BE 4-1

a. Work in progress-Moulding Department 25,000

Work in progress-Firing Department 10,000
Raw Materials 35,000
To record issuing raw materials for use in production:

b. Work in Process-Moulding Department 15,000

Work in Process-Firing Department 10,000
Wages Payable 25,000
To record direct labour costs incurred:

c. Work in Process-Moulding Department 29,000

Work in Process-Firing Department 40,000
Manufacturing Overhead 69,000
To record applying manufacturing overhead:

d. Work in Process-Firing Department 61,000

Work in Process-Moulding Department
To record transfer of unfired, moulded bricks from the moulding department to the firing

e. Finished Goods 110,000

Work in process-Firing Department
To record transfer of finished bricks from the Firing Department finished goods warehous

f. Cost of Goods Sold 107,000

Finished Goods 107,000
To record Cost of Goods Sold:

Ex 4-1

Work in Process 42,000

Raw Materials Inventory 42,000

Work in Process-Cooking 50,000

Work in Process-Moulding 36,000
Wages Payable 86,000

Work in Process-Cooking 75,000

Work In Process-Moulding 45,000
Manufacturing Overhead 120,000

Work In Process-Moulding 160,000

Work in Process-Cooking 160,000

Finished Goods 240,000

Work in Process-Moulding 240,000

The absence of direct materials is logical because there are no new materials
that are introduced in the Moulding Department. Labour, hand carves
flourishes to the chocolate after it is poured into the moulds. There is no
information to suggest that moulds are not reusable. Thus moulds are not
direct materials.
 Ex 4-4
1 Units accounted for as follows:
Transferred to the next process
Work in process, My 31 (all materials, 60% conversion cost add
Total units and equivalent
Units of production

Total cost
2 Cost to be accounted for:
Work in process, May 1 18,200
Cost added by the process 416,360
Total cost (a) 434,560
Equivalent units of production (b)
Cost per EU (a)/(b)

61,000
moulding department to the firing department:

110,000
artment finished goods warehouse:
 Quantity Schedule Materials Conversion

190,000 190,000 190,000

materials, 60% conversion cost added this month) 10,000 10,000 6000

200,000 200,000 196,000

Materials Conversion Whole Unit

4,000 14,200
56,000 360,360
60,000 374,560
200,000 196,000
0.300 1.911 2.211
Pr 4-5

Weighted-Average Method

1. A completed production report follows:

Quantity Schedule and Equivalent Units

Kilograms to be accounted for:

Work in Process, May 1 (all
materials, 1/3 labour and
overhead added last mont 20,000
Started into production 160,000
Total kilograms 180,000

Materials Overhead
Kilograms accounted for as follows:
Transferred to mixing 165,000 165,000 165,000
Work in process, May 31
(all materials, 2/3 labour and
overhead added this month) 15,000 15,000 10,000
Total kilograms and equivalent
Units of production 180,000 180,000 175,000

180,000 - 15,000
165,000 kilograms

Total Cost Materials Labour &

Cost per Equivalent Unit Overhead

Cost to be accounted for:

Work in process, May 1 25,000 16,600 8,400

440,000 154,400
Cost added during May 0 0 285,600
465,000 171,000
Total (a) 0 0 294,000

Equivalent units of
Production (b) 180,000 175,000
Cost per EU (a)/(b) 0.95 1.68

Pr 4-6
1. The equivalent units would be:
Materials Labour Overhead
Units completed during the year 750,000 750,000 750,000
Work in process, Dec 31:
250,000 units x 100% 250,000
250,000 units x 50% 125,000 125,000
Total equivalent units (a) 1,000,000 875,000 875,000

The costs per equivalent unit would be:

Materials Labour Overhead
Work in process, January 1 200,000 315,000 220,500
Cost added during the year 1,300,000 1,985,000 1,389,500
Total costs (b) 1,500,000 2,300,000 1,610,000
Cost per EU (b)/(a) 1.50 2.63 1.84

315,000 x 70%
1,985,000 x 70%

2. The amount of cost that should be assigned to the ending inventories is:

Work in process: Work in ProcessFinished goodsTotal

Materials: 250,000 units x 1.50 per unit 375,000 375,000
Labour: 125,000 EU x 2.63 per EU 328,750 328,750
Overhead: 125,000 EU x1.84 per EU 230,000 230,000
Finished goods: 150,000 units x 5.97 per unit 895,500 895,500
Total cost that should be assigned to in 933,750 895,500 1,829,250

3. The necessary adustments would be:

work in process Finished goodstotal
Cost that should be assigned to inventor 933,750 895,500 1,829,250
Year-end balances in the accounts 700,000 1,000,000 1,700,000
Difference 233,750 (104,500) 129,250
 Debit Credit
Work in process inventory 233,750
Finished Goods inventory 104,500
Cost of goods sold 129,250

4. The simplest computation of the cost of goods sold would be:

Beginning finished goods inventory 0

Units completed durng the year 750,000
Units available for sale 750,000
Less units in ending finished goods inve 150,000
Units sold during the year 600,000
Cost per equivalent unit 5.97
Cost of goods sold 3,582,000

Alternative computation:
Total manufacturing cost incurred (including Beginning WIP):
Materials 1,500,000
Labour 2,300,000
Overhead 1,610,000
Total manufacturing cost 5,410,000
Less cost assigned to inventories 1,829,250
Cost of goods sold 3,580,750
 Pr 4-4

Quantity Schedule

Units to be accounted for:

Work in process, May 1 (all
materials, 80% labour and
overhead added last
month) 15,000
Started into production 110,000
Total units 125,000

Materials Labour
Units accounted for as follows:
Transferred out 100,000 100,000 100,000
Work in process, May 31
(60% materials, 20%
labour and overhead
added this month) 25,000 15000 5000
Total units and equivalent
units of production 125,000 115,000 105,000

Total cost Materials Labour

Cost per Equivalent Unit

Cost to be accounted for:

Work in process, May 1 10,400 2,000 2,400
Whole Cost added during the month 254,000 160,000 24,000
Unit Total cost (a) 264,400 162,000 26,400
Equivalent units of production(b) 115,000 105,000
Cost per EU (a)/(b) 1.409 0.251
 2.63

Pr 4-7
1
a. Work in process-Refining Department
Work in process-Blending Department
Raw Materials

b. Work in Process-Refining Department

Work in Process-Blending Department
Salaries and Wages Payable

Whole Unit c. Manufacturing Overhead

Accounts Payable

d. Work in Process-Refining Department

5.97 Work in Process-Blending Department
Manufacturing Overhead

e. Work in Process-Blending Department

Work in Process-Refining Department

f. Finished Goods
Work in Process-Blending Department

g. Accounts Receivable
Sales

Cost of Goods Sold

Finished Goods
Overhead

100,000

5000

105,000

Overhead Whole Unit

6,000
70,000
76,000
105,000
0.724 2.384
 2
495,000 Accounts Receivable
115,000 g. Bal
610,000 1,500,000
Bal
72,000
18,000
ges Payable 90,000 Work in Process-Refining Department
Bal 38,000 e.
225,000 a. 495,000 740,000
225,000 b. 72,000
d. 181,000
181,000 Bal. 46,000
42,000
223,000
Finished Goods
740,000 Bal 20,000 g.
s-Refining Department 740,000 f. 950,000 900,000
Bal. 70,000
950,000
s-Blending Department 950,000
Accounts Payable
1,500,000 225,000
1,500,000
Salaries and Wages Payable
900,000 90,000
900,000
3 Quantity Schedule and Equivalent

Quantity Schedule
Litres to be accounted for:
Work in Process, March 1
(all materials, 90% labour
and overhead added last
month) 20,000
Started into production 390,000
Total litres 410,000
 Raw Materials
618,000 a.
610,000
8,000

Work in Process-Blending Department

Bal. 65,000 f.
a. 115,000 950,000
b. 18,000
d. 42,000
e. 740,000
Bal. 30,000

Manufacturing Overhead
c. 225,000 223,000 d.
Bal. 2,000

Sales
1,500,000

Cost of Goods Sold

900,000

uantity Schedule Materials Labour

Litres accounted for as follows:
Transferred to blending: 370,000 370,000 370,000
Work in process, March 31
(75% materials, 25%
labour and overhead
added this month) 40,000 30,000 10,000
Total litres and equivalent
Units of production 410,000 400,000 380,000

410,000 - 40,000
Total cost Materials Labour
Cost per Equivalent Unit

Cost to be accounted for:

Work in process, March 1 38,000 25,000 4,000
Cost added during March 748,000 495,000 72,000

Total cost (a) 786,000 520,000 76,000

Equivalent units of production (b) 400,000 380,000

cost per EU (a)/(b) 1.3 0.2
Overhead Cost Reconciliation

370,000 Total Cost

Cost accounted for as follows:
Transferred to blending:
 370,000 litres x 2.00 per litre 740,000
10,000 Work in process, March 31:
Materials, at 1.30 per EU 39,000
380,000 Labour, at 0.20 per EU 2,000
Overhead, at 0.50 per EU 5,000
Total work in process 46,000
Overhead Total Cost 786,000

9,000
181,000

190,000

380,000
0.5 2
Materials Labour Overhead
370,000 370,000 370,000

30,000
10,000
10,000