Chapter 3 Solutions to problem

Prepared By
EPGP 2013-14
Abhinav Khare
Chaitanya Kulkarni
Kiran Kumar Annem
Satish Jha
Saurabh Chandra
Srinivas Maddi

ns to problems
d By
13-14
Khare
Kulkarni
Annem
Jha
handra
Maddi

Problem 3.1
Unit Reconciliation
Units in beginning WIP (100% Material, 60% conversion)
Units Started
Unit to Account For
Units Completed
Units in Ending WIP (70% conversion)
Units accounted For

11000
105000
116000
110900
5100
116000

Material
Begining WIP
Cost Incurred during May
Total Cost

$80,500.00

Units

Material

Units Completed
Equivalent Units,ending WIP
Total

Costs per Equivalent Units

(Total Costs/Total units)

$4,000.00
$76,500.00

$200.00
$8,880.00

Overhead
$300.00
$9,915.00

$9,080.00 $10,215.00

Labor

Overhead

110900
5100

110900
3570

110900
3570

116000

114470

114470

$0.69

$0.08

$0.09

Cost Reconcilliation
Total Costs to account for
Cost of completed units
Cost of ending WIP
Material
Labour
Overhead
Total Costs accounted for

Labor

Total
$99,795.00
$95,654.02
$3,539.22
$283.18
$318.58

$4,140.98
$99,795.00

Total
$4,500.00
$95,295.00

$99,795.00

$0.86

Problem 3.2
Unit Reconciliation
Units in beginning WIP (80% Material, 70% conversion)
Units Started
Unit to Account For
Units Completed
Units in Ending WIP (70% Material, 60% conversion)
Units accounted For

600
2700
3300
2600
700
3300
Material

Costs
Begining WIP
Cost Incurred during August
Total Cost
Units
Units Completed
Equivalent Units,ending WIP
Total
Costs per Equivalent Units
(Total Costs/Total units)

Cost Reconcilliation
Total Costs to account for
Cost of completed units
Cost of ending WIP
Material
Labour
Overhead
Total Costs to account for

Labor

$45,000.00 $11,000.00
$269,080.00 $77,800.00
$314,080.00 $88,800.00

2600
490
3090

2600
420
3020

$101.64

$29.40

980,080.00
837,651.92
49,805.57
12,349.67
80,272.85 142,428.08
980,080.00

Overhead

Total

$80,000.00 $136,000.00
$497,200.00 $844,080.00
$577,200.00 $980,080.00

2600
420
3020
$191.13

$322.17

Problem 3.3
Unit Reconciliation
Units in beginning WIP (65% Material, 35% conversion)
Units Started
Unit to Account For
Units Completed
Units in Ending WIP (75% Material, 50% conversion)
Units accounted For

5000
6000
11000
4000
7000
11000

Production Cost Report

Material

Labor

Overhead

Costs
Begining WIP
Cost Incurred during october
Total Cost

$170,000.00
$422,000.00

$592,000.00

$160,000.00
$1,055,000.00

$50,000.00
$107,500.00

$1,215,000.00 $157,500.00

Units
Units Completed
Equivalent Units,ending WIP
Total

Costs per Equivalent Units

4000
5250

4000
3500

4000
3500

9250

7500

7500

$64.00

$162.00

$21.00

(Total Costs/Total units)

Cost Reconcilliation
Total Costs to account for
Cost of completed units
Cost of ending WIP
Material
Labour
Overhead
Total Costs to account for

Journal Entry: Not Required

$1,964,500
$988,000
$336,000
$567,000
$73,500

$976,500
$1,964,500

Total
$380,000.00
$1,584,500.00

$1,964,500.00

$247.00

Production Cost Report

Aussie yearn company
August, xxxx
Unit reconciliation
Units in beginning WIP (100% material, 70% conversion cost)
Units started in August
Units to account for
Units completed
Units ending in WIP (100% material, 50% conversion cost)
Units account for
Cost per equivalent unit calculation
Material
Cost
Beginning WIP
$6,000
Cost incurred during April
$26,500
Total
$32,500
Units
Units Completed
33,000
Equivalent units, Ending WIP
8,000
Total
41,000
Cost per equivalent unit
$0.79
Total Cost per unit
Cost Reconciliation
Total cost to account for
Cost of completed units
Cost of Ending WIP
Material
Labor
Manufacturing Overhead
Total Cost account for

$1.64

Labor
$2,000
$12,350
$14,350
33,000
4,000
37,000
$0.39

st Report
ompany
xxx
7,000
34,000
41,000
33,000
8,000
41,000

Overhead

Total

$2,500
$14,450
$16,950

$10,500
$53,300
$63,800

33,000
4,000
37,000
$0.46

$1.64

$63,800.00
$54,074.75
$6,341.46
$1,551.35
$1,832.43

$9,725.25
$63,800.00

Journal Entries are not required

Journal Entries are ignored;

No of boxes
Cost of Box

125,000
0.90

Material Cost
Labor Cost
Manufacturing overheads

%
%
%

40
15
45

Direct Material cost

Direct Labor cost
Manufacturing overhead
Cost of goods sold

$
$
$
$

45000
16875
50625
112500

Problem P3-7 Production Cost Report, Missing Data

Classic 50s Flooring produces linoleum flooring. Below is a partial production cost report for the Mixing
Department. In the report, a unit is a gallon of linoleum cement (a mixture of linseed oil, pine resin, and wood
flour).
Production Cost Report
Mixing Department
June
Quantity Reconciliation
Units in beginning WIP
700
2,700
Units started
3,400
Units to account for
Units completed
2,300
1,100
Units in ending WIP (
100%
material,
70%
conv. costs)
3,400
Units accounted for
Cost Per Equivalent Unit Calculation
Cost
Material
Beginning WIP
$450
4,125
Cost incurred during June
$4,575
Total
Units
Units completed
Equivalent units, ending WIP
Total
Cost per equivalent unit
Required:
Fill in the missing data (items a through l ).

2,300
1,100
3,400
$1.35

Labor
$1,200
11,610
$12,810

Overhead
$2,400
23,830
$26,230

Total
$4,050
39,565
$43,615

2,300
770
3,070
$4.17

2,300
770
3,070
$8.54

$14.06

Problem P3-8 Production Cost Report, Missing Information

Production Cost Report
Marion Chemicals
Dec-11
Unit Reconciliation
Units in beginning WIP (
Units started
Units to account for
Units completed
Units in ending WIP (
Units accounted for

100%

material,

10%

conv. costs)

100%

material,

20%

conv. costs)

Cost Per Equivalent Unit Calculation

Cost
Material
Labor
$45,200 $10,500
Beginning WIP
890,800 711,900
Cost incurred in December
$936,000 $722,400
Total
Units
Units completed
Equivalent units, ending WIP
Total
Cost per equivalent unit
Cost Reconciliation
Total Cost to account for
Cost of completed items
Cost of ending WIP
Material
Labor
Overhead
Total cost accounted for
Required:
Fill in the missing data (items a through l ).

515,000
5,000
520,000
$1.80

515,000
1,000
516,000
$1.40

8,000
512,000
520,000
515,000
5,000
520,000

Overhead
$26,300
1,335,940
$1,362,240

Total
$82,000
$2,938,640
$3,020,640

515,000
1,000
516,000
$2.64

$5.84

$3,020,640
$3,007,600
$9,000
$1,400
$2,640

$13,040
$3,020,640

Chapter 3 : Prolem 3.9

Mixing Department
Unit at the beginning
(100% M; 90% C)
Unit Started
Total
Unit completed
Cl WIP (100% M; 70% C)

15000
660000
675000
635000
40000
675000

Op WIP
Cost incurred during the month
Total

Material
8500
254750
263250

Labour
1200
78360
79560

OH
2500
130700
133200

Unit Completed
EU of WIP
Total
Cost per EU

635000
40000
675000
0.3900

635000
28000
663000
0.1200

635000
28000
663000
0.2009

Value of Cl WIP in Mixing Dept

Material
Labour
OH
Cl WIP in mixing Dept
Trasferred out Cost

15600
3360
5625
24585
451425

Total

476010

Packing Department
Unit at the beginning
( 60%M; 50% C)
Unit Started
Total

635000
649500

Unit completed
Cl WIP (80%M; 60% C)
Total

611500
38000
649500

Total
12200
463810
476010

Beginning WIP
Cost incurred during March
Total

0.7109

Units Completed
Cl WIP - EU
Total
Cost per EU

14500

Direct Material
925
88941
89866
611500
30400
641900
0.1400

Value of Cl WIP of Packing Dept

Direct Material
Trf-in cost
Labour
OH
Closing WIP of Shaping Dept
Cost of Finished Goods

4256
24645
456
684
30041
546770

Total

576811

Summary
Closing WIP in Mixing Dept
Closing WIP of Shaping Dept

24585.34
30041.07

Cost of Finished Goods

Total
Cost per unit of Shampoo

546769.59
601396.00
0.8941

Tranf-in
3805.00
451425
455230

Labour
60.00
12626
12686

OH
115.00
18914
19029

Total
4905.00
571906
576811

611500
35000
646500
0.7041

611500
22800
634300
0.0200

611500
22800
634300
0.0300

0.8941

Chapter 3 : Prolem 3.10

Mixing Department
Unit at the beginning
(100% M; 70% C)
Unit Started
Total
Unit completed
Cl WIP (100% M; 50% C)

Op WIP
Cost incurred during the month
Total
Unit Completed
EU of WIP
Total
Cost per EU
Value of Cl WIP in Mixing Dept
Material
Labour
OH
Cl WIP in mixing Dept
Trasferred out Cost
Total

5000
45000
50000
47000
3000
50000
Material
4000
45440
49440

Labour
1600
23310
24910

OH
1900
25830
27730

47000
3000
50000
0.9888

47000
1500
48500
0.5136

47000
1500
48500
0.5718

2966
770
858
4594
97486
102080

Total
7500
94580
102080

2.0742

Shaping Department
Unit at the beginning
( 80% C)
Unit Started
Total

47000
52000

Unit completed
Cl WIP (60% C)
Total

50500
1500
52000

5000

Beginning WIP
Cost incurred during March
Total

Tranf-in
4420
97486
101906

Labour
800
13584
14384

Units Completed
Cl WIP - EU
Total
Cost per EU

50500
1500
52000
1.9597

50500
900
51400
0.2798

Value of Cl WIP of Shaping Dept

Trf-in cost
Labour
OH
Closing WIP of Shaping Dept
Cost of Finished Goods

2940
252
174
3365
122844

Total

126210

Summary
Closing WIP in Mixing Dept
Closing WIP of Shaping Dept
Cost of Finished Goods
Total

4594.44
3365.14
122844.42
130804.00

Cost per unit of Candy

2.4326

OH
600
9320
9920

Total
5820
120390
126210

50500
900
51400
0.1930

2.4326

Tropical Sun Limited

Unit Reconciliation
Units in beginning WIP (80% material, 55% conversion)
Units Started
Unit to Account For
Units Completed
Units in Ending WIP (65% Material, 20% conversion)
Units accounted For

7500
97000
104500
92500
12000
104500

Cost per equivalent unit calculation

Cost
Beginning WIP
Cost incurred
Total Cost
Units
Units Completed
EQU, ending WIP
Cost per equivalent unit

Material

Conversion Cost

Total

7000
106473
113473

8000
143632
151632

15000
250105
265105

92500
7800
1.13

92500
2400
1.60

2.73

Cost Reconciliation
Total Cost to Account For
Cost of Completed Units
Cost of Ending WIP
Material
Conversion Cost

265105
252446
8824
3835
12659
265105

Kia Corporation
Unit Reconciliation
Units in beginning WIP (85% conversion)
Units Started
Unit to Account For
Units Completed
Units in Ending WIP (55% conversion)
Units accounted For

6000
33000
39000
29500
9500
39000

Cost per equivalent unit calculation

Cost
Beginning WIP
Cost incurred
Total Cost
Units
Units Completed
EQU, ending WIP
Cost per equivalent unit

Material

Labor

Overhead

260000
1535250
1795250

162500

455000

29500
9500
46.03

Cost Reconciliation
Total Cost to Account For
Cost of Completed Units
Cost of Ending WIP
Material
Conversion Cost
Total Cost

2482750
1941999
437304
103447
540751
2482750

Conversion Cost

Total

70000
617500
687500

330000
2770250
2482750

29500
5225
19.80

65.83

Hartwell Drug Company

Unit Reconciliation
Units in beginning WIP (40% Complete)
Units Started
Unit to Account For
Units Completed
Units in Ending WIP (80% Complete)
Units accounted For

600
1000
1600
1300
300
1600

Cost per equivalent unit calculation

Cost
Beginning WIP
Cost incurred
Total Cost
Units
Units Completed
EQU, ending WIP
Cost per equivalent unit

Material

Labor

Overhead

Conversion Cost

0
0
0

36000
102780
138780

6000
49000
55000

42000
151780
193780

1300
300
0.00

1300
240
90.12

1300
240
35.71

1300
240
125.83

Cost Reconciliation
Total Cost to Account For
Cost of Completed Units
Cost of Ending WIP
Material
Labor
Overhead

193780
163580.52
0.00
21628.05
8571.43
193780.00

This is also conversion cost of units complete

Total
42000
151780
193780

125.83

sion cost of units completed in March

Sassy Cotton Company

Unit Reconciliation
Units in beginning WIP (100% Material, 40% conversion)
Units Started
Unit to Account For
Units Completed
Units in Ending WIP (60% conversion)
Units accounted For

8000
31000
39000
30500
8500
39000

Cost per equivalent unit calculation

Cost
Beginning WIP
Cost incurred
Total Cost
Units
Units Completed
EQU, ending WIP
Cost per equivalent unit

Material

Labor

Overhead

$7,500
$33,060
$40,560

$3,400
$10,484
$13,884

$2,200
$17,024
$19,224

30500
8500
$1.04

30500
5100
$0.39

30500
5100
$0.54

Cost Reconciliation
Total Cost to Account For
Cost of Completed Units
Cost of Ending WIP
Material
Labor
Overead

$73,668.00
$60,085.00
$8,840.00
$1,989.00
$2,754.00
$13,583.00
$73,668.00

Total
$13,100
$60,568
$73,668

$1.97

Lindy Glitter
Unit Reconciliation
Units in beginning WIP (100% Material, 70% conversion)
Units Started
Unit to Account For
Units Completed
Units in Ending WIP (80% conversion)
Units accounted For

8000
83000
91000
89200
1800
91000

Cost per equivalent unit calculation

Material
Cost
Beginning WIP
Cost incurred
Total Cost
Units
Units Completed
EQU, ending WIP
Cost per equivalent unit

$3,000.00
$71,700.00
$74,700.00

89200
1800
$0.82

Labor

$300.00 $200.00
$7,764.00 $8,760.00
$8,064.00 $8,960.00

89200
1440
$0.09

Cost Reconciliation
Total Cost to Account For
Cost of Completed Units
Cost of Ending WIP
Material
Labor
Overead

$91,724.00
$89,975.96
$1,477.58
$128.11
$142.35
$1,748.04
$91,724.00

Overhead Conversion Cost

89200
1440
$0.10

Total
$3,500.00
$88,224.00
$91,724.00

$1.01

Unit Information
work in process, May 1 (75% complete)
Units started during May
Total to account for

40000
90000
130000

Units completed
Units ending in WIP(45% complete)
Total Units Account for

110000
20000
130000

Cost Information
Direct Mat
43000
87000

Coversion
340300
733080

Total
383300
820080

Total

130000

1073380

1203380

Units
Units completed
Equivalent Units ending WIP (45% complete)
total
Cost per Equivalent Unit

110000
20000
130000
1.00

110000
9000
119000
9.02

10.02

Work in Process, May 1

Cost incurred during May

Cost Reconciliation
Total Cost accounted for

1203380

Cost of completed units

Cost of Ending WIP
Material
Conversion
Total

1102200

Total

20000
81180
101180

101180
1203380

Chapter 3 : Prolem 3.17

Number of units produced
Per unit cost
Total Cost
Direct Material
Labor Cost
Manufacturing Overhead

150000
$1.75
$262,500.00
$144,375.00
$65,625.00
$52,500.00

Cost of Goods Sold

$262,500.00

Overhead Rate per unit

Journal entries are ignored

$0.35

Chapter 3 : Prolem 3.18

Number of units Produced
Direct Materials
Direct Labor
Manufacturing overhead
Total costs
Equivalent cost per unit

Total
Per unit Old Production New Production
300,000
300,000
350,000
$15,000
0.05
$15,000.00
$17,500.00
$30,000
0.1
$30,000.00
$35,000.00
$105,000
$105,000.00
$105,000.00
$150,000
$150,000.00
$157,500.00
$0.50
$0.45

Since the motivation for increasing the capacity is mainly to reduce the cost by shifting a part of overhead to next pei

ting a part of overhead to next peirod, it is not a good idea.