Finished Goods Inventory...................................
62,000

62,000

PROBLEM 4-56B

Quantities
Units to be accounted for
Work in process, beginning
Started this period
Total units
Units accounted for
Started and completed
Work In process, ending
Materials (100%)
Conversion (40%)
(a)(1) Total equivalent units

Physical
Units
25,000
425,000
450,000

415,000
35,000

Costs
Costs to be accounted for:
Work in process, beginning
Added this period
Total costs for this period

415,000

415,000

35,000
450,000

14,000
429,000

$1,035,000

$214,500

$2.30

$0.50

TOTAL

Materials

Conversion
Costs

$45,500
1,204,000
$1,249,500

$29,000
1,006,000
$1,035,000

$16,500
198,000
$214,500

450,000

Costs for this period (see below)


(2) Cost per equivalent unit

Equivalent Units
Conversion
Materials
Costs

$2.80

PROBLEM 4-56B (Continued)

TOTAL
(b) Cost accounted for as follows:
Completed and transferred out
(415,000 $2.80)
$1,162,000
Work in process, ending
87,500
Material (35,000 $2.30)
Conversion (14,000 $0.50)
Total costs
$1,249,500
(c)

Materials

Conversion
Costs

$954,500

$207,500

80,500
$1,035,000

7,000
$214,500

CROSBY COMPANY
Assembly Department
Production Cost Report
For the Month Ended October 31, 2012
Equivalent Units

Quantities
Units to be accounted for
Work in process, October 1
Started into production
Total units
Units accounted for
Transferred out
Work in process, October 31
Total units

Physical
Units
(Step 1)

Materials

Conversion
Costs

(Step 2)

25,000
425,000
450,000

415,000
35,000
450,000

415,000
35,000
450,000

415,000
14,000 (40,000 40%)
429,000

PROBLEM 4-56B (Continued)


Costs
Materials
Unit costs (Step 3)
Costs in October
Equivalent units
Unit costs (a) (b)

(a) $1,035,000
(b) 450,000
$2.30

Conversion
Costs
$214,500
429,000
$0.50

Costs to be accounted for


Work in process, October 1
Started into production
Total costs

Total
$1,249,500
$2.80

$ 45,500
1,204,000
$1,249,500

Cost Reconciliation Schedule (Step 4)


Costs accounted for
Transferred out (415,000 $2.80)
Work in process, October 31
Materials (35,000 $2.30)
Conversion costs (14,000 $.50)
Total costs

$1,162,000
$80,500
7,000

87,500
$1,249,500

PROBLEM 4-57B

(a)
Quantities
Units to be accounted for
Work in process, beginning
Started this period
Total units
Units accounted for
Started and completed
Work In process, ending
Materials (100%)
Conversion (25%)
(1) Total equivalent units

Physical
Units
500
1,500
2,000

1,200
800

Costs
Costs to be accounted for:
Work in process, beginning
Added this period
Total costs

1,200

1,200

800
2,000

200
1,400

$65,000

$70,000

$32.50

$50.00

TOTAL

Materials

Conversion
Costs

$33,000
102,000
$135,000

$15,000
50,000
$65,000

2,000

Costs for this period (see below)


(2) Cost per equivalent unit

Equivalent Units
Conversion
Materials
Costs

$82.50

$18,000
52,000
$70,000

PROBLEM 4-57B (Continued)


(3) Cost accounted for as follows:
Started and Completed
(1,200 $82.50)
Work in process, ending
Material (800 $32.50)
Conversion (200 $50.00)
Total costs

(b)

$99,000
36,000

$39,000
26,000

$135,000

$65,000

SARKU COMPANY
Bicycle Department
Production Cost Report
For the Month Ended May 31, 2012
Equivalent Units

Quantities

$60,000

Physical
Units

Materials

(Step 1)
Units to be accounted for
Work in process, May 1
Started into production
Total units

500
1,500
2,000

Units accounted for


Transferred out
Work in process, May 31
Total units

1,200
800
2.000

Conversion
Costs

(Step 2)

1,200
800
2,000

1,200
200
1,400

10,000
$70,000

PROBLEM 4-57B (Continued)

Costs
Unit costs (Step 3)
Costs in May
Equivalent units
Unit costs (a) (b)

(a)
(b)

Materials

Conversion
Costs

$65,000
2,000
$32.50

$70,000
1,400
$50.00

Costs to be accounted for


Work in process, May 1
Started into production
Total costs

Total
$135,000
$82.50

$
33,000
102,000
$135,000

Cost Reconciliation Schedule (Step 4)


Costs accounted for
Transferred out (1,200 $82.50)
Work in process, May 31
Materials (800 $32.50)
Conversion costs (200 $50)
Total costs

$99,000
$26,000
10,000

36,000
$135,000

PROBLEM 4-58B

(a)
Quantities
Units to be accounted for
Work in process, beginning
Started this period
Total units
Units accounted for
Started and completed
Work In process, ending
Materials (2/3)
Conversion (1/3)
Total equivalent units

Physical
Units

Equivalent Units
Conversion
Materials
Costs

10,000
100,000
110,000

95,000
15,000

95,000

95,000

10,000
110,000

Costs for this period (see below)

105,000

5,000
100,000

$156,000

$98,000

Cost per equivalent unit

$2.4657

$1.4857

$0.9800

(b) Costs
Costs to be accounted for:
Total costs

$254,000

$156,000

$98,000

$234,242
19,757

$141,142

$93,100

Cost accounted for as follows:


Transferred out
(95,000 $2.4657)
Work in process, ending
Material (10,000 $1.4857)
Conversion (5,000 $0.98)
Total costs

14,857
$253,999

$155,999

4,900
$98,000

*PROBLEM 4-59B

(a)

A. HOCKEY PUCKS
Physical
Units

Quantities
Units to be accounted for
Work in process, beginning
Started into production
Total units
Units accounted for
Work in process,
beginning
Started and completed
Work In process, ending
Total units

500
1,600
2,100
500
1,000
600
2,100

(1) Equivalent unitsMaterials


Physical
Units
Work in process, Aug 1
Started and completed
Work in process, Aug 31
Total

500
1,000
600
2,100

Materials
Added
This Period
0%
100%
100%

Equivalent
Units
0
1,000
600
1,600

Equivalent unitsConversion
Physical
Units
Work in process, Aug 1
Started and completed
Work in process, Aug 31
Total

500
1,000
600
2,100

Conversion
Added
This Period
40%
100%
50%

Equivalent
Units
200
1,000
300
1,500

*PROBLEM 4-59B (Continued)


(2) Unit costs

Costs in August (a)


Equivalent units (b)
Unit costs [(a) (b)]

(3) Costs
Costs to be accounted for:
Work in process, beginning
Added this period
Total costs
Cost accounted for as follows:
Work in process, beginning
Complete beginning WIP
Material (0 $1.00)
Conversion (200 $1.45)
Started and Completed
(1,000 $2.45)
Total cost of units completed
Work in process, ending
Material (600 $1.00)
Conversion (300 $1.45)
Total costs

Materials

Conversion

$1,600
1,600
$1.00

$2,175
1,500
$1.45

TOTAL

Materials

Conversion
Costs

$1,125
3,775
$4,900

$1,600

$2,175

$1,125
290
--290
2,450
3,865

1,000

1,450

1,035
600
435
$4,900

*PROBLEM 4-59B (Continued)


B. SOCCER BALLS
Physical
Units

Quantities
Units to be accounted for
Work in process, beginning
Started into production
Total units
Units accounted for
Work in process,
beginning
Started and completed
Work In process, ending
Total units

200
2,000
2,200
200
1,850
150
2,200

(1) Equivalent unitsMaterials


Physical
Units
Work in process, Aug 1
Started and completed
Work in process, Aug 31
Total

200
1,850
150
2,200

Materials
Added
This Period
0%
100%
100%

Equivalent
Units
0
1,850
150
2,000

Equivalent unitsConversion
Physical
Units
Work in process, Aug 1
Started and completed
Work in process, Aug 31
Total

200
1,850
150
2,200

Conversion
Added
This Period
20%
100%
70%

Equivalent
Units
40
1,850
105
1,995

*PROBLEM 4-59B (Continued)


(2) Unit costs

Costs in August (a)


Equivalent units (b)
Unit costs [(a) (b)]

(3) Costs
Costs to be accounted for:
Work in process, beginning
Added this period
Total costs
Cost accounted for as follows:
Work in process, beginning
Complete beginning WIP
Material (0 $1.30)
Conversion (40 $1.00)
Started and Completed
(1,850 $2.30)
Total cost of units completed
Work in process, ending
Material (150 $1.30)
Conversion (105 $1.00)
Total costs

Materials

Conversion

$2,600
2,000
$1.30

$1,995
1,995
$1.00

TOTAL

Materials

Conversion
Costs

$450
4,595
$5,045

$2,600

$1,995

$450
40
0
40
4,255
4,745

2,405

1,850

300
195
105
$5,045

*PROBLEM 4-59B (Continued)


(b)
MALONEY COMPANY
Production Cost ReportHockey pucks
For the Month Ended August 31

Quantities
Units to be accounted for
Work in process, August 1
Started into production
Total units
Units accounted for
Completed and transferred out
Work in process, August 1
Started and completed
Work in process, August 31
Total units
Costs
Unit costs (Step 3)
Costs in August (a)
Equivalent units (b)
Unit costs [(a) (b)]
Costs to be accounted for
Work in process, August 1
Started into production
Total costs
Cost Reconciliation Schedule
Costs accounted for
Transferred out
Work in process, August 1
Conversion costs to complete
beginning inventory (200 $1.45)
Started and completed
(1,000 $2.45)
Work in process, August 31
Materials (600 $1)
Conversion costs (300 $1.45)
*($1,600 + $1,175 + $1,000)

Physical
Units

Equivalent Units
Conversion
Materials
Costs

(Step 1)

(Step 2)

500
1,600
2,100
500
1,000
600
2,100

0
1,000
600
1,600

200
1,000
300
1,500

Materials

Conversion
Costs

$1,600
1,600
$1.00

$2,175
1,500
$1.45
$1,125
3,775*
$4,900

$1,125
290
2,450
$ 600
435

$3,865
1,035
$4,900