Cost Acctg Chapter-10

1
CHAPTER 10
Answers to Multiple Choice – Theoretical
1. b 5. b 9. c
2. c 6. C 10. A
3. b 7. C 11. D
4. b 8. C
Solutions to Multiple Choice – Computational
1. (d)
Units started in process 95,000
Units in process, end - Dept. 1 ( 21,000)
Units in process, end - Dept. 2 ( 12,000)
Units transferred out to finished goods 62,000
2. (a)
Units in process, beginning 6,000
Units placed in process 14,000
Units in process, end (4,200)
Units transferred out to Dept. 2 15,800
3. (a)
Units completed and transferred out (100%) 29,000
Units in process, end (3,000 x 80%) 2,400
Equivalent units of production – Materials 31,400
4. (a)
P188,400 / 31,400 = P6.00
5. (a)
Units transferred to finished goods (100%) 4,300
Ending work in process (400 x 25%) 100
Equivalent units of production 4,400
6. (a)
P14,080 / 4,400 = P3.20
7. (a)
100 x P3.20 = P320
8. (a)
Units placed in production 73,000
Units transferred out to next department (67,000)
Units in ending work in process 6,000
2
9. (a)
Units transferred out to next department (100%) 67,000
Units in ending work in process (6,000 x 1/3) 2,000
Equivalent units of production – overhead 69,000
10. (b)
P282,900 / 69,000 = P4.10 x 67,000 = P274,700.
11. (a)
2,000 EUP x P4.10 = P8,200
12. (a)
Units completed and transferred out (100%) 3,620
Units completed and on hand (100%) 80
Units in ending work in process (200 x 65%) 130
Equivalent units of production 3,830
Unit cost = (P27,193 / 3,830) P7.10
Labor ost of units transferred out: (3,620 x P7.10) P25,702
13. (a)
80 x P7.10 = P568
14. (a)
Units started into production 3,900
Units completed 3,700
Units in process, end 200
15. (a)
130 x P7.10 = P923
16. (a)
Materials are added in Department 1.
17. (c)
Units transferred out to finished goods (100%) 61,400
Equivalent units of production – conversion cost 74,792
18. (b)
Equivalent units of production:
Units finished and transferred to finished goods 28,000
EUP 31,150
Unit cost:
Transferred in cost: (P24,050 / 37,000) P0.65
This department: (P18,690 / 31,150) 0.60
3
Units in process, end:

Transferred in cost: (9,000 x P0.65) P5,850
Cost this department: (3,150 x P0.60) 1,890
Cost of units in process, end P7,740
19. (b)
Materials:
Units finished and transferred out 48,000
Ending work in process 12,000
EUP 60,000
Conversion cost:
Units finished and transferred out 48,000
Ending work in process (12,000 x 70%) 8,400
EUP 56,400
Unit costs:
Transferred in cost: (P24,750 / 55,000) P0.45
This department:
Materials; (P7,200 / 60,000) P0.12
CC: (P53,580 / 56,400) 0.95 0.95
Total unit cost P1,52
20. (b)
Materials:
Units transferred out (15,000 – 3,000) 12,000
Units in process, end -0-
EUP 12,000
Conversion cost:
Units transferred out 12,000
Units in process, end (3,000 x 2/3) 2,000
EUP 14,000
Cost of units transferred out:

Transferred in; (P13,500 / 15,000) P0.90
Materials: (12,000 x 4 x P.02) = P960 / 12,000 0.08
Conversion cost: (P14,210 / 14,000) 1.015
Cost of units transferred out: (12,000 x P1.995) P23,940
21. (d)
Materials:
Ending units in process:
10% x 70,000 = 7,000 -0–
4
40% x 70,000 = 28,000 -0–

15% x 70,000 = 10,500 10,500
35% x 70,000 = 24,500 24,500 35,000
EUP 565,000
Conversion cost:
Ending units process:
7,000 x 30% 2,100
28,000 x 60% 16,800
10,500 x 75% 7,875
24,500 x 85% 20,825 47,600
EUP 577,600
Unit cost:
Transferred in: (P300,000 / 500,000) P . 60
Materials: (P559,350 / 565,000) .99
Total unit cost P2.64
Cost of ending work in process:

Transferred in: (70,000 x P0.60) P 42,000
Materials: (35,000 x P0.99) 34,650
Conversion cost: (47,600 x P1.05) 49,980
Total P126,630
22. (a)
Transferred in cost: (32,000 x P8.39( P268,480
Cost added:
Direct labor: (20,000 x P3.19) P63,800
Overhead: (20,000 x P1.20) 24,000 87,800
Cost to account for P356,280
23. (b)
Unit cost from preceding department: (P391,500 / 78,300) P 5.00
Unit cost this department:
Direct materials P 1.23
Conversion costs 2.50 3.73
Total unit costs P 8.73
Total units to account for 78,300

Units transferred in: (P508,959 / P8.73) 58,300
Units in process, end 20,000
Total cost to account for:

Units transferred to finished goods P508,959
Transferred in cost (20,000 x P5.00) P100,000
Cost added this department:
5
DM: (20,000 x P1.23) 24,600

CC: (20,000 x 45%) x P2.50 22,500 147,100
Total cost to account for P656,059
24. (a)
P1,480,000 / 10,000 units = P148
25. (a)
Materials:
EUP 10,000
Conversion cost:
Units in process, end (1,000 x50%) 500
EUP 9,500
Unit costs:
Materials: (P720,000 / 10,000) P72
Conversion cost: (760,000 / 9,500) 80
26. (a)
Equivalent units of production: Chemical P Chemical Q
Materials:
Completed and transferred out 35,000 35,000
Ending work in process:
Chemical P: (15,000 x 100%) 15,000
Chemical Q: - 0 -
EUP 50,000 35,000
Conversion cost:
Completed and transferred out 35,000
Ending work and process; (15,000 x 2/3) 10,000
EUP 45,000
Unit costs:
Materials:
Chemical P: (P250,000 / 50,000) P 5.00
Chemical Q: (P70,000 / 35,000) 2.00
Completed and transferred out: (35,000 x P10) P350,000
27. (a)
Ending work in process::
Materials: Chemical P (15,000 x P5) P 75,000
Conversion cost: (10,000 x P3) 30,000
6
Cost of ending work in process P105,000
Problem 10-1
D E P A R T M E N T S
1 2 3 4 5
Units started in process 10,000 - - - -
Units transferred in - (b) 4,000 3,000 (c) (g) 2,100
2,400
Units to account for 10,000 4,000 3,000 2,400 2,100
Transferred to next (a) 4,000 3,000 (d) 2,400 (f) 2,100 -

department
Transferred to finished goods - - - - (h) 1,600
Ending work in process 6,000 (c) 1,000 600 300 500
Units accounted for 10,000 4,000 3,000 2,400 2,100
PROBLEM 10-2
Dept. A Dept. B Dept. C

Materials:
Transferred out (100%) 15,000 12,000 9,000
EUP 25,000 12,000 9,000
Conversion cost:
Transferred out 15,000 12,000 9,000
Ending work in process 7,500 1,500 900
EUP 22,500 13,500 9,900
Problem 10-3
Materials:
Units transferred out: (50,000 – 10,000) 40,000
10,000 x 25% = 2,500 x 20% 500
10,000 x 30% = 3,000 x 50% 1,500
10,000 x 25% = 2,500 x 80% 2,000
10,000 x 20% = 2,000 x 100% 2,000 6,000
EUP 46,000
Conversion cost:
7

2,500 x 35% 875
3,000 x 55% 1,650
2,500 x 80% 2,000
2,000 x 95% 1,900 6,425
EUP 46,425
Problem 10-4
1. Equivalent units of production

Materials:
Units transferred out: (13,000 – 2,000) 11,000
Units in process, end -0–
EUP 11,000
Conversion cost:
Units in process, end (2,000 x 45%) 900
EUP 11,900
2. Department 2
Cost of Production Report
Month of July 31, 2010
Quantity Schedule: Units

Transferred in 13,000
Transferred out 11,000

Work in process, end 2,000
Total accounted for 13,000
Cost Schedule Total Cost EUP Unit Cost

Cost transferred in P16,120 ÷ 13,000 = P1.24
Cost added in this dept.
Materials 2,860 ÷ 11,000 = 0.26
CC 9,996 ÷ 11,900 = 0.84
Total cost to account for P28,976 P2.34
Cost accounted for:

Transferred out P25,740 = 11,000 x P2.34
Work in process, end:
Cost transferred in 2,480 = 2,000 x 1.24
Cost added:
CC 756 = 900 x 0.84
Total cost accounted for P28,976
8
Problem 10-5
1. Equivalent Units of Production Dept. 1 Dept. 2
Materials:
Units transferred out (100 %) 60,000 55,000
Ending units in process 15,000 -0-
EUP 75,000 55,000
Conversion cost:
Units transferred out 60,000 55,000
Ending units in process 9,000 4,000
EUP 69,000 59,000
2. Department 1
Month of January, 2010
Quantity Schedule Units

Units started in process 75,000


Direct materials P300,000 ÷ 75,000 = P4.00
Conversion costs 258,750 ÷ 69,000 = 3.75

Materials 60,000 = 15,000 x 4.00
CC 33,750 = 9,000 x 3.75
Total accounted for P558,750
Department 2
Month of January, 2010

Units transferred in 60,000


Transferred in cost P465,000 ÷ 60,000 = P 7.75
Cost added this department: CC 243,375 ÷ 59,000 = 4.125
9

Transferred in 38,750 = 5,000 x 7.75
Cost added: CC 16,500 = 4,000 x 4.125
Problem 10-6
(1) Equivalent Units of Production Dept. 1 Dept. 2 Dept. 3

Materials:
Units transferred out 125,000 115,000 112,000
Units in process, end 25,000 - 0 - - 0 -
EUP 150,000 115,000 112,000
Conversion Costs
Units transferred out 125,000 115,000 112,000
Units in process, end 10,000 1,000 2,700
EUP 135,000 116,000 114,700
(2) Cost of Production Reports:
Department 1:
Started in process 150,000


Materials P21,000 ÷ 150,000 = P0.14
Conversion costs 24,300 ÷ 135,000 = 0.18

Materials 3,500 = 25,000 x 0.14
Conversion cost 1,800 = 10,000 x 0.18
Department 2

10

Transferred in cost P40,000 ÷ 125,000 = P0.32
Conversion cost 34,800 ÷ 116,000 = 0.30
Transferred out P71,300 = 115,000 = P0.62

Transferred in cost 3,200 = 10,000 = 0.32
Cost added this dept. – CC 300 = 1,000 = 0.30
Problem 10-6 (continued):
Department 3

Cost Schedule Total cost EUP Unit Cost

Transferred out to finished goods P92,960 = 112,000 x P0.83

Transferred in cost 1,860 = 3,000 x 0.62
Cost added this dept.: CC 567 = 2,700 x 0.21
Problem 10-7
1. Equivalent Units of Production Dept. 1 Dept. 2

Materials:
Transferred out 15,000 7,000
Completed and on hand - 1,000
Ending work in process 8,000 - 0-
EUP 23,000 8,000
Conversion cost:
Transferred out 15,000 7,000
Completed and on hand - 1,000
Ending work in process 6,500 5,250
EUP 21,500 13,250
11
2. Cost of Production Report
Department 1


Direct materials P12,650 ÷ 23,000 = P0.55
Conversion cost 18,705 ÷ 21,500 = 0.87

Ending work in process: DM 4,400 = 8,000 x 0.55
CC 5,655 = 6,500 x 0.87
Problem 10-7 (Continued)
Department 2

Transferred out to finished goods 7,000

Completed and on hand 1,000

Transferred in cost P21,300 ÷ 15,000 = P 1.42
Total cost to account for P37,730 P 2.66
Transferred out to finished goods P18,620 = 7,000 x P 2.66

Completed and on hand 2,660 = 1,000 x 2.66
Transferred in cost 9,940 = 7,000 x 1.42
Cost added this dept.: CC 6,510 = 5,250 x 1.24
Problem 10-8
1. Equivalent Units of Production:
Materials: 101 102 103 104

Transferred out 250,000 250,000 250,000 250,000
12

50,000 x 30% = 15,000 15,000 15,000 - -
50,000 x 35% = 17,500 17,500 17,500 - -
50,000 x 15% = 7,500 7,500 7,500 7,500 -
50,000 x 20% = 10,000 10,000 10,000 10,000 10,000
EUP 300,000 300,000 17,500 10,000
Conversion Cost:
15,000 x 45% 6,750
17,500 x 50% 8,750
7,500 x 65% 4,875
10,000 x 98% 9,800
EUP 280,175
2. Unit costs:
Materials:
101: (P6,000 / 300,000) P0.02
102: (P3,000 / 300,000) 0.01
103: (P9,362.50 / 267,500) 0.035
104: (P13,000 / 260,000) 0.05 P0.115
Conversion cost: (P117,763.50 / 280,175) 0.42
Total unit costs P0.535
Problem 10-8 (Continued):
Cost of ending work in process inventory:

Materials:
101: (50,000 x P0.02) P 1,000.00
102: (50,000 x P0.01) 500.00
103: (17,500 x P0.035) 612.50
104: (10,000 x P0.05) 500.00
Total P 2,612.50
Conversion cost: (30,175 x P0.42) 12,673.50
Total cost P15,286.00
Problem 10-9
1. Equivalent Units of Production:
Assembly Department:
Materials:
Transferred out to next department 1,860
Ending work in process (100%) 140
EUP 2,000
13
Conversion cost:
Ending work in process: (140 x 75%) 105
EUP 1,965
Finishing Department:
Materials and overhead:
EUP 1,824
Labor:
EUP 1,806
2. Peninsula Company – Assembly Department

Month of August


Work in process, end 140

Materials P30,000.00 ÷ 2,000 = P15.00
Labor 29,670.00 ÷ 1,965 = 15.10
Overhead 18,830.00 ÷ 1,965 = 9.58
Total cost to account for P78,500.00 P39.68
Transferred out to next department P73,808.00* = 1.860 x P39.68

Materials 2,100.00 = 140 x 15.00
Labor 1,586.00 = 105 x 15.10
Overhead 1,006.00 = 105 x 9.58
Total work in process 4,692.00
Total cost accounted for P78,500.00
*P3 adjustment for rounding.
Peninsula Company – Finishing Department

Month of August

Transferred in from prior department 1,860
14


Transferred in cost from prior dept. P 73,808.00 ÷ 1,860 = P39.68
Materials 68,000.00 ÷ 824 = 37.28
Labor 13,660.00 ÷ 1,806 = 7.57
Overhead 7,825.00 ÷ 1,824 = 4.29
Total cost to account for P163,298.00 P88.82
Transferred out to finished goods P159,874.00* = 1,800 x P88.82

Transferred in cost 2,381.00 = 60 x 39.68
Cost added this dept.:
Materials 895.00 = 24 x 37.28
Labor 45.00 = 6 x 7.57
Overhead 103.00 = 24 x 4.29
Total cost of work in process 3,424.00
Total costs accounted for P163,298.00
*P2 Rounding adjustment
3. Work in process – Assembly Department 78,500
Work in process – Finishing Department 89,490
Materials 98,000
Factory payroll 43,330
Factory overhead control 26,660
To record allocation of production cost.
4. Work in process – Finishing Department 73,808

Work in process – Assembly Department 73,808
To record transfer of goods from Assembly to
Finishing Department.
5. Finished goods 159,874

To record completion of goods transferred to finished
Goods inventory.
Problem 10-10
1. Equivalent Units of Production

Trimming Assembly Finishing
Department Department Department
Materials:
Work in process, end 600 380 160
EUP 6,000 5,380 4,960
15
Labor:
EUP 5,760 5,300 4,980
Overhead:
EUP 5,760 5,340 4,960
2. Trimming Department
Month of June, 2010



Materials P33,600 ÷ 6,000 = P 5.60
Labor 18,500 ÷ 5,760 = 3.21180
Overhead 9,217 ÷ 5,760 = 1.60017
Total costs to account for P61,317 P10.41197
Transferred out to next department P56,225 = 5,400 x P10.41197

Materials 3,360 = 600 x 5.60
Labor 1,156 = 360 x 3.21180
Overhead 576 = 360 x 1.60017
Total work in process 5,092
Total costs accounted for P61,317
Assembly Department
Month of June, 2010



16

Materials 16,786 ÷ 5,380 = 3.12007
Labor 14,840 ÷ 5,300 = 2.80
Overhead 7,120 ÷ 5,340 = 1.33333
Total costs to account for P94,971 P17.66543
Transferred out to next department P88,328* = 5,000 x P17.66543

Transferred in cost 4,164 = 400 x 10.41203
Materials 1,186 = 380 x 3.12007
Labor 840 = 350 x 2.80
Overhead 453 = 340 x 1.33333
P1 difference due to rounding
Finishing Department
Month of June, 2010



Transferred in cost from prior dept. P 88,328 ÷ 5,000 = P17.66560
Materials 6,400 ÷ 4,960 = 1.29032
Labor 10,320 ÷ 4,980 = 2.07228
Overhead 4,960 ÷ 4,960 = 1.00
Total costs to be accounted for P110,008 P22.02820
Transferred out to finished goods P105,735 = 4,800 x P22.02920

Transferred in cost 3,533 = 200 x 17.66560
Materials 207 = 160 x 1.29032
Labor 373 = 180 x 2.07228
Overhead 160 = 160 z 1.00
3a. Work in process – Trimming Department 61,317

Materials 56,786
17
Factory payroll 43,660

Factory overhead control 21,297
To record manufacturing costs.
3b. Work in process – Assembly Department 56,225

Work in process – Trimming Department 56,225
To record transfer of goods from Trimming to
Assembly Department.
3c. Work in process – Finishing Department 88,328

To record transfer of goods from Assembly
To Finishing Department.
3c. Finished goods I 105,735

To record completion of finished goods.

Cost Acctg Chapter-10

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Cost Acctg Chapter-10

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1

Answers to Multiple Choice – Theoretical

Solutions to Multiple Choice – Computational

Unit cost = (P27,193 / 3,830) P7.10

Labor ost of units transferred out: (3,620 x P7.10) P25,702

Units in process, end:

Cost of units transferred out:

40% x 70,000 = 28,000 -0–

Cost of ending work in process:

Total units to account for 78,300

Total cost to account for:

DM: (20,000 x P1.23) 24,600

Completed and transferred out: (35,000 x P10) P350,000

Cost of ending work in process P105,000

Transferred to next (a) 4,000 3,000 (d) 2,400 (f) 2,100 -

Dept. A Dept. B Dept. C

Units transferred out 40,000

1. Equivalent units of production

Quantity Schedule: Units

Transferred out 11,000

Cost Schedule Total Cost EUP Unit Cost

Cost accounted for:

Quantity Schedule Units

Units transferred out 60,000

Cost Schedule Total Cost EUP Unit Cost

Transferred out P465,000 = 60,000 x P7.75

Quantity Schedule Units

Units transferred out 55,000

Cost Schedule Total Cost EUP Unit Cost

Total cost to account for P708,375 P11.875

Transferred out P653,125 = 55,000 x P11.875

(1) Equivalent Units of Production Dept. 1 Dept. 2 Dept. 3

(2) Cost of Production Reports:

Transferred out 125,000

Cost Schedule Total Cost EUP Unit Cost

Transferred out P40,000 = 125,000 x P0.32

Transferred out 115,000

Cost Schedule Total Cost EUP Unit Cost

Transferred out P71,300 = 115,000 = P0.62

Problem 10-6 (continued):

Transferred out 112,000

Cost Schedule Total cost EUP Unit Cost

Transferred out to finished goods P92,960 = 112,000 x P0.83

1. Equivalent Units of Production Dept. 1 Dept. 2

2. Cost of Production Report

Transferred out 15,000

Cost Schedule Total Cost EUP Unit Cost

Transferred out P21,300 = 15,000 x P1.42

Quantity Schedule Units

Transferred out to finished goods 7,000

Cost Schedule Total Cost EUP Unit Cost

Transferred out to finished goods P18,620 = 7,000 x P 2.66

1. Equivalent Units of Production:

Materials: 101 102 103 104

Ending units in process:

Problem 10-8 (Continued):

Cost of ending work in process inventory:

1. Equivalent Units of Production:

2. Peninsula Company – Assembly Department

Quantity Schedule Units

Transferred out to next department 1,860

Cost Schedule Total Cost EUP Unit Cost

Transferred out to next department P73,808.00* = 1.860 x P39.68

Peninsula Company – Finishing Department