Exercise 17-24, 25, 26 (14th edition)

Given:
Tomlinson Corporation is a biotech company based in Milpitas. It makes a cancer-treatment drug in a single processi
department . Direct materials are added at the start of the process. Conversion costs are added evenly during the pr
Tomlinson Corporation uses the weighted-average method of process costing. The following information for July 201
available.
Equivalent Units
Physical Direct Conversion
Units Materials Costs
Work-in-process, July 1 (DM -- 100%; CC -- 25%) 8,700 8,700 2,175
Started during July 34,500
Completed and transferred out during July 32,000 32,000 32,000
Work-in-process, July 31 (DM -- 100%; CC -- 70%) 11,200 11,200 7,840

Total Costs for July 2014

Work in process, beginning
Direct materials $61,500
Conversion costs 43,200 $104,700
Direct materials added during July 301,380
Conversion costs added during July 498,624
Total costs to account for $904,704

Exercise 17-24 Weighted-average Method, assigning costs

Required:
1. Calculate cost per equivalent unit for direct materials and conversion costs.
2. Summarize the total costs to account for, and assign total costs to units completed (and transferred out) and to un
Exercise 17-25
1. Do Exercise 17-24 using the Fifo method.
2. Tomlinson's management seeks to have a more consistent cost per equivalent. Which method of process costing
company choose and why? W/A because the cost of the BI is mixed together with the costs added each per
Exercise 17-26 (14th edition)
Refer to the information in Exercise 17-24. Suppose Tomlinson determines standard cost of $8.60 per equivalent unit
materials and $13.50 per equivalent unit for conversion costs for both beginning work in process and work done in th
period.
Tomlinson Corporation
Equivalent Units
Tomlinson Corporation Cost of Production Report Physical Flow D/M
Degree of Completion
Added Beginning Evenly
Units to Account for: D/M Conversion
BWIP (7/1/14) 100% 25% 8,700
Started during July 34,500
Total 43,200
Units Accounted for: Work Done This Period
Completed Units 32,000
From BWIP 0% 75% 8,700 0
Started And Completed 100% 100% 23,300 23,300
EWIP 100% 70% 11,200 11,200
Total 43,200
Calculation of Equivalent Units
FIFO Equivalent Units (A) 34,500
Plus BWIP EU from previous period 8,700
Weighted Average Equivalent Units (B) 43,200

Costs to Account for: D/M

BWIP $61,500
Current Costs Added This Period (1) 301,380
Total (2) $362,880
Cost per Equivalent Unit:
FIFO (1) / (A) $8.736
Weighted Average (2) / (B) $8.400
Standard Cost $8.600
Costs Accounted for: Fifo Method
Costs Associated with Completed Units
From BWIP
Costs Assigned to BWIP $61,500
D/M $0
Conversion Costs
Total $61,500
From Units Started & Completed $203,541
Total Cost Associated with Units Transferred-out $265,041
Cost Assigned to EWIP Units
D/M Costs $97,839
Conversion Costs
Total Cost Assigned to EWIP $97,839
Total Costs Accounted for $362,880
Costs Accounted for: Weighted Average Method
Costs Associated with Completed Units 32,000 $268,800
Cost Assigned to EWIP Units
D/M Costs $94,080
Conversion Costs
Total $94,080
Total Costs Accounted for $362,880
Costs Accounted for: Standard Cost Method
Costs Associated with Completed Units
From BWIP
Costs Assigned to BWIP (assuming same std. costs values) $74,820
D/M $0
Conversion Costs
Total $74,820
From Units Started & Completed $200,380
Total Cost Associated with Units Transferred-out $275,200
Cost Assigned to EWIP Units
D/M Costs $96,320
Conversion Costs
Total Cost Assigned to EWIP $96,320
Total Standard Costs Accounted for $371,520
Standard Cost Variances
 Associated with BWIP and recognized last time period (favorable) (13,320)
Associated with current period (favorable) 4,680
Total cost accounted for $362,880

Journal Entries for FIFO, W/A, and Standard Cost Methods

Fifo Method
Dr Cr
Work-in-Process 301,380
DM Variances
Direct Materials Inventory 301,380
To record direct material usage.

Work-in-Process 498,624
Conversion Variances
Various Accounts 498,624
To record direct labor and MOH usage.

Finished Goods 703,076

Work-in-Process 703,076
To record the transfer production costs of completed
units to finished goods.

FIFO
WIP
104,700
301,380 703,076
498,624
201,628
nt drug in a single processing
added evenly during the process.
ng information for July 2014 is

Started & Completed

23,300
23,300

d transferred out) and to units in EWIP.

method of process costing should the

h the costs added each period.

of $8.60 per equivalent unit for direct

rocess and work done in the current

Tomlinson Corporation
Equivalent Units
Conversion

6,525 B
23,300 C
7,840 D
 37,665 B+C+D
2,175 A
39,840 A+B+C+D

Conversion Total
$43,200 $104,700 A
498,624 800,004 B,C,D
$541,824 $904,704 A,B,C,D

$13.238 $21.974
$13.600 $22.000
$13.500 $22.100

$43,200 $104,700 A
$0 B
$86,381 $86,381 B
$129,581 $191,081 $21.963
$308,455 $511,995 $21.974
$438,035 $703,076 $21.971

$97,839
$103,789 $103,789
$103,789 $201,628
$541,824 $904,704

$435,200 $704,000 $22.00 $704,000

$94,080
$106,624 $106,624
$106,624 $200,704
$541,824 $904,704

$29,363 $104,183
$0
$88,088 $88,088
$117,450 $192,270 $22.10 $192,270
$314,550 $514,930 $22.10 $514,930
$432,000 $707,200 $22.10 $707,200 $275,200 $432,000
$707,200
$96,320
$105,840 $105,840
$105,840 $202,160
$537,840 $909,360
 13,838 518
(9,854) (5,174)
$541,824 $904,704

Weighted Average Method Standard Cost Method

Dr Cr Dr Cr
301,380 296,700 $296,700
4,680
301,380 301,380

498,624 508,478 $508,478

9,854
498,624 498,624

704,000 707,200
704,000 707,200

Weighted Average Std. Cost

WIP WIP
104,700 104,183
301,380 704,000 296,700 707,200
498,624 508,478
200,704 202,160
Exercise 17-26
Given:
Tomlinson Corporation is a biotech company based in Milpitas. It makes a cancer-treatment drug in a single processi
department . Direct materials are added at the start of the process. Conversion costs are added evenly during the pr
Tomlinson Corporation uses the weighted-average method of process costing. The following information for July 201
available.
Equivalent Units
Physical Direct Conversion
Units Materials Costs
Work-in-process, July 1 (DM -- 100%; CC -- 25%) 8,700 8,700 2,175
Started during July 34,500
Completed and transferred out during July 32,000 32,000 32,000
Work-in-process, July 31 (DM -- 100%; CC -- 70%) 11,200 11,200 7,840

Total Costs for July 2011

Work in process, beginning
Direct materials $61,500
Conversion costs 43,200 $104,700
Direct materials added during July 301,380
Conversion costs added during July 498,624
Total costs to account for $904,704

Required:
Refer to the information in Exercise 17-24. Suppose Tomlinson determines standard cost of $8.60 per equivalent unit
materials and $13.50 per equivalent unit for conversion costs for both beginning work in process and work done in th
period.
Tomlinson Corporation
Equivalent Units
Tomlinson Corporation Cost of Production Report Physical Flow D/M
Degree of Completion
Added Beginning Evenly
Units to Account for: D/M Conversion
BWIP (7/1/14) 100% 25% 8,700
Started during July 34,500
Total 43,200
Units Accounted for:
Completed Units 32,000
From BWIP 0% 75% 8,700 0
Started And Completed 100% 100% 23,300 23,300
EWIP 100% 70% 11,200 11,200
Total 43,200
Calculation of Equivalent Units
FIFO Equivalent Units 34,500
Plus BWIP EU from previous period 8,700
Weighted Average Equivalent Units 43,200

Costs to Account for: D/M

BWIP $74,820
Standard Costs Added This Period 296,700
 Total $371,520
Standard Cost per Equivalent Unit: $8.600
$8.600
$8.600
Costs Accounted for: Standard Cost Method
Costs Associated with Completed Units
From BWIP
Costs Assigned to BWIP (assuming same std. costs values) $74,820
D/M $0
Conversion Costs
Total $74,820
From Units Started & Completed $200,380
Total Cost Associated with Units Transferred-out $275,200
Total Cost Associated with Units Transferred-out $275,200
Cost Assigned to EWIP Units
D/M Costs $96,320
Conversion Costs
Total Cost Assigned to EWIP $96,320
Total Standard Costs Accounted for $371,520

2. Calculate the Standard Cost Variances D/M

Associated with BWIP and recognized last time period
Actual costs assigned to BWIP under FIFO and weighted average methods $61,500
Standard Costs assigned to BWIP (assuming standards have not changed) 74,820
Total standard cost variances recognized in previous period (favorable) ($13,320)
Associated with current period (unfavorable)
Actual costs assigned this period $301,380
Standard costs assigned to production this period 296,700
Total standard cost variances recognized this period (favorable) $4,680

Journal Entries for Standard Cost Method:

Standard Cost Method
Dr
Work-in-Process 296,700
DM Variances 4,680
Direct Materials Inventory
To record direct material usage.

Work-in-Process 508,478
Conversion Variances
Various Accounts
To record direct labor and MOH usage.

Finished Goods 707,200

Work-in-Process
To record the transfer production costs of completed
units to finished goods.

Standard Cost Method

 WIP
104,183
296,700
508,478
202,160
 drug in a single processing
ded evenly during the process.
g information for July 2014 is

Started & Completed

23,300
23,300

$8.60 per equivalent unit for direct

cess and work done in the current

Tomlinson Corporation
Equivalent Units
Conversion

6,525 b
23,300 c
7,840 d

37,665 b+c+d
2,175 a
39,840 a+b+c+d

Conversion Total
$29,363 $104,183
508,478 805,178
 $537,840 $909,360
$13.500 $22.100
$13.500
$13.500

$29,363 $104,183
$0
$88,088 $88,088
$117,450 $192,270 $22.10
$314,550 $514,930 $22.10
$432,000 $707,200 $22.10
$432,000 $707,200

$96,320
$105,840 $105,840
$105,840 $202,160
$537,840 $909,360

Conversion Total

$43,200 $104,700
29,363 104,183
$13,838 $518

$498,624 $800,004
508,478 805,178
($9,854) ($5,174)

Standard Cost Method

Cr $296,700
$296,700

301,380

$508,478
$508,478
9,854
498,624

707,200

Standard Cost Method

WIP

707,200
Problem 17- 38 Modified (Transferred-in costs, weighted-average method)
Given:
Publishers, Inc., has two departments: printing and binding. Each department has one direct-cost category (DM) and
indirect-cost category (conversion costs). This problem focuses on the binding department. Books that have underg
the printing process are immediately transferred to the binding department. Direct material is added when the binding
process is 70% complete. Conversion costs are added evenly during binding operations. When those operations are
the books are immediately transferred to finished goods. Publishers, Inc., uses the weighted average method of proc
costing. The following is a summary of the April, 2014 operations of the binding department.

Degree of Completion Physical Units

Trans-in D/M Conversion (Cases)
When are costs incurred Beginning 70% Uniformly
Beginning work-in-process inventory 100% 0% 60% 1,260
Transferred in during April from printing 2,880
Completed and T/O during April 100% 100% 100% 3,240
Ending work-in-process April 30 100% 100% 75% 900
Total costs added during April

Required:
1. Using the weighted-average method, summarize the total Drying and Packaging Department costs for week 37, and
total costs to units completed (and transferred out) and to units in ending work-in-process inventory.

Binding Department Cost of Production Report: April 2014 (WA) Physical Flow
Degree of Completion
Units to Account for: Trans-in D/M Conversion
BWIP 100% 0% 60% 1,260
Transferred-in from printing during April 2,880
Total 4,140
Units Accounted for:
Units completed 3,240 1,980
From BWIP 1,980 0% 100% 40% 1,260
Started And Completed 100% 100% 100% 1,980
EWIP 100% 100% 75% 900
Total 4,140
Calculation of Equivalent Units
FIFO Equivalent Units (A)
Plus BWIP EU from previous period
Weighted Average Equivalent Units (B)

Costs to Account for:

BWIP
Current Costs Added This Period (1)
Total (2)
Cost per Equivalent Unit:
Weighted Average (2) / (B)
Costs Accounted for: Weighted Average Method
Costs Associated with Completed Units
Cost Assigned to EWIP Units
 Transferred-in Costs
D/M Costs
Conversion Costs
Total
Total Costs Accounted for

Journal Entries Weighted Average Method

Dr Cr
Work-in-Process -- Binding Department 155,520
Work-in-Process -- Printing Department 155,520
To record the transfer of partially completed units from
the Printing Department to the Binding Department.

Work-in-Process -- Binding Department 28,188

Direct Materials Inventory 28,188
To record direct material usage during April

Work-in-Process -- Binding Department 84,240

Various Accounts 84,240
To record conversion costs during April

Finished Goods Inventory 257,612

Work-in-Process -- Binding Department 257,612
To record the transfer of finished units to
finishing goods inventory.

Weighted Average
WIP - Binding
55,440.00
155,520.00
28,188.00 257,611.90
84,240.00
65,776.10
 ect-cost category (DM) and one
nt. Books that have undergone
l is added when the binding
When those operations are done,
ed average method of process

Trans-in Direct Conversion

Costs Material Costs

$39,060 $0 $16,380

$155,520 $28,188 $84,240

ment costs for week 37, and assign

ess inventory.

Equivalent Units
Trans-in D/M Conversion

0 1,260 504 b
1,980 1,980 1,980 c
900 900 675 d

2,880 4,140 3,159 b,c,d

1,260 0 756 a
4,140 4,140 3,915 a,b,c,d

Trans-in D/M Conversion Total

$39,060.00 $0.00 $16,380.00 $55,440.00 a
$155,520.00 $28,188.00 $84,240.00 $267,948.00 b,c,d
$194,580.00 $28,188.00 $100,620.00 $323,388.00 a.b.c.d

$47.0000 $6.8087 $25.7011 $79.5098

$152,280.00 $22,060.17 $83,271.72 $257,611.90 $257,612

 $42,300.00 $42,300.00
$6,127.83 $6,127.83
$17,348.28 $17,348.28
$42,300.00 $6,127.83 $17,348.28 $65,776.10
$194,580.00 $28,188.00 $100,620.00 $323,388.00
Problem 17- 39 Modified (Transferred-in costs, FIFO method)
Given:
Publishers, Inc., has two departments: printing and binding. Each department has one direct-cost category (DM) and
indirect-cost category (conversion costs). This problem focuses on the binding department. Books that have undergo
the printing process are immediately transferred to the binding department. Direct material is added when the binding
process is 70% complete. Conversion costs are added evenly during binding operations. When those operations are
the books are immediately transferred to finished goods. Publishers, Inc., uses the FIFO method of process costing.
The following is a summary of the April, 2014 operations of the binding department.

Degree of Completion Physical Units

Trans-in D/M Conversion (Cases)
When are costs incurred Beginning 70% Uniformly
Beginning work-in-process inventory 100% 0% 60% 1,260
Transferred in during April from printing 2,880
Completed and T/O during April 100% 100% 100% 3,240
Ending work-in-process April 30 100% 100% 75% 900
Total costs added during April

Required:
1. Using the weighted-average method, summarize the total Drying and Packaging Department costs for week 37, and
total costs to units completed (and transferred out) and to units in ending work-in-process inventory.

Binding Department Cost of Production Report: April 2014 (FIFO) Physical Flow
Degree of Completion
Units to Account for: Trans-in D/M Conversion
BWIP 100% 0% 60% 1,260
Transferred-in from printing during April 2,880
Total 4,140
Units Accounted for:
Units completed 3,240 1,980
From BWIP 1,980 0% 100% 40% 1,260
Started And Completed 100% 100% 100% 1,980
EWIP 100% 100% 75% 900
Total 4,140
Calculation of Equivalent Units
FIFO Equivalent Units (A)
Plus BWIP EU from previous period
Weighted Average Equivalent Units (B)

Costs to Account for:

BWIP
Current Costs Added This Period (1)
Total (2)
Cost per Equivalent Unit:
FIFO (1) / (A)
Costs Accounted for: FIFO
Costs Associated with Completed Units
From BWIP
Costs Assigned to BWIP
Transferred-in costs
D/M
 Conversion Costs
Total
From Units Started & Completed
Total Cost Associated with Units Transferred-out
Cost Assigned to EWIP Units
Transferred-in Costs
D/M Costs
Conversion Costs
Total
Total Costs Accounted for

Journal Entries FIFO Method

Dr Cr
Work-in-Process -- Binding Department $149,760
Work-in-Process -- Printing Department $149,760
To record the transfer of partially completed units from
the Printing Department to the Binding Department.

Work-in-Process -- Binding Department 28,188

Direct Materials Inventory 28,188
To record direct material usage during April

Work-in-Process -- Binding Department 84,240

Various Accounts 84,240
To record conversion costs during April

Finished Goods Inventory 251,740

Work-in-Process -- Binding Department 251,740
To record the transfer of finished units to
finishing goods inventory.

FIFO Method
WIP - Binding
60,480.00
149,760.00
28,188.00 251,740.17
84,240.00
70,927.83

322,668.00
322,668.00
irect-cost category (DM) and one
ent. Books that have undergone
al is added when the binding
When those operations are done,
method of process costing.

Trans-in Direct Conversion

Costs Material Costs

$44,100 $0 $16,380

$149,760 $28,188 $84,240

tment costs for week 37, and assign

cess inventory.

Equivalent Units
Trans-in D/M Conversion

0 1,260 504 b
1,980 1,980 1,980 c
900 900 675 d

2,880 4,140 3,159 b,c,d

1,260 0 756 a
4,140 4,140 3,915 a,b,c,d

Trans-in D/M Conversion Total

$44,100 $0 $16,380 $60,480 a
$149,760 28,188 84,240 262,188 b,c,d
$193,860 $28,188 $100,620 $322,668 a.b.c.d

$52.000 $6.809 $26.667 $85.475

$44,100.00 $0.00 $16,380.00 $60,480.00

$0.00 $0.00
$8,578.96 $8,578.96
 $13,440.00 $13,440.00
$44,100.00 $8,578.96 $29,820.00 $82,498.96 $65.475
$102,960.00 $13,481.22 $52,800.00 $169,241.22 $85.475
$147,060.00 $22,060.17 $82,620.00 $251,740.17 $77.698

$46,800.00 $46,800.00
$6,127.83 $6,127.83
$18,000.00 $18,000.00
$46,800.00 $6,127.83 $18,000.00 $70,927.83
$193,860.00 $28,188.00 $100,620.00 $322,668.00
$322,668.00
Problem 17-42 Operation Costing
Given:
Gregg Industries manufactures plastic molded chairs. The three models of molded chairs, all variations of the same d
Standard, Deluxe, and Executive. The company uses an operation-costing system.

Gregg has extrusion, form, trim, and finish operations. Plastic sheets are produced by the extrusion operation. Durin
operation, the plastic sheets are molded into chair seats and the legs are added. The Standard model is sold after thi
During the trim operation, the arms are added to the Deluxe and Executive models and the chair edges are smoothed.
Executive model enters the finish operation, in which padding is added. All of the units produced receive the same st
each operation.

The May units of production and direct material costs incurred are as follows:

Units Extrusion Form Trim Finish

Produced Materials Materials Materials Materials
Standard model 6,000 $72,000 $24,000 $0 $0
Deluxe model 3,000 36,000 12,000 9,000 0
Executive model 2,000 24,000 8,000 6,000 12,000
11,000 $132,000 $44,000 $15,000 $12,000

The total conversion costs for the month of May are: $203,000

Extrusion Form Trim Finish

Operation Operation Operation Operation
Total conversion costs $269,500 $132,000 $69,000 $42,000

Required:
1. Calculate the costs of each product type in total and on a per unit basis.

Type of Product
Standard Deluxe
Number of plastic molded chairs produced 6,000 Per Unit 3,000

Cost Assignment
Direct Material Costs -- Directly Traced to Product
Required Operations
Operation Standard Deluxe Executive Directly Traced
Extrusion Yes Yes Yes Yes $72,000 $12.00 $36,000
Form Yes Yes Yes Yes 24,000 4.00 12,000
Trim No Yes Yes Yes 9,000
Finish No No Yes Yes
Direct Material Costs -- Directly Traced to Product $96,000 $16.00 $57,000
Conversion Costs Assigned by Operation
Required Operations
Operation Standard Deluxe Executive Charging Rate
Extrusion Yes Yes Yes $24.50 $147,000 $24.50 $73,500
Form Yes Yes Yes $12.00 72,000 12.00 36,000
Trim No Yes Yes $13.80 41,400
Finish No No Yes $21.00
 Conversion Costs Assigned by Operation $219,000 $36.50 $150,900
Total costs assigned to products $315,000 $207,900
Total costs per unit $52.50 $52.50 $69.30

2. Calculate the costs assigned to 1,000 units of Deluxe EWIP which are 100% complete except for trim operations

Cost Assignment Deluxe

Direct Material Costs -- Directly Traced to Product 1,000
Required Operations
Operation Standard Deluxe Executive Directly Traced
Extrusion Yes Yes Yes Yes $12,000
Form Yes Yes Yes Yes $4,000
Trim No Yes Yes Yes $3,000
Finish No No Yes Yes
Direct Material Costs -- Directly Traced to Product $19,000
Conversion Costs Assigned by Operation
Required Operations
Operation Standard Deluxe Executive Charging Rate
Extrusion Yes Yes Yes $24.50 $24,500
Form Yes Yes Yes $12.00 12,000
Trim No Yes Yes $13.80 600 $8,280 8,280
Finish No No Yes $21.00
Conversion Costs Assigned by Operation $44,780
Total costs assigned to Deluxe EWIP $63,780
all variations of the same design, are

extrusion operation. During the forming

dard model is sold after this operation.
chair edges are smoothed. Only the
duced receive the same steps within

Type of Product
Deluxe Executive Total
Per Unit 2,000 Per Unit 11,000

$12.00 $24,000 $12.00 $132,000

4.00 8,000 4.00 44,000
3.00 6,000 3.00 15,000
12,000 6.00 12,000
$19.00 $50,000 $25.00 $203,000

$24.50 $49,000 $24.50 $269,500

12.00 24,000 12.00 132,000
13.80 27,600 13.80 69,000
42,000 21.00 42,000
 $50.30 $142,600 $71.30 $512,500
$192,600 $715,500
$69.30 $96.30 $96.30

except for trim operations which are 60% complete.

Deluxe
Per Unit

$12.00
4.00
3.00

$19.00

$24.50
12.00
13.80 $8,280
Problem 17-35, 36, 37
Ashworth Handcraft is a manufacturer of picture frames for large retailers. Every picture frame passes
through two departments: the Assembly Department and the Finishing Department. This problem
focuses on the Assembly Department. The process-costing system at Ashworth has a single direct-cost
category (direct materials) and single indirect-cost category (conversion costs). Direct materials are
added when the Assembly Department process is 10% complete. Conversion costs are added evenly
during the Assembly Department's process.

Ashworth uses the weighted-average method of process costing. Consider the following data for the
Assembly Department in April 2012:
Degree of Completion Physical Units Direct Conversion
D/M Conversion (Frames) Materials Costs
Work-in-Process, April 1 100% 40% 95 $1,665 $988
Started during April 2012 490
Completed during April 2012 455
Work-in-Process, April 30 100% 30% 130
Total costs added during April 2012 $17,640 $11,856

Problem 17-35: Weighted average method; Problem 17-37: FIFO method

Required:
Summarize total Assembly Department costs for April 2012, and assign total costs to units completed (and
transferred out) and to units in ending work-in-process.
Equivalent Units
Forming Department Cost of Production Report Physical Flow D/M Conversion
Degree of Completion
Units to Account for: D/M Conversion
BWIP (4/1/12) 100% 40% 95
Started during April 490
Total 585
Units Accounted for:
Completed Units 455
From BWIP 0% 60% 95 0 57 b
Started And Completed 360 100% 100% 360 360 360 c
EWIP 100% 30% 130 130 39 d
Total 585
Calculation of Equivalent Units
FIFO Equivalent Units (A) 490 456 b+c+d
Plus BWIP EU from previous period 95 38 a
Weighted Average Equivalent Units (B) 585 494 a+b+c+d

Costs to Account for: D/M Conversion Total

 BWIP $17.53 $26.00 $43.53 $1,665 $988 $2,653 a$
Current Costs Added This Period (1) 17,640 11,856 29,496 b$,c$,d$
Total (2) $19,305 $12,844 $32,149
Cost per Equivalent Unit:
FIFO (1) / (A) $36.000 $26.000 $62.000
Weighted Average (2) / (B) $33.000 $26.000 $59.000
Costs Accounted for: Fifo Method
Costs Associated with Completed Units
From BWIP
Costs Assigned to BWIP $1,665 $988 $2,653
D/M $0 $0
Conversion Costs $1,482 $1,482
Total $1,665 $2,470 $4,135 $43.53
From Units Started & Completed $12,960 $9,360 $22,320 $62.00
Total Cost Associated with Units Transferred-out $14,625 $11,830 $26,455 $58.14
Cost Assigned to EWIP Units
D/M Costs $4,680 $4,680
Conversion Costs $1,014 $1,014
Total Cost Assigned to EWIP $4,680 $1,014 $5,694
Total Costs Accounted for $19,305 $12,844 $32,149
Costs Accounted for: Weighted Average Method
Costs Associated with Completed Units $15,015 $11,830 $26,845 $59.00
Cost Assigned to EWIP Units
D/M Costs $4,290 $4,290
Conversion Costs $1,014 $1,014
Total $4,290 $1,014 $5,304
Total Costs Accounted for $19,305 $12,844 $32,149

Problem 17-36 Journal Entries for both FIFO and Weighted Average Methods

Fifo Method Weighted Average Method

Dr Cr Dr Cr
Work-in-Process -- Assembly Department 17,640 17,640
Direct Materials Inventory 17,640 17,640
To record direct materal usage for April

Work-in-Process -- Assembly Department 11,856 11,856

Various Accounts 11,856 11,856
To record direct labor and MOH usage for April

Work-in-Process -- Finishing Department 26,455 26,845

Work-in-Process -- Assembly Department 26,455 26,845
To record the transfer of partially completed units to the
finishing department for additional production activities.

FIFO Weighted Average

WIP - Assembly Department WIP - Assembly Department
2,653 2,653
17,640 26,455 17,640 26,845
11,856 11,856
5,694 5,304
Problem 17-29 Operation Costing
Given:
Feather Light Shoe Company manufactures two styles of men's shoes: Designer and Regular.
Designer style is made from leather, and Regular style uses synthetic materials. Three
operations -- cutting, sewing, and packing -- are common to both styles, but only Designer
style passes through a lining operation. The conversion cost rates for 2007 are:

Cutting Sewing Lining Packing

Rate per unit (pair) $10 $15 $8 $2

Details of two work orders processed in August are:

Work Work
Order Order
#815 #831
Number of units 1,000 5,000
Direct materials costs $30,000 $50,000
Style Designer Regular

Required:
Calculate the costs of work orders #815 and #831 using Operation Costing.

Work Order Number

815 831
Number of units (pairs of shoes) 1,000 5,000
Style of shoe Designer Regular

Cost Assignment
Direct Material Costs -- directly traced $30,000 $50,000
Conversion Costs Assigned by Operation
Required Operations
Operation Designer Regular Charging Rate
Cutting Yes Yes $10 10,000 50,000
Sewing Yes Yes $15 15,000 75,000
Lining Yes No $8 8,000
Packing Yes Yes $2 2,000 10,000
Total costs assigned to work orders $65,000 $185,000
Total costs per unit $65 $37
In-class Group Quiz on Process Costing

Star Toys manufactures one type of wooden toy figure. It buys wood as its direct material for the
Forming Department. Semi-completed toys are transferred from the Forming Department to the
Finishing Department where the manufacturing process is completed. The accounting system at
Star Toys has a single direct-cost category (direct materials) and a single indirect-cost category
(conversion costs). Direct materials are added at the beginning of the Forming Department's
process. Conversion costs are added evenly during production operations. The chief accountant
has collected the following data concerning the Forming Department's operations during April 2007:

Physical Direct
Degree of Completion Units Materials Conversion
DM Conversion (Toys) Costs Costs
WIP, April 1 100% 40% 300 $7,500 $2,125
Started during April 2,200
Completed during April 2,000
WIP, April 30 100% 25% 500
New costs added in April $70,000 $42,500

Star Toys uses a process costing system to record operation.

Required: Answer the following questions in the space allotted.

1. Prepare a schedule which displays the physical flow of operations for April 2007.

Physical Flow
Units to Account for:
BWIP (4/1/07) 300
Started during April 2,200
Total 2,500
Units Accounted for:
Completed Units
From BWIP (4/30/07) 300 1,700
Started and completed 1,700 1,700
EWIP 500
Total 2,500

2. Prepare a schedule which displays the production costs to be accounted for during April 2007.

Costs to Account for: D/M Conversion Total

BWIP $7,500 $2,125 $9,625
Current Costs Added This Period 70,000 42,500 112,500
Total $77,500 $44,625 $122,125
3. Prepare a schedule which displays the equivalent units of production using the FIFO method.

Degree of Completion Physical Equivalent Units

D/M Conversion Flow D/M Conversion
Units to Account for:
BWIP (4/1/07) 100% 40% 300
Started during April 2,200
Total 2,500
Units Accounted for:
Completed Units 2,000
From BWIP 300 0 180
Started And Completed 1,700 1,700 1,700
EWIP (4/30/07) 100% 25% 500 500 125
Total 2,500
Calculation of FIFO Equivalent Units 2,200 2,005

4. Prepare a schedule which displays the equivalent unit conversion from the FIFO method of
calculating equivalent units to the weighted-average method of calculating equivalent units.

FIFO Equivalent Units 2,200 2,005

Plus BWIP EU from previous period 300 120
Weighted Average Equivalent Units 2,500 2,125

5. Show how the cost per equivalent unit is determined for both direct materials and conversion
costs under both the FIFO and the weighted average methods.

Costs to Account for: D/M Conversion Total

BWIP $7,500 $2,125 $9,625
Current Costs Added This Period 70,000 42,500 112,500 (1)
Total $77,500 $44,625 $122,125 (2)
FIFO Equivalent Units 2,200 2,005 (A)
Weighted Average Equivalent Units 2,500 2,125 (B)

Cost per Equivalent Unit:

FIFO (1) / (A) $31.818 $21.197 $53.015
Weighted Average (2) / (B) $31.000 $21.000 $52.000

6. Prepare a schedule which displays the costs of production accounted for using the weighted
average method.
D/M Conversion Total
Costs Associated with Units Completed $62,000 $42,000 $104,000
Cost Assigned to EWIP Units
D/M Costs $15,500 $15,500
Conversion Costs $2,625 $2,625
Total $15,500 $2,625 $18,125
Total Costs Accounted for $77,500 $44,625 $122,125
7. Prepare a schedule which displays the costs of production accounted for using the FIFO method.

Costs Associated with Units Completed D/M Conversion Total

From BWIP
Costs Assigned to BWIP $7,500.00 $2,125.00 $9,625.00
D/M 0.00 0.00
Conversion Costs 3,815.46 3,815.46
Total $7,500.00 $5,940.46 $13,440.46
From Units Started & Completed 54,090.91 36,034.91 90,125.82
Total cost associated with units transferred-out $61,590.91 $41,975.37 $103,566.28
Cost Assigned to EWIP Units
D/M Costs $15,909.09 $15,909.09
Conversion Costs $2,649.63 2,649.63
Total Cost Assigned to EWIP $15,909.09 $2,649.63 $18,558.72
Total Costs Accounted for $77,500.00 $44,625.00 $122,125.00

8. Prepare the general journal entry to record the transfer of partially completed units from the
Forming Department to the Finishing Department assuming that the FIFO method of process
costing is used.
Fifo Method
Dr Cr
Work-in-Process -- Finishing Department 103,566
Work-in-Process -- Forming Department 103,566
To record the transfer of partially completed units to the
finishing department for additional production activities.

9. Prepare the general journal entry to record the transfer of partially completed units from the
Forming Department to the Finishing Department assuming that the weighted-average method
of process costing is used.
Weighted Average Method
Dr Cr
Work-in-Process -- Finishing Department 104,000
Work-in-Process -- Forming Department 104,000
To record the transfer of partially completed units to the
finishing department for additional production activities.
B
C
D

B+C+D
Problem 17-38 (Weighted Average Method)

Finishing Department Cost of Production Report Physical Flow

Degree of Completion
Units to Account for: Trans-in D/M Conversion
BWIP (4/1/04) (D/M 100% C; CC 40% C) 100% 0% 60% 500
Transferred-in from Forming during April 2,000
Total 2,500
Units Accounted for:
From BWIP 500
Started And Completed 1,600
EWIP 100% 0% 30% 400
Total 2,500
Calculation of Equivalent Units
FIFO Equivalent Units (A)
Plus BWIP EU from previous period
Weighted Average Equivalent Units (B)

Costs to Account for:

BWIP
Current Costs Added This Period (1)
Total (2)
Cost per Equivalent Unit:
Weighted Average (2) / (B)
Costs Accounted for: Weighted Average Method
Costs Associated with Completed Units
Cost Assigned to EWIP Units
Transferred-in Costs
D/M Costs
Conversion Costs
Total
Total Costs Accounted for

Problem 17-38 Journal Entries for Weighted Average Methods

Weighted Average Method

Dr Cr
Work-in-Process -- Finishing Department 104,000
Work-in-Process -- Forming Department 104,000
To record the transfer of partially completed units to the
finishing department for additional production activities.

Work-in-Process -- Finishing Department 23,100

Direct Materials Inventory 23,100
To record direct materal usage for the month of April

Work-in-Process -- Finishing Department 38,400

Various Accounts 38,400
To record conversion costs usage for the month of April
Finished Goods Inventory 168,552
Work-in-Process -- Finishing Department 168,552
To record the transfer of finished units to the
finishing goods inventory.

Weighted Average
WIP - Finishing Department
25,000
104,000
23,100 168,552
38,400
21,948
 Equivalent Units
Trans-in D/M Conversion

0 500 200
1,600 1,600 1,600
400 0 120

2,000 2,100 1,920

500 0 300
2,500 2,100 2,220

Trans-in D/M Conversion Total

$17,750 $0 $7,250 $25,000
104,000 23,100 38,400 165,500
$121,750 $23,100 $45,650 $190,500

$48.700 $11.000 $20.563 $80.263

$102,270.00 $23,100.00 $43,182.43 $168,552.43

$19,480.00 $19,480.00
$0.00 $0.00
$2,467.57 2,467.57
$19,480.00 $0.00 $2,467.57 $21,947.57
$121,750.00 $23,100.00 $45,650.00 $190,500.00
Problem 17-39

Finishing Department Cost of Production Report Physical Flow

Degree of Completion
Units to Account for: Trans-in D/M Conversion
BWIP (4/1/04) (D/M 100% C; CC 40% C) 100% 0% 60% 500
Transferred-in from Forming during April 2,000
Total 2,500
Units Accounted for:
From BWIP 500
Started And Completed 1,600
EWIP 100% 0% 30% 400
Total 2,500
Calculation of Equivalent Units
FIFO Equivalent Units (A)
Plus BWIP EU from previous period
Weighted Average Equivalent Units (B)

Costs to Account for:

BWIP
Current Costs Added This Period (1)
Total (2)
Cost per Equivalent Unit:
FIFO (1) / (A)
Costs Accounted for: Fifo Method
Costs Associated with Completed Units
From BWIP
Costs Assigned to BWIP
Transferred-in costs
D/M
Conversion Costs
Total
From Units Started & Completed
Total Cost Associated with Units Transferred-out
Cost Assigned to EWIP Units
D/M Costs
Conversion Costs
Total Cost Assigned to EWIP
Total Costs Accounted for

Problem 17-39 Journal Entries for both FIFO and Weighted Average Methods

FIFO Method
Dr
Work-in-Process -- Finishing Department 103,566
Work-in-Process -- Forming Department
To record the transfer of partially completed units to the
finishing department for additional production activities.
Work-in-Process -- Finishing Department 23,100
Direct Materials Inventory
To record direct materal usage for the month of April

Work-in-Process -- Finishing Department 38,400

Various Accounts
To record conversion costs for the month of April

Finished Goods Inventory 166,723

Work-in-Process -- Finishing Department
To record the transfer of finished units to the
finishing goods inventory.

FIFO
WIP - Finishing Department
24,770
103,566
23,100
38,400
23,113
 Equivalent Units
Trans-in D/M Conversion

0 500 200
1,600 1,600 1,600
400 0 120

2,000 2,100 1,920

500 0 300
2,500 2,100 2,220

Trans-in D/M Conversion Total

$17,520 $0 $7,250 $24,770
103,566 23,100 38,400 165,066
$121,086 $23,100 $45,650 $189,836

$51.783 $11.000 $20.000 $82.783

$17,520.00 $0.00 $7,250.00 $24,770.00

0.00
5,500.00 5,500.00
4,000.00 4,000.00
$17,520.00 $5,500.00 $11,250.00 $34,270.00
82,852.80 17,600.00 32,000.00 132,452.80
$100,372.80 $23,100.00 $43,250.00 $166,722.80

$20,713.20 $0.00 $20,713.20

$2,400.00 2,400.00
$20,713.20 $0.00 $2,400.00 $23,113.20
$121,086.00 $23,100.00 $45,650.00 $189,836.00

FIFO Method
Cr

103,566
 23,100

38,400

166,723

FIFO
WIP - Finishing Department

166,723