M tt c el'1 Acc'l 01.- cA. , y­

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96. Production and cost data for the month of February for Process A of the Packer manufacturing Company follow:

Units in pt'ocess, February 1 (100% complete with respect to materials; 25% complete with ..espect to convet'sion cost) ... . 2,000

New units sta ..ted in p ..ocess ....................... ................ . 8,000 Units completed............................................................. . 7,000 Units in pt'ocess, Feb..uary 28

(100% complete with ..espect to materials; 113 complete with t'espect to conve ..sion cost) ....... 3,000

Work in process inventory, Feb..uary 1: Matel'il:lls ..................................................................... . $600 Conyersion.................................................................. . $100

Costs incu1'l'ed in Februilry: Matet'ials issued ......................................................... . $2,560 Conye ..sion .................................................................. . $1,500

The company uses the weighted-average cost method in its process costing system.

Required:

a. Calculate the equivalent units and cost per equivalent unit for February for materials and for conversion costs. (Carry calculations out to the nearest tenth of a cent.) b. Determine the cost transferred to finished goods. c. Determine the amount of cost that should be assigned to the ending work in process.

PROCESS COSTING

froc&;s A-­lEffort % last Period I Effo,rt". This Peri ,oq E([uivalent Units OM

l 001,

I DL I MOH - ....... 2/,vs1...

Ph~ical Units L..OO()

I OM II DL I MOH . . OM I Dl. I MOH

, . \.

I -~

9fSiN 7fJT!'O 70lr'\l -, /l'U""C

5~v

S~ t UtrO -

tao$'061/ tfo bO?,.slo I s-tft>

4 7 ~ D '4""3,(l7:> f (,6 a-v, fCZ'f<t +- tAsO ~ ~ IR( It rt t t

I 'fo. ?JIb'\ l~o."YO ) X I Ql7t)LX ?>6lN / l

/-vr 101) 'L ~ f,VV"'U'Ot~ &U.

Gt)'''PM ~.

$' t~/bO I be;\:)

t...OM WlPCosts $ l 0L tJ1!O ? 6lY0 @J.bM ~J.

~ 3bL).; II II ~

f o. -., ,10 P;-~ eu.. -''--'-';"-~ \ r~·

~}A ...-..-----­

'-­ ( f 8 . ~I L

70lS"l> x rW S"d-C

a. Units t1'ansfel'l'ed to the next dep,utment ............ .. Ending work in pl'ocess:

Matel'ials: 3,000 units x 100% ...... .................... ; .. . Conversion: 3,000 units x 113 .......................... .. .. .

Equivalent units of pl'oduction .. .. ............. .. ........... ..

Matel'ials 7,000

3,000

10,000

ConveI'sion 7,000

1,000 8,000

b. Cost of beginning wo rk in process inventory ....... . Costs added during the period ........................... ..... . Total cost (a) .................................................. ............. .

Equivalent units of production (b) ......................... . Cost per equivalent unit (a)';- (b)....................... ..... .

Materials $ 600 2,560

$3,160

10,000 $0.316

Conversion $ 100 1,500

$1,600

8,000 $0.200

Units completed and transferred out: Units transferred to the next depal1.ment (a) .......... .. ........... . Cost per equivalent unit (b) ......... .. ... ............. ......................... . Cost of units completed and transfel'l'ed out (a) x (b) ........ .

Materials

7,000 $0.316 $2,212

Conversion

7,000 $0.200 $1,400

Total

__$3........,6_1_2_

c. Ending work in process inventol'Y;

Equivalent units of production (a) ............... ... .. .. .................. .. Cost pel' equivalent unit (b) .............. ...... ............... .. ........ ...... .. Cost of ending work in process inyentory (a) x (b) .... ........ ..

l\1aterials

3,000 $0.316

$948

Conversion

1,000 $0.200

$200

Total

$1 ,148

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Bloom's: Application Learning Objective: 04-02 Compute the equivalent units ofproduction using the weighted-average method Learning Objective: 04-03 Compute the cost per equivalent unit using the weighted-average method Learning Objective: 04-04 Assign costs to units using the weighted-average method Level: Hard

97. Assurer Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the company's first processing department for a recent month.

Work in pl'ocess, beginning: Units in process .................................................... .. Percent complete with respect to materials ...... . Percent complete with respect to conversion .. ..

Costs in the beginning inventol'Y: 1\IIateriais cost ........................................................ . Conversion cost ..... .... ........ ... ... .......... ..... .............. ..

300 80% 70%

$1,368 $8,06~

Units started into production dul'ing the month .. Units completed and tnmsfelTed out.. .................. .

11,000 11,000

Costs added to production during the month: 1\IIateriais cost ....................................................... .. Conversion cost ..................................................... .

$64,9~8

$412,179

WOI'k in process, ending: Units in process ..................................................... . Pel'cent complete with respect to materials..... .. Percent complete with respect to conveJ·sion .. ..

300 80% 10%

Required:

a. Determine the equivalent units of production. b. Determine the costs per equivalent unit. c. Determine the cost of ending work in process inventory. d. Determine the cost of the units transferred to the next department.

PROCESS COSTING

Equivalent Unft8 OM I DL I MOH

! Effort 0/. This Peri od Effort % Last Period i DM DL MOH OM I DL I YOHPhysical Ulnits I I - ­

I ~ ~

,<60% 1 0 '2, ~o-o

)tl

6V0 ll,1fW{L/ OYUL( tfVl) <;; rJ-e­

30 ~tfo ­~ 1..-1"0

'{o% ( O~ ­~ 1/,D1-Ol( ),40 BU.-~,

'8't-tJ JoM

$ £6, ~Jf... f 4- 'J-O.1. rlJ O:M I DL I M;OH I W1P costa $ .-­

t - ~ {t -/f'O If, D'"3 0 r I',3 {''j +.~ 0 b 'f =- ~qt,"J..-{ I f I JJ6lf,Qtfrt ..... ~!.f12P1_=-~lfl7,{)-'7 'f'6~6OD I ~

f s-, t!f l'etAoM"fa'i .." I 6 + ifVOl y{3 ~ tf~l,5S'1 I .­

fIjj!l -l- ~iiJj. ===-f 2 /;~ ~/lIV 1'/(flJD K liEU

5.'0 '3 i.l OIt Jef J Sd-G)( 24:0 E;tJ.1Ji'-f ")(.. 30 C;Uo(k,VI

Weighted-average method:

Weighted-average method: a. Mate..ials Conversion

Units transfelTed to ne~1: dep.lI1:ment.. .. 11,000 11,000 Ending wo."k in p ..ocess:

Mate.·ials: 300 units x 80 0/0•.. . ...... . ..•.... 240 Conve ..sion: 300 units x 10 0/0 •. .•......•.•• 30

Equivalent units of p ..oduction .............. . 11,2-40 11,030

h. Materi.lls Conversion Cost of beginning wo."k in p."ocess ..... . $1,368 $8,064 Cost added du."ing the month ...... ....... . 6-4,948 412,179 Total cost ... ....................... ........ ....... ....... . $66,316 $420,243

Equivalent units ........... ..... .................... . 11,240 11,030 Cost pe.· equivalent unit ................ ... ... . $5.90 $38.10

c. lV1l1te..hlls Conversion Total Ending wo ..k in p ..ocess: Equivalent units of p ..oduction .... ............... .... . 240 30 Cost pe.· equivalent unit .... .. ...................... ... .... . $5.90 $38.10 Cost of ending work in p ..ocess inventor·y ..... . $1,416 $1,143 $2 ,559

d. IVIate.·ials Conve ..sion Total Units completed and t ...msfelTed out ... . 11,000 11,000 Cost pe." equivalent unit ... ...................... . $5.90 $38.10 Cost of units tnmsfe....ed out.. .......... .... .. . $64,900 $419,100 $484,000

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Bloom's: Application Learning Objective: 04-02 Compute the equivalent units of production using the weighted-average method Learning Objective: 04-03 Compute the cost per equivalent unit using the weighted-average method Learning Objective: 04-04 Assign costs to units using the weighted-average method Level: Medium

109. In November, one of the processing departments at Shelp Corporation had beginning work in process inventory of $27,000 and ending work in process inventory of $21,000. During the month, the cost of units transferred out from the department was $311,000.

Required:

Construct a cost reconciliation report for the department for the month of November.

Costs to be accounted fOI': Cost of beginning wo..t{ in p ..ocess inventol1' ... $ 27,000 Costs added to p ..oduction du..ing the month" 305,000 Total cost to be <lccounted fo .............................. . $332,000

Costs lIccounted fOI' as follows: Cost of ending wo..t{ in pl'ocess inventol-y ....... .. $ 21,000 Cost of units tJ·ansfe .... ed out ............................. .. 311,000 Total cost accounted fo ........................................ . $332,000

" Plug figm'e

AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Bloom's: Application Learning Objective: 04-05 Prepare a cost reconciliation report Level: Medium

---

':,

PROCESS COSTING

Effort % Last Period I Effort % This Perlod E~ulvalent Units OM ~ OL IMOH Physical Units OM I DE I MOH OM I DL. I MOH

-

LDMIDL I MOM WlP Costs $ I '7J~ 2. 7,()fJD

I

~ ~oS: tJlfO ~ {lJ 61JO ~ -

tI ~32,m

t 21Jl51N

5