S20-3

What was the conversion cost for Evergreen Orange’s Tampa operation last month?

Solution:

Conversion Costs = Direct labor + Manufacturing overhead

= $32,000 + $125,000
= $157,000

S20-4

For each separate assumptions, calculate the equivalent units of production for conversion costs
in the ending Work-in-Process Inventory for the Assembly Department:

Solution:

1.
Equivalent Units = Completed Units x Percentage of Work-in-Process Completed
= 12,000 x 60%
= 7,200

2.
Equivalent Units = Completed Units x Percentage of Work-in-Process Completed
= 21,000 x 40%
= 8,400

E20-17

For each products or services, indicate if the cost would most likely be determined using a job order
costing system or a process costing system.

Solution:

a. Process costing system

b. Job order costing system
c. Job order costing system
d. Process costing system
e. Process costing system
f. Process costing system
g. Job order costing system
h. Process costing system

E20-19

Complete the missing amounts in the T-accounts.

1
Solution:

Work-in-Process—Cutting
Balance, May 1 0 (a)85,000 Transfer out to WIP Finishing
Direct Materials 57,000
Direct labor 5,000
Manufacturing Overhead 39,000

Balance, May 31 16,000

Work-in-Process—Finishing
Balance, May 1 11,000 80,000 Transfer out to WIP Packaging
Transfer in from WIP Cutting (b) 85,000
Direct materials 21,000
Direct labor (c) 13,000
Manufacturing Overhead 18,000

Balance, May 31 68,000

Work-in-Process—Packaging
Balance, May 1 4,000 (d) 100,000 Transfer out to FG Inventory
Transfer in from WIP Finishing (e) 80,000
Direct materials 1,000
Direct labor 9,000
Manufacturing Overhead 14,000

Balance, May 31 8,000

Finished Goods Inventory

Balance, May 1 0 (f) 98,000 Transfer out to COGS
Transfer in from WIP Packaging (g) 100,000

Balance, May 31 2,000

Cost of Goods Sold

Balance, May 1 0
Transfer in from (h) 98,000

Balance, May 31 (i) 98,000

Solutions Calculations
a. 85,000 (57,000+5,000+39,000) - 16,000 = 85,000
b. 85,000 Transfer in from WIP Cutting, which is also 85,000
c. 13,000 (80,000+68,000) - 11,000 - 85,000 - 21,000 - 18,000 = 13,000
d. 100,000 (4,000+80,000+1,000+9,000+14,000) - 8,000 = 100,000
e. 80,000 Transfer in from WIP Finishing, which is 80,000
f. 98,000 100,000 - 2,000 = 98,000
g. 100,000 Transfer in from WIP Packaging, which is also 100,000
h. 98,000 Transfer in from Finished Goods, which is 98,000
i. 98,000 98,000 + 0 = 98,000