Folk Exam Questions - Chapter 4 1. Santini Company uses the weighted-average method in its process costing system.

The following data were taken from the companys accounting records: Beginning work in process inventory 1!!" complete as to materials# $!" complete as to conversion% Started in process during the period *nding work in process inventory 1!!" complete as to materials# )!" complete as to conversion%

1&!'!!! units ()!'!!! units +!'!!! units

,hat were the e-uivalent units of production for conversion costs. Solution: /irst' account for all units in the processing department in order to determine the units in ending inventory which is re-uired in order to compute the e-uivalent units%. Beginning inventory Started transferred in% Total units to 1e accounted for 1&!'!!! given% Completed transferred out% ()!'!!! given% *nding inventory Total units 0+!'!!! 2% accounted for 0!!'!!! C% +!'!!! given% 0+!'!!! B%

Calculations: 2% 3nits in 1eginning inventory 4 3nits started 5 Total units accounted to 1e for 1&!'!!! 4 ()!'!!! 5 0+!'!!! B% Total units to 1e accounted for 5 Total units accounted for 0+!'!!! from 2% 5 0+!'!!! C% 3nits completed 4 3nits in ending inventory 5 Total units accounted for 3nits completed 4 +!'!!! 5 0+!'!!! 3nits completed 5 0!!'!!! Then' compute the e-uivalent units. 3nits completed and transferred out 3nits in ending inventory +!'!!! 6 .)% *-uivalent units 0!!'!!! 0+'!!! 00+'!!!

&. 7rafke Company' a manufacturer of 1icycle tires' uses the weighted-average method in its process costing system. The company sold 8!!'!!! units during the month of 9une. There is only one processing department. The following data were taken from

the companys accounting records: :nventory at 9une 1: ,ork in process /inished goods :nventory at 9une (!: ,ork in process $8" complete as to conversion costs% /inished goods ;one 18!'!!! units (&'!!! units 1&!'!!! units

,hat were the e-uivalent units of production for conversion costs for 9une. Solution: /irst' account for all units in the finished goods department in order to compute the num1er of units that were transferred to finished goods from the processing department during 9une which is re-uired in order to compute the e-uivalent units in the processing department%. Beginning inventory Transferred in from <rocessing 7ept.% Total units to 1e accounted for 18!'!!! given% Sold transferred out% 0$!'!!! C% )&!'!!! B% *nding inventory Total units accounted for 8!!'!!! given% 1&!'!!! given% )&!'!!! 2%

Calculations: 2% 3nits sold 4 3nits in ending inventory 5 Total units accounted for 8!!'!!! 4 1&!'!!! 5 )&!'!!! B% Total units to 1e accounted for 5 Total units accounted for )&!'!!! from 2% 5 )&!'!!! C% 3nits in 1eginning inventory 4 3nits transferred in 5 3nits accounted to 1e for 18!'!!! 4 3nits transferred in 5 )&!'!!! 3nits transferred in that is' from the processing department% 5 0$!'!!! Then' calculate the e-uivalent units in the processing department: 3nits completed and transferred out to the finished goods department% 0$!'!!! 3nits in ending inventory (&'!!! 6 .$8% &0'!!! *-uivalent units 0=0'!!! (. >urdock Company uses the weighted-average method in its process costing system. The following information pertains to <rocessing 7epartment ?1 for the month of

2ugust: ;um1er of units 1&!'!!! (&!'!!! (0!'!!! 1!!'!!! Cost of materials @ 0!'!!! @1!0'!!!

Beginning work in process Started in 2ugust 3nits completed *nding work in process

2ll materials are added at the 1eginning of the process. ,hat is the cost per e-uivalent unit for materials. Solution: *-uivalent unit calculation: 3nits completed 3nits in ending inventory 1!!'!!! 6 1!!"% *-uivalent units Cost per e-uivalent unit: Beginning inventory Started materials transferred in% Total costs 7ivided 1y e-uivalent units Cost per e-uivalent unit rounded%

(0!'!!! 1!!'!!! 00!'!!! @ 0!'!!! 1!+'!!! 10+'!!! 00!'!!! @ !.(0

0. The 2urora Company uses the weighted-average method in its process costing system. The company has only a single processing department. The companyAs ending work in process inventory on >ay (1 consisted of $&'!!! units. The units in the ending work in process inventory were 1!!" complete with respect to materials and )!" complete with respect to la1or and overhead. :f the cost per e-uivalent unit for >ay was @11.!! for materials and @1$.!! for la1or and overhead' what was the total cost assigned to the ending work in process inventory. Solution: ,ork in <rocess' >ay (1: >aterials $&'!!! units 6 1!!" 6 @11.!! per unit% Ba1or and overhead $&'!!! units 6 )!" 6 @1$.!! per unit% Total cost of work in process' >ay (1 @ $=&'!!! $(0'0!! @1'8&)'0!!