HILTON SELECT SOLUTIONS CHAPTER 4

HILTON SELECT SOLUTIONS CHAPTER 4

Exercise 4-18 (15 minutes)

1.5,500 equivalent units (refer to (a) in the following table)

2.4,140 equivalent units (refer to (b) in the following table)

Calculation of Equivalent Units: ANDROMEDA GLASS COMPANY

Weighted-Average Method

Physical UnitsPercentage of Completion with Respect to ConversionEquivalent Units

Direct Material

Conversion

Work in process, August 1

2,00060%

Units started during August

3,500

Total units to account for

5,500

Units completed and transferred out during August

3,800100%3,8003,800

Work in process, August 31

1,70020%1,700340

Total units accounted for

5,500_________

Total equivalent units

(1) 5,500(2) 4,140

EXERCISE 4-19 (30 MINUTES)

All three of these companies manufacture large amounts of relatively homogeneous products (i.e., lumber and paper). Therefore, process costing is an appropriate product-costing system.

Exercise 4-20 (15 minutes)

Calculation of Cost Per Equivalent Unit: DULUTH Glass Company

Weighted-Average Method

Direct Material Conversion Total

Work in process, February 1

$43,200$ 40,300$ 83,500

Costs incurred during February

135,000 190,000 325,000

Total costs to account for

$178,200$230,300$408,500

Equivalent units

16,50047,000

Costs per equivalent unit

$10.80*$4.90$15.70

*$10.80 = $178,200 16,500

$4.90 = $230,300 47,000

Exercise 4-21 (15 minutes)

Calculation of Cost per Equivalent Unit: MONTANA Lumber Company

Weighted-Average Method

Direct MaterialConversionTotal

Work in process, June 1

$74,900$167,000$ 241,900

Costs incurred during June

380,700625,000 1,005,700

Total costs to account for

$455,600$792,000$1,247,600

Equivalent units

6,7001,600

Costs per equivalent unit

$68*$495$563

*$68 = $455,600 6,700

$495 = $792,000 1,600

Exercise 4-22 (25 minutes)

TUSCALOOSA Paperboard Company

Weighted-Average Method

Direct MaterialConversion Total

Work in process, March 1

$ 10,900$ 28,950$ 39,850

Costs incurred during March

112,700 160,200 272,900

Total costs to account for

$123,600$189,150$312,750

Equivalent units

103,00097,000

Costs per equivalent unit

$1.20$1.95$3.15

1.Cost of goods completed and

transferred out during March:

89,000$3.15$280,350

2.Cost remaining in March 31 work

in process:

Direct material (14,000*$1.20)

$16,800

Conversion (8,000*$1.95)

15,600

Total

32,400

Total costs accounted for

$312,750

*Equivalent units in March 31 work in process:

DirectMaterialConversion

Total equivalent units (weighted average)

103,00097,000

Units completed and transferred out

(89,000)(89,000)

Equivalent units in ending work in process

14,000 8,000

Exercise 4-23 (25 minutes)

RALEIGH Textiles Company

Weighted-Average Method

Direct MaterialConversion Total

Work in process, November 1

$85,750$ 16,900$ 102,650

Costs incurred during November

158,000 267,300 425,300

Total costs to account for

$243,750$284,200$527,950

Equivalent units

62,50049,000

Costs per equivalent unit

$3.90$5.80$9.70

1.Cost of goods completed and

transferred out during November:

47,000$9.70$455,900

2.Cost remaining in November 30

work in process:

Direct material (15,500*$3.90)

$60,450

Conversion (2,000*$5.80)

11,600

Total

72,050

Total costs accounted for

$527,950

*Equivalent units in November 30 work in process:

DirectMaterialConversion

Total equivalent units (weighted average)

62,50049,000

Units completed and transferred out

(47,000)(47,000)

Equivalent units in ending work in process

15,5002,000

3.The electronic version of the Solutions Manual BUILD A SPREADSHEET SOLUTIONS is available on your Instructors CD and on the Hilton, 8e website: www.mhhe.com/hilton8e.

Exercise 4-24 (45 minutes)

1.Diagram of production process:

Work-in-Process Inventory:

Preparation Department

Batch P25Batch S33

Accumulated

by

departmentConversion costs: Direct-labor Manufacturing overhead

Work-in-Process Inventory:

Finishing Department

Batch P25Batch S33

Accumulated

by

batchDirect-

material

costs

Work-in-Process Inventory:

Packaging Department

Batch P25

Finished-Goods Inventory

Exercise 4-24 (Continued)

2. The product cost for each basketball is computed as follows:

Professional Scholastic

Direct material:

Batch P25 ($42,000 2,000)

$21.00-0-

Batch S33 ($45,000 4,000)

-0-$11.25

Conversion: Preparation Department

7.507.50

Conversion: Finishing Department

6.006.00

*Conversion: Packaging Department

.50-0-

Total product cost

$35.00$24.75

*The two production departments each worked on a total of 6,000 balls, but the Packaging Department handled only the 2,000 professional balls.

3.Journal entries:

Work-in-Process Inventory: Preparation Department

39,500*

Raw-Material Inventory

39,500

*$39,500 = $42,000 of direct material

for batch P25 $2,500 of packaging material

Work-in-Process Inventory: Preparation Department

45,000*

Raw-Material Inventory

45,000

*Direct-material cost for batch S33.

Work-in-Process Inventory: Preparation Department

45,000*

Applied Conversion Costs

45,000

*$45,000 = 6,000 units$7.50 per unit

Work-in-Process Inventory: Finishing Department

129,500*

Work-in-Process Inventory: Preparation Department129,500

*$129,500 = $39,500 + $45,000 + $45,000

Exercise 4-24 (Continued)

Work-in-Process Inventory: Finishing Department

36,000*

Applied Conversion Costs

36,000

*$36,000 = 6,000 units$6.00 per unit

Work-in-Process Inventory: Packaging Department

66,500*

Finished-Goods Inventory

99,000

Work-in-Process Inventory: Finishing Department

165,500

*$66,500 = $39,500 + (2,000$7.50) + (2,000$6.00).

These are the costs accumulated for batch P25 only.

$99,000 = $45,000 + (4,000$7.50) + (4,000$6.00).

These are the costs accumulated for batch S33 only.

Work-in-Process Inventory: Packaging Department

3,500

Raw-Material Inventory

2,500*

Applied Conversion Costs

1,000

*Cost of packaging material for batch P25.

$1,000 = 2,000 units$.50 per unit

Finished-Goods Inventory

70,000*

Work-in-Process Inventory: Packaging Department

70,000

*$70,000 = $66,500 + $3,500

solutions to Problems

Problem 4-25 (45 minutes)

1.Physical flow of units:PhysicalUnits

Work in process, June 1

40,000

Units started during June

190,000

Total units to account for

230,000

Units completed and transferred out during June

180,000

Work in process, June 30

50,000

Total units accounted for

230,000

2.Equivalent units:

Physical UnitsPercentage of Completion with Respect to ConversionEquivalent Units

Direct MaterialConversion

Work in process, June 1

40,00038%

Units started during June

190,000

Total units to account for

230,000

Units completed and transferred

out during June

180,000100%180,000180,000

Work in process, June 30

50,00055%50,00027,500

Total units accounted for

230,000

Total equivalent units

230,000207,500

3.Costs per equivalent unit:

Direct MaterialConversionTotal

Work in process, June 1

$110,500$ 22,375$132,875

Costs incurred during June

430,000 320,000 750,000

Total costs to account for

$540,500$342,375$882,875

Equivalent units

230,000207,500

Costs per equivalent unit

$2.35$1.65$4.00

Problem 4-25 (Continued)

4.Cost of goods completed and transferred out during June:

180,000$4.00$720,000

Cost remaining in June 30 work-in-process inventory:

Direct material:

50,000$2.35$117,500

Conversion:

27,500$1.65 45,375

Total cost of June 30 work in process

$162,875

Check: Cost of goods completed and transferred out

$720,000

Cost of June 30 work-in-process inventory

162,875

Total costs accounted for

$882,875

PROBLEM 4-30 (35 MINUTES)

1.Direct material cost was $1,390,000:

JR1163

$ 225,000

JY1065

710,000

DC0766

455,000

Total

$1,390,000

Texarkana Corporations total direct-labor payroll amounted to $134,274 for 6,394 hours of work ($134,274 $21 per hour). Thus, conversion cost was $575,460:

Direct labor...$134,274

Overhead applied (6,394 hours x $69).. 441,186

Total..$575,460

2.Goods completed during April cost $2,002,000 (26,000 units x $77) as the following calculations show:

Physical

UnitsPercentage

Of

Completion

With

Respect to ConversionEquivalent Units

Direct

Material Conversion

Work in process, April 1. 3,00080%

Units started during April..27,000

Total units to account for..30,000

Units completed and transferred

out during April..26,000100%26,00026,000

Work in process, April 30.. 4,000 45% 4,000 1,800

Total units accounted for...30,000

Total equivalent units..30,00027,800

PROBLEM 4-30 (CONTINUED)

Direct

MaterialConversionTotal

Work in process, April 1$ 230,000$ 63,940$ 293,940

Costs incurred during April. 1,390,000 575,460 1,965,460

Total costs to account for.$1,620,000$639,400$2,259,400

Equivalent units...30,00027,800

Cost per equivalent unit$54a$23b$77c

a$1,620,000 30,000 = $54

b$639,400 27,800 = $23

c$54 + $23 = $77

3.The cost of the ending work-in-process inventory is $257,400:

Direct material (4,000 x $54)..$216,000

Conversion cost (1,800 x $23).. 41,400

Total.$257,400

4.(a)No material would be added during May. All material is introduced at the start of the manufacturing process, and these units were begun in April.

(b)Since the work-in-process inventory is 45% complete at the end of April, 55% of the conversion would be done in May.

5.Given that the ending work-in-process inventory is at the 45% stage of completion, these units would not have reached the 75% point in April where TH55 is added. Therefore, there would be zero equivalent units with respect to part TH55 in the ending work-in-process inventory.

Problem 4-31 (50 minutes)

The missing amounts are shown below. A completed production report follows.

Work in process, October 1 (in units)

10,000

Units completed and transferred out during October

75,000

Total equivalent units: conversion

78,500

Work in process, October 1: conversion

$30,225

Costs incurred during October: direct material

600,000

Cost per equivalent unit: conversion

11.85

Cost of goods completed and transferred out during October

1,556,250

Cost remaining in ending work-in-process inventory: direct material

44,500

Production Report: FANTASIA FLOUR MILLING Company

Weighted-Average Method

Percentage

of

Completion

withEquivalent Units

PhysicalRespect toDirect

UnitsConversionMaterialConversion

Work in process, October 1

10,00015%

Units started during October

70,000

Total units to account for

80,000

Units completed and transferred

out during October

75,000100%75,00075,000

Work in process, October 31

5,00070%5,0003,500

Total units accounted for

80,000__________

Total equivalent units

80,00078,500

Problem 4-31 (Continued)

Direct

MaterialConversionTotal

Work in process, October 1

$112,000$30,225$142,225

Costs incurred during October

600,000900,0001,500,000

Total costs to account for

$712,000$930,225$1,642,225

Equivalent units

80,00078,500

Costs per equivalent unit

$8.90*$11.85$20.75**

*$8.90 = $712,000 80,000

$11.85 = $930,225 78,500

**$20.75 = $8.90 + $11.85

Problem 4-31 (Continued)

Cost of goods completed and transferred out during October:

75,000$20.75$1,556,250

Cost remaining in October 31 work-in-process inventory:

Direct material:

5,000$8.90$44,500

Conversion:

3,500$11.8541,475

Total cost of October 31 work-in-process

$85,975

Check: Cost of goods completed and transferred out

$1,556,250

Cost of October 31 work-in-process inventory

85,975

Total costs accounted for

$1,642,225

Problem 4-36 (35 minutes)

1.Conversion cost per unit in department I:

t

*Note that all of the products sold after processing in departments I, II, or III were produced orginally in department I.

2.Conversion cost per unit in department II:

*Note that all of the products sold after processing in departments II and III were colored in department II.

3.Cost of a clear glass sheet:

=direct material per

unit in department I+conversion cost per

unit in department I

Problem 4-36 (Continued)

4.Cost of an unetched, colored glass sheet:

=cost per clearglass sheet+direct materialper unit in department II+conversion cost perunit in department II

5.Cost of an etched, colored glass sheet:

=cost per unetchedcolored glass sheet+conversion cost per

unit in department III

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_1111237919.unknown

_1111237856.unknown

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