Chapter 4 Solutions Comm 305

COMM 305 CHAPTER 4 REVIEW
Questions
1.Identifywhichcostingsystemjoborderorprocessthefollowingcompanieswouldprimarilyuse:(a)
QuakerOats,(b)FordMotorCompanyofCanada,(c)Kinko'sPrintShop,and(d)WarnerBros.Motion
Pictures.
2.Contrasttheprimaryfocusofjobordercostaccountingandofprocesscostaccounting.
3.Whatarethesimilaritiesbetweenajoborderandaprocesscostsystem?
4.Yourroommateisconfusedaboutthefeaturesofprocesscostaccounting.Identifyandexplainthe
distinctivefeaturesforyourroommate.
5.MelStorrerbelievestherearenosignificantdifferencesintheflowofcostsbetweenjobordercost
accountingandprocesscostaccounting.IsMelcorrect?Explain.
6.(a)Whatsourcedocumentsareusedinassigning(1)materialsand(2)labourtoproductioninaprocesscost
system?(b)Whatcriterionandbasisarecommonlyusedinallocatingoverheadtoprocesses?
7.AtAceCompany,overheadisassignedtoproductiondepartmentsattherateof$5permachinehour.In
July,machinehourswere3,000inthemachiningdepartmentand2,400intheassemblydepartment.
Preparetheentrytoassignoverheadtoproduction.
8.GaryWeissisuncertainaboutthestepsusedtoprepareaproductioncostreport.Statetheproceduresthat
arerequiredinthesequenceinwhichtheyareperformed.
9.Whatismeantbythetermequivalentunitsofproduction?
10.Howareequivalentunitsofproductioncalculated?
11.WetaskawinCompanyhadzerounitsofbeginningworkinprocess.Duringtheperiod,9,000unitswere
completed,andtherewere600unitsofendingworkinprocess.Whatweretheunitsstartedinto
production?
12.MendleCo.haszerounitsofbeginningworkinprocess.Duringtheperiod,12,000unitswerecompleted,
and800unitsofendingworkinprocesswereonefifthcompleteintermsofconversioncostand100%
completeintermsofmaterialscost.Whatweretheequivalentunitsofproductionfor(a)materialsand(b)
conversioncosts?
13.VenturinoCo.started3,000unitsfortheperiod.Itsbeginninginventoryis500unitsonefourthcomplete
intermsofconversioncostsand100%completeintermsofmaterialscosts.Itsendinginventoryis200
unitsonefifthcompleteintermsofconversioncostsand100%completeintermsofmaterialscosts.How
manyunitsweretransferredoutduringthisperiod?
14.KinerCompanytransfersout14,000unitsandhas2,000unitsofendingworkinprocessthatare25%
complete.Materialsareenteredatthebeginningoftheprocessandthereisnobeginningworkinprocess.
Assumingunitmaterialscostsof$3andunitconversioncostsof$6,whatarethecoststobeassignedto
units(a)transferredoutand(b)inendingworkinprocess?
15.(a)EveAdamsbelievestheproductioncostreportisanexternalreportforshareholders.IsEvecorrect?
Explain.
(b)Identifythesectionsinaproductioncostreport.
16.Whatpurposesareservedbyaproductioncostreport?
17.AtElDakikyCompany,thereare800unitsofendingworkinprocessthatare100%completeintermsof
materialsand40%completeintermsofconversioncosts.Iftheunitcostofmaterialsis$4andthecosts
assignedtothe800unitsis$6,000,whatistheperunitconversioncost?
18.Whatisthedifferencebetweenoperationscostingandaprocesscostingsystem?
19.Howdoesacompanydecidewhethertouseajoborderoraprocesscostsystem?
*20.SilvaCo.startedandcompleted2,000unitsfortheperiod.Itsbeginninginventoryis600units25%
completeanditsendinginventoryis400units20%complete.SilvausestheFIFOmethodtocalculate
equivalentunits.Howmanyunitsweretransferredoutthisperiod?
ANSWERS TO QUESTIONS
1.
(a)
(b)
(c)
(d)
Process cost.
Process cost.
Job-order.
Job-order.
2.
The primary focus of job-order cost accounting is on the individual job. In process cost
accounting, the primary focus is on the processes involved in producing homogeneous
products.
3.
The similarities are: (1) all three manufacturing cost elementsdirect materials, direct labour,
and overheadare the same; (2) the accumulation of the costs of materials, labour, and
overhead is the same; and (3) the flow of costs is the same.
4.
The features of process cost accounting are: (1) separate work in process accounts for
each process, (2) production cost reports, (3) product costs that are computed for each
accounting period, and (4) unit costs that are computed based on total manufacturing
costs.
5.
Mel is correct. The flow of costs is the same in process cost accounting as in job-order cost
accounting. The method of assigning costs, however, is significantly different.
6.
(a) (1) Materials are charged to production on the basis of materials requisition
slips.
(2) Labour is usually charged to production on the basis of the payroll register or
departmental payroll summaries.
(b) The criterion used in assigning overhead to processes is to identify the activity that
drives or causes the cost. In many companies this activity is machine time, not
direct labour.
7.
The entry to assign overhead to production is:

July 31
27,000
Work in ProcessMachining......................................................
Work in ProcessAssembly.......................................................
Manufacturing Overhead....................................................
15,000
12,000
8.
To prepare a production cost report, four steps are followed: (a) compute the physical unit
flow,
(b) compute equivalent units of production, (c) compute production costs per unit, and (d)
prepare a cost reconciliation schedule.
9.
Equivalent units of production measure the work done during the period, expressed in
fully completed units. This involves determining the amount of work completed on
unfinished units in ending inventory.
10. Equivalent units of production are the sum of: (1) units completed and transferred out and
(2) equivalent units of ending work in process.
11. Units started into production were 9,600 or (9,000 + 600).
12.
Units transferred out

Work in process
800 X 100%
800 X 20%
Total equivalent units
13. Units transferred out were 3,300.
Units to be accounted for
Work in process (beginning)
Started into production
Total units
Units accounted for
Completed and transferred out
Work in process (ending)
Total units
Equivalent Units
b)
a) Materia Conversion
ls
Costs
12,000
12,000
800
12,800
160
12,160
500
3,000
3,500
3,300
200
3,500
14. (a) The cost of the units transferred out is $126,000, or (14,000 $9).
(b) The cost of the units in ending inventory is $9,000, or [(2,000 $3) + (2,00025%
$6)].
15. (a) Eve is incorrect. The report is an internal report for management.
(b) There are four sections in a production cost report: (1) number of physical units, (2)
equivalent units determination, (3) unit costs, and (4) cost reconciliation schedule.
16. The production cost report provides the basis for evaluating: (1) the productivity of a
department,
(2) whether unit and total costs are reasonable, and (3) whether current performance is
meeting planned objectives.
17. The per unit conversion cost is $8.75. [Conversion costs = $6,000 $3,200 = $2,800. Equivalent
units for conversion costs are 320 (800 40%); $2,800 320 = $8.75.]
18. Operations costing is similar to process costing in that standardized methods are used to
manufacture the product. At the same time, the product may have some customized
individual features that require the use of a job order cost system.
19. In deciding which system to use, a cost-benefit tradeoff occurs. In a job order system,
detailed information related to the cost of the product is involved. The cost of implementing
this system is often expensive. In a process cost system, an average cost of the product will
suffice and therefore the cost to implement is less. In summary, the cost of implementing
the system must be balanced against the benefits provided from the additional information.
*20. Unit transferred out = beginning WIP + units started and completed = 2,000 + 600 = 2,600.
BriefExercises
Journalize BE41SargunarajManufacturingpurchases$75,000ofrawmaterialsonaccount,anditincurs
entriesfor
$80,000offactorylabourcosts.JournalizethetwotransactionsonMarch31assuming
accumulatin
thelabourcostsarenotpaiduntilApril.
gcosts.
Journalize BE42DataforSargunarajManufacturingaregiveninBE41.Supportingrecordsshowthat(a)
the
theassemblydepartmentused$64,000ofrawmaterialsand$45,000ofthefactorylabour,
assignment
and(b)thefinishingdepartmentusedtheremainder.Journalizetheassignmentofthecosts
of
totheprocessingdepartmentsonMarch31.
materials
andlabour
costs.
Journalize BE43FactorylabourdataforSargunarajManufacturingaregiveninBE42.Manufacturing
the
overheadisassignedtodepartmentsonthebasisof200%oflabourcosts.Journalizethe
assignment
assignmentofoverheadtotheassemblyandfinishingdepartments.
of
overhead
costs.
Calculate BE44BowyerManufacturingCompanyhasthefollowingproductiondataforselectedmonths.
physical
EndingWorkinProcess
unitsof
Month
BeginningWorkin
Units
Units
%CompleteinTermsof
production.
Process
TransferredOut
ConversionCosts
January
30,000
10,000
40%
March
40,000
8,000
75%
July
40,000
16,000
25%
Calculatethephysicalunitsforeachmonth.
Calculate BE45UsingthedatainBE44,calculateequivalentunitsofproductionformaterialsand
equivalent
conversioncosts,assumingmaterialsareenteredatthebeginningoftheprocess.
unitsof
production.
Calculate BE46BlueRedCompanystarted9,000unitsduringthemonthofMarch.Therewere2,000units
unitcosts
inthebeginningworkinprocessinventoryand3,000unitsintheendingworkinprocess
of
inventory.CalculateunitscompletedandtransferredoutduringMarch.
production.
Assign
BE47HindiCompanyhasthefollowingproductiondataforApril:40,000unitstransferredout,
coststo
and5,000unitsinendingworkinprocessthatare100%completeformaterialsand40%
units
completeforconversioncosts.Ifunitmaterialscostis$4andunitconversioncostis$9,
transferred
determinethecoststobeassignedtotheunitstransferredoutandtheunitsinendingwork
outandin
inprocess.
process.
Calculate
unitcosts.
Preparea
cost
reconciliatio
nschedule.
*BE48OnSeptember1,DeltaCompanyhad30,000unitsinprocess,whichwere30%
completed.Materialsareaddedatthebeginningoftheprocess.Duringthemonth
170,000unitswerestartedand180,000completed.Endingworkinprocesswas50%
complete.
Calculate(a)theequivalentunitsofproductionformaterialsifweightedaveragewere
usedand(b)theequivalentunitsofproductionformaterialsifFIFOwereused.
BE49ProductioncostschargeabletotheFinishingDepartmentinJuneatYeunCompanyare
materials$15,000,labour$29,500,andoverhead$18,000.Equivalentunitsof
productionare20,000formaterialsand19,000forconversioncosts.Productionrecords
indicatethat18,000unitsweretransferredout,and2,000unitsinendingworkin
processwere60%completeintermsofconversioncostsand100%completeinterms
ofmaterials.Prepareacostreconciliationschedule.
Calculate BE410ThesmeltingdepartmentofMassaroManufacturingCompanyhasthefollowing
equivalent
productionandcostdataforNovember.
unitsof
production.
Production:2,000unitsinbeginningworkinprocessthatare100%completeinterms
ofmaterialsand20%completeintermsofconversioncosts;8,000unitstransferredout;
and5,000unitsinendingworkinprocessthatare100%completeintermsofmaterials
and40%completeintermsofconversioncosts.
Calculatetheequivalentunitsofproductionfor(a)materialsand(b)conversioncostsfor
themonthofNovember.
Assign
*BE411MoraCompanyhasthefollowingproductiondataforMarch:nobeginningworkin
coststo
process,30,000unitsstartedandcompleted,and5,000unitsinendingworkinprocess
units
thatare100%completeformaterialsand40%completeforconversioncosts.Morauses
transferred
theFIFOmethodtocalculateequivalentunits.Ifunitmaterialscostis$8andunit
outandin
conversioncostis$12,determinethecoststobeassignedtotheunitstransferredoutand
process.
theunitsinendingworkinprocess.Thetotalcoststobeassignedare$664,000.
Preparea *BE412UsingthedatainBE411,preparethecostsectionoftheproductioncostreportforMora
partial
Company.
productio
ncost
report.
SOLUTIONS TO BRIEF EXERCISES

BRIEF EXERCISE 4-1
Mar. 31
75,000
31
80,000
Raw Materials Inventory...................................

Accounts Payable.....................................
75,000
Factory Labour..................................................
Wages Payable..........................................
80,000
BRIEF EXERCISE 4-2

a)Mar.31 Work in ProcessAssembly Department......
Work in ProcessFinishing Department.......
Raw Materials Inventory...........................
75,000
64,000
11,000
b) Mar. 31Work in ProcessAssembly Department.......

Factory Labour..........................................
80,000
45,000
35,000
BRIEF EXERCISE 4-3

Mar. 31
Work in ProcessAssembly Department......

($45,000 200%)
90,000
70,000
160,000
($35,000 200%)
Manufacturing Overhead..........................
BRIEF EXERCISE 4-4

Beginning work in process
Total units
Transferred out
Ending work in process
Total units
January
40,000
40,000
March
48,000
48,000
July
56,000
56,000
30,000
10,000
40,000
40,000
8,000
48,000
40,000
16,000
56,000
BRIEF EXERCISE 4-5

January
March
July
1
Materials
40,000 (30,000 + 10,000)
48,000 (40,000 + 8,000)
56,000 (40,000 + 16,000)
Conversion Costs
34,000 (30,000 + 4,000)1
46,000 (40,000 + 6,000)2
44,000 (40,000 + 4,000)3
40% 10,000 units, 2 75% 8,000 units, 3 25% 16,000 units
BRIEF EXERCISE 4-6

Units in beginning WIP + units started = units transferred out + ending
WIP
2,000 + 9,000 = units transferred out + 3,000
Units completed and transferred out = 8,000
BRIEF EXERCISE 4-7
Assignment of Costs
Equivalent Units
Unit Cost
Transferred out
40,000
$13.00
Work in process,
Materials
Conversion costs
Total costs
5,000
2,0001
$4.00
$9.00
40% 5,000 units
$520,000
$20,000
18,000
38,000
$558,000
*BRIEF EXERCISE 4-8
Equivalent Units
Physical
Materials
Units Weighted
FIFO
Av. (a)
(b)
Units completed & transferred 180,000
Units in ending inventory
20,000
Units accounted for
200,000
Complete beginning units:
30,000 0%; 0%*
Units completed & transferred
Work in process, ending
20,000 100%
N/A
180,000
0
180,000
20,000
20,000
200,000
200,000
*Direct materials are added at the beginning of the process
BRIEF EXERCISE 4-9

Per unit cost for materials: $15,000 20,000 units = $0.75
Per unit for conversion costs: ($29,500 + $18,000) 19,000 units =
$2.50
Total per unit cost: $0.75 + $2.50 = $3.25
Costs accounted for
Transferred out
Work in process, June 30
Materials
Conversion costs
Total costs
1
(18,000 $3.25)
(2,000 $0.75)
(1,2001 $2.50)
2,000 60% = Equivalent units for conversion costs
$58,500
$1,500
3,000
4,500
$63,000
BRIEF EXERCISE 4-10
a)Materials

Work in process, November 30
Materials (5,000 100%)
Conversion costs (5,000 40%)
8,000
b)Conversion
Costs
8,000
5,000
2,000
10,000
13,000
*BRIEF EXERCISE 4-11

Costs to Be
Assigned Assignment of Costs
Transferred out
Started and
completed
$664,000
Work in process, 3/31

Materials
Conversion costs
40% 5,000 units
Equivalent
Units
Unit
Cost
Total Costs
Assigned
30,000
$20.00
$600,000
5,000
2,0001
$8.00
$12.00
$40,000
24,000
64,000
$664,000
*BRIEF EXERCISE 4-12
Units accounted for

Work in process, March 1
Started and completed
Total units
Equivalent Units
Conversion
Materials
Costs
-030,000
5,000
35,000
-030,000
2,000
32,000
MORA COMPANY
(Partial) Production Cost Report
For the Month Ended March 31
COSTS
Materials
Unit costs
Costs in March (a)
Equivalent units (b)
Unit costs (a) (b)
Costs to be accounted for
In process, March 1
Costs in March
Total costs:
Costs accounted for
Transferred out
In process, March 1
(30,000 units $20.00)
In process, March 31
Materials (5,000 $8.00)
Conversion costs
(2,000 $12.00)
Total costs:
$280,0001
35,000
$8.00
Conversion
Costs
$384,0002
32,000
$12.00
Total
$664,000
$20.00
$
0
664,000
$664,000
$
0
600,000
$40,000
24,000
64,000
$664,000
35,000 equivalent units $8.00 per unit

32,000 equivalent units $12.00 per unit
1
2
DoIt!Review
Compar D413Instructions
ejob
Indicatewhethereachofthefollowingstatementsistrueorfalse.
order
(a)Manyhospitalsusejobordercostingforsmall,routinemedicalprocedures.
and
(b)Amanufacturerofcomputerflashdriveswoulduseajobordercostsystem.
process
(c)Aprocesscostsystemusesmultipleworkinprocessaccounts.
cost
(d)Aprocesscostsystemkeepstrackofcostsonjobcostsheets.
systems.
Assignand D414YussuffCompanymanufacturesCH21throughtwoprocesses:mixingandpackaging.
journalize
InJuly,thefollowingcostswereincurred.
manufacturin
Mixing
Packaging
gcosts.
Rawmaterialsused
$10,000
$24,000
Factorylabourcosts
Manufacturingoverheadcosts
8,000
36,000
12,000
54,000
Unitscompletedatacostof$21,000inthemixingdepartmentaretransferredtothe
packagingdepartment.Unitscompletedatacostof$102,000inthepackaging
departmentaretransferredtoFinishedGoods.
Instructions
Journalizetheassignmentofthesecoststothetwoprocessesandthetransferofunitsas
appropriate.
Calculate
equivalent
units.
D415Theassemblydepartmenthasthefollowingproductionandcostdataforthecurrent
month.
BeginningWorkinProcess
UnitsTransferredOut
EndingWorkinProcess
20,000
16,000
Materialsareenteredatthebeginningoftheprocess.Theendingworkinprocessunits
are70%completeastoconversioncosts.
Instructions
Calculatetheequivalentunitsofproductionfor(a)materialsand(b)conversioncosts.
Preparecost D416InMarch,LassoManufacturinghadthefollowingunitproductioncosts:materials$10
reconciliatio
andconversioncosts$8.OnMarch1,ithadzeroworkinprocess.DuringMarch,Lasso
nschedule.
transferredout22,000units.AsofMarch31,2,000unitsthatwere40%completeasto
conversioncostsand100%completeastomaterialswereinendingworkinprocess.
Instructions
(a)Calculatethetotalunitstobeaccountedfor.
(b)Calculatetheequivalentunitsofproduction.
(c)Prepareacostreconciliationschedule,includingthecostsofmaterialstransferredout
andthecostsofmaterialsinprocess.
SOLUTIONS TO DO IT! REVIEW

DO IT! REVIEW 4-13
(a) False. Process costing is normally used when there are a large
number of homogeneous products or services.
(b) False. Same as (a)
(c) True.
(d) False. A process cost system uses a cost report to determine
total cost and per unit cost.
DO IT! REVIEW 4-14
Work in ProcessMixing Department ............................
Work in ProcessPackaging Department ......................
34,000
10,000
24,000
Work in ProcessMixing Department.............................

Work in ProcessPackaging Department.......................
Factory Labour..................................................
44,000
8,000
36,000
Work in ProcessMixing Department.............................

Manufacturing Overhead..................................
66,000
12,000
54,000

Work in ProcessMixing Department............
21,000
21,000
Finished Goods Inventory.................................................

Work in ProcessPackaging Department.....
102,000
102,000
DO IT! REVIEW 4-15

1
70% 16,000 units
DO IT! REVIEW 4-16
(a) Units to be accounted for:

Units in beginning inventory
Units started into production
(b) Units completed & transferred

Units in ending inventory
Equivalent units of prod.
Equivalent Units
b)Conversion
a)Materials
Costs
20,000
16,000
36,000
Physical
Units
20,000
11,2001
31,200
Equivalent Units
Material Conversion
24,000
24,000
22,000
2,000
24,000
22,000
2,000
24,000
22,000
8001
22,800
40% 2,000 unitsDO IT! REVIEW 4-16 (Continued)
(c)
LASSO MANUFACTURING
(Partial) Production Cost Report
For the Month Ended March 31
COSTS
Unit costs
Costs in March (a)
Unit costs (a) (b)
In process, March 1
Costs in March
Total costs:
Costs accounted for
Transferred out
In process, March 1
(22,000 units $18.00)
In process, March 31
Materials (2,000 $10.00)
Conversion costs
(800 $8.00)
Total costs:
Materials
Conversion
Costs
$240,000
24,000
$10.00
$182,400
22,800
$8.00
Total
$422,400
$18.00
$
0
422,400
$422,400
$
0
396,000
$20,000
6,400
26,400
$422,400
Exercises
Understan E417WojtekNakowskihaspreparedthefollowinglistofstatementsaboutprocesscost
dprocess
accounting.
cost
accounting
1. Processcostsystemsareusedtoapplycoststosimilarproductsthataremass
.
producedinacontinuousfashion.
2. Aprocesscostsystemisusedwheneachfinishedunitisindistinguishablefrom
another.
3. Companiesthatproducesoftdrinks,motionpictures,andcomputerchipswouldall
useprocesscostaccounting.
4. Inaprocesscostsystem,costsaretrackedbyindividualjobs.
5. Jobordercostingandprocesscostingtrackdifferentmanufacturingcostelements.
6. Bothjobordercostingandprocesscostingaccountfordirectmaterials,direct
labour,andmanufacturingoverhead.
7. Costsflowthroughtheaccountsinthesamebasicwayforbothjobordercosting
andprocesscosting.
8. Inaprocesscostsystem,onlyoneworkinprocessaccountisused.
9. Inaprocesscostsystem,costsaresummarizedinajobcostsheet.
10. Inaprocesscostsystem,theunitcostistotalmanufacturingcostsfortheperiod
dividedbytheunitsproducedduringtheperiod.
Instructions
Identifyeachstatementastrueorfalse.Iffalse,indicatehowtocorrectthestatement.
Journalize E418FernandoCompanymanufacturespizzasaucethroughtwoproductiondepartments:
transactions.
cookingandcanning.Ineachprocess,materialsandconversioncostsareincurredevenly
throughouttheprocess.ForthemonthofApril,theworkinprocessaccountsshowthe
followingdebits:
Cooking
Canning
Beginningworkinprocess
$0
$4,000
Materials
25,000
8,000
8,500
7,000
29,000
25,800
55,000
Labour
Overhead
Coststransferredin
Instructions
JournalizetheApriltransactions.
Answer
E419TheledgerofMagdyCompanyhasthefollowingworkinprocessaccount:
questionson
WorkinProcessPainting
costsand
5/1
Balance
$3,570 5/31
Transferredout
production.
$?
5/31
Materials
6,460
5/31
Labour
2,400
5/31
Overhead
1,626
5/31
Balance
$?
Productionrecordsshowthattherewere400unitsinthebeginninginventory,30%
complete,1,200unitsstarted,and1,200unitstransferredout.Thebeginningworkin
processhadmaterialscostof$2,020andconversioncostsof$1,550.Theunitsinending
inventorywere40%complete.Materialsareenteredatthebeginningofthepainting
process.
Instructions
Answerthefollowingquestions:
(a)HowmanyunitsareinprocessatMay31?
(b)WhatistheunitmaterialscostforMay?
(c)WhatistheunitconversioncostforMay?
(d)WhatisthetotalcostofunitstransferredoutinMay?
(e)WhatisthecostoftheMay31inventory?
Journalize E420DouglasManufacturingCompanyhastwoproductiondepartments:cuttingandassembly.
transactions
July1inventoriesareRawMaterials$6,200,WorkinProcessCutting$4,900,Workin
fortwo
ProcessAssembly$12,600,andFinishedGoods$35,000.DuringJuly,thefollowing
processes.
transactionsoccurred:
1.
2.
3.
4.
5.
Purchased$65,500ofrawmaterialsonaccount.
Incurred$47,000offactorylabour(CreditWagesPayable).
Incurred$75,000ofmanufacturingoverhead;$55,000waspaidandtheremainder
isunpaid.
Requisitioned$14,700inmaterialsforcuttingand$11,900inmaterialsfor
assembly.
Usedfactorylabourof$27,000forcuttingand$19,000forassembly.

6.
7.
8.
9.
Appliedoverheadattherateof$22permachinehour.Machinehourswere1,700in
cuttingand1,650inassembly.
Transferredgoodscosting$70,700fromthecuttingdepartmenttotheassembly
department.
Transferredgoodscosting$140,000fromAssemblytoFinishedGoods.
Soldgoodscosting$165,000for$210,000onaccount.
Instructions
Journalizethetransactions.(Omitexplanations.)
Calculate E421InLeeWenCompany,materialsareenteredatthebeginningofeachprocess.Workin
physical
processinventories,withthepercentageofworkdoneonconversioncosts,andproduction
unitsand
dataforitssterilizingdepartmentinselectedmonthsduring2012areasfollows:
equivalent
BeginningWorkin
unitsof
Process
EndingWorkinProcess
production.
Month
Units ConversionCost
UnitsTransferred
Units ConversionCost
%
Out
%
January
9,000
2,000
60
March
12,000
4,000
30
May
14,000
6,000
80
July
10,000
1,500
20
Instructions
(a)CalculatethephysicalunitsforJanuaryandMay.
(b)Calculatetheequivalentunitsofproductionfor(1)materialsand(2)conversioncosts
foreachmonth.
Determine E422ThecuttingdepartmentofGronemanManufacturinghasthefollowingproductionandcost
equivalent
dataforJuly.
unitsand
unitcosts
andassign
costs.
Production
Costs
1.
Transferredout9,000units.
Beginningworkin
process
$0
2.
Started1,000unitsthatare30%completeintermsof
conversioncostsand100%completeintermsof
materialsatJuly31.
Materials
45,000
Labour
16,200
Manufacturing
overhead
17,280
Materialsareenteredatthebeginningoftheprocess.Conversioncostsareincurred
uniformlyduringtheprocess.
Instructions
(a)Determinetheequivalentunitsofproductionfor(1)materialsand(2)conversioncosts.
(b)Calculateunitcostsandprepareacostreconciliationschedule.
Preparea E423ThesandingdepartmentofHanninenFurnitureCompanyhasthefollowingproductionand
production
manufacturingcostdataforMarch2012,thefirstmonthofoperation.
cost
report.
Production:11,000unitsfinishedandtransferredout;4,000unitsstartedthatare100%
completeintermsofmaterialsand25%completeintermsofconversioncosts.
Manufacturingcosts:materials$48,000;labour$42,000;overhead$36,000.
Instructions
Prepareaproductioncostreport.
Determine *E424MontrealManufacturingInc.hasthefollowingcostandproductiondataforthemonthof
equivalent
April.
unitsusing
BeginningWIP
18,000units
FIFO,unit
Startedinproduction
100,000
costs,and
assignmen
Completedproduction
94,000
tofcosts.
EndingWIP
24,000
Thebeginninginventorywas60%completeforconversioncosts.Theendinginventory
was40%completeforconversioncosts.Materialsareaddedatthebeginningofprocess.
CostspertainingtothemonthofAprilareasfollows:
Beginninginventorycostsare
Materials
$65,000
Directlabour
20,000
Factoryoverhead
15,000
CostsincurredduringAprilinclude
Materials
$550,000
Directlabour
195,000
Factoryoverhead
380,000
Instructions
(a)Calculatetheequivalentunitsofproductionfor(1)materialsand(2)conversioncosts
forthemonthofAprilusingthefirstin,firstout(FIFO)method.
(b)Calculatetheunitcostsforthemonth.
(c)Determinethecoststobeassignedtotheunitstransferredoutandinendingworkin
process.
Determine E425TorontoManufacturingInc.hasthefollowingcostandproductiondataforthemonthof
equivalent
November.
units,unit
BeginningWIP
18,000units
costs,and
Startedinproduction
100,000
assignmen
tofcosts.
Completedproduction
94,000
EndingWIP
24,000
Theendinginventorywas40%completeforconversioncosts.Materialsareaddedatthe
beginningofprocess.
CostspertainingtothemonthofNovemberareasfollows:
Beginninginventorycostsare
Materials
$65,000
Directlabour
20,000
Factoryoverhead
15,000
CostsincurredduringNovemberinclude
Materials
$550,000
Directlabour
195,000
Factoryoverhead
380,000
Instructions
(a)Calculateequivalentunitsofproductionformaterialsandforconversioncosts.
(b)Determinetheunitcostsofproduction.
(c)Showtheassignmentofcoststounitstransferredoutandinprocess.
Calculate E426ThepolishingdepartmentofLacroixManufacturingCompanyhasthefollowingproduction
equivalent
andmanufacturingcostdataforSeptember.Materialsareenteredatthebeginningofthe
units,unit
process.
costs,and
costs
Production:Beginninginventoryof2,500unitsthatare100%completeintermsof
assigned.
materialsand30%completeintermsofconversioncosts;unitsstartedduringtheperiod
are12,000;endinginventoryof3,000units10%completeintermsofconversioncosts.
Manufacturingcosts:Beginninginventorycosts,comprising$25,000ofmaterialsand
$28,080ofconversioncosts;materialscostsaddedinpolishingduringthemonth,
$120,725;labourandoverheadappliedinpolishingduringthemonth,$100,020and
$300,240,respectively.
Instructions
(a)Calculatetheequivalentunitsofproductionformaterialsandconversioncostsforthe
monthofSeptember.
(b)Calculatetheunitcostsformaterialsandconversioncostsforthemonth.
(c)Determinethecoststobeassignedtotheunitstransferredoutandinprocess.
Explain E427WilburKumarhasrecentlybeenpromotedtoproductionmanagerandhasjuststartedto
the
receivevariousmanagerialreports.Oneofthereportshehasreceivedistheproductioncost
production
reportthatyouprepared.Itshowedthathisdepartmenthad2,000equivalentunitsinending
costreport.
inventory.Hisdepartmenthashadahistoryofnotkeepingenoughinventoryonhandto
meetdemand.Hehascometoyou,veryangry,andwantstoknowwhyyoucreditedhim
withonly2,000unitswhenheknowshehadatleasttwicethatmanyonhand.
Instructions
ExplaintoWilburwhyhisproductioncostreportshowedonly2,000equivalentunitsin
endinginventory.Writeaninformalmemo.Bekindandexplainveryclearlywhyheis
mistaken.
Preparea E428TheweldingdepartmentofBaloghManufacturingCompanyhasthefollowingproduction
production
andmanufacturingcostdataforFebruary2012.Allmaterialsareaddedatthebeginningof
costreport.
theprocess.
ManufacturingCosts
ProductionData
Beginningworkin
process
Materials
$30,000
Conversioncosts
4,175
Beginningworkin
process

$34,175 Unitstransferredout
146,400 Unitsstarted
24,000units
1/10
complete
54,000
Materials
60,000
Labour
32,780 Endingworkinprocess
30,000units
Overhead
53,045
1/5complete
Instructions
PrepareaproductioncostreportfortheweldingdepartmentforthemonthofFebruary.
Calculate E429ContainerShipping,Inc.iscontemplatingtheuseofprocesscostingtotrackthecostsofits
physical
operations.Theoperationconsistsofthreesegments(departments):receiving,shipping,and
unitsand
delivery.ContainersarereceivedatContainerShipping'sdocksandsortedaccordingtothe
equivalent
shiptheywillbecarriedon.Thecontainersareloadedontoaship,whichcarriesthemtothe
unitsof
appropriateportofdestination.Thecontainersarethenoffloadedanddeliveredtothe
production.
receivingcompany.
ContainerShippingwantstobeginusingprocesscostingintheshippingdepartment.Direct
materialsrepresentthefuelcoststoruntheship,andContainersintransitrepresentswork
inprocess.Listedbelowisinformationabouttheshippingdepartment'sfirstmonthof
activity.
Containersintransit,April1
Containersloaded
900
Containersintransit,April
30
400(40%ofdirectmaterialsand30%ofconversion
costs)
Instructions
(a)Determinethephysicalflowofcontainersforthemonth.
(b)Calculatetheequivalentunitsfordirectmaterialsandconversioncosts.
Determine E430HiTechMortgageCompanyusesaprocesscostingsystemtoaccumulatecostsinitsloan
equivalent
applicationdepartment.Whenanapplicationiscompleted,itisforwardedtotheloan
units,unit
departmentforfinalprocessing.Thefollowingprocessingandcostdatapertainto
costs,and
September:
assignmen
1. Applicationsinprocesson
Beginningworkin
tofcosts.
process:
September1,100
2. Applicationsstartedin
September,1,000
Direct
materials
Conversion
costs
$1,000
4,000
Septembercosts:
3. Completedapplicationsduring
Direct
materials
$4,500
Directlabour
12,000
September,900
4. ApplicationsstillinprocessatSeptember30were
100%completeintermsofmaterials(forms)and
60%completeintermsofconversioncosts.
Overhead
8,480
Materialsaretheformsusedintheapplicationprocess,andthesecostsareincurredatthe
beginningoftheprocess.Conversioncostsareincurreduniformlyduringtheprocess.
Instructions
(a)Determinetheequivalentunitsofservice(production)formaterialsandconversion
costs.
(b)Calculatetheunitcostsandprepareacostreconciliationschedule.
Calculate *E431UsingthedatainE431,assumeHiTechMortgageCompanyusestheFIFOmethod.Also
equivalent
assumethattheapplicationsinprocessonSeptember1were100%completeintermsof
units,unit
materials(forms)and40%completeintermsofconversioncosts.
costs,and
Instructions
costs
(a)Determinetheequivalentunitsofservice(production)formaterialsandconversion
assigned.
costs.
(b)Calculatetheunitcostsandprepareacostreconciliationschedule.
Determine *E432ThecuttingdepartmentofChanManufacturinghasthefollowingproductionandcostdata
equivalent
forAugust.
units,unit
Production
Costs
costs,and
1.Startedandcompleted8,000units.
Beginningworkin
$0
assignmen
process
tofcosts.
2.Started1,000unitsthatare60%completedat
August31.
Materials
54,000
Labour
17,000
Manufacturingoverhead
26,000
Materialsareenteredatthebeginningoftheprocess.Conversioncostsareincurred
uniformlyduringtheprocess.ChanManufacturingusestheFIFOmethodtocalculate
equivalentunits.
Instructions
(a)Determinetheequivalentunitsofproductionfor(1)materialsand(2)conversion
costs.
(b)Calculateunitcostsandshowtheassignmentofmanufacturingcoststounits
transferredoutandinworkinprocess.
Calculate *E433ThesmeltingdepartmentofAmberManufacturingCompanyhasthefollowingproduction
equivalent
andcostdataforSeptember.
units,unit
costs,and
Production:Beginningworkinprocessof2,000unitsthatare100%completeintermsof
costs
materialsand20%completeintermsofconversioncosts;8,000unitsstartedand
assigned.
finished;and1,000unitsinendingworkinprocessthatare100%completeintermsof
materialsand40%completeintermsofconversioncosts.
Manufacturingcosts:Workinprocess,September1,$15,200;materialsadded,$63,000;
labourandoverhead,$143,000.
AmberusestheFIFOmethodtocalculateequivalentunits.
Instructions
(a)Calculatetheequivalentunitsofproductionfor(1)materialsand(2)conversioncosts
forthemonthofSeptember.
(b)Calculatetheunitcostsforthemonth.
(c)Determinethecoststobeassignedtotheunitstransferredoutandinprocess.
Answer *E434TheledgerofPlattCompanyhasthefollowingworkinprocessaccount:
questions
WorkinProcessPainting
oncosts
3/1
Balance
$3,080 3/31
Transferredout
and
production.
3/31
Materials
6,600
$?
3/31
Labour
2,230
3/31
Overhead
1,280
3/31
Balance
Productionrecordsshowthattherewere900unitsinthebeginninginventory,30%
complete,1,200unitsstarted,and1,300unitstransferredout.Theunitsinending
inventorywere40%complete.Materialsareenteredatthebeginningofthepainting
process.PlattusestheFIFOmethodtocalculateequivalentunits.
Instructions
Answerthefollowingquestions:
(a)HowmanyunitsareinprocessatMarch31?
(b)WhatistheunitmaterialscostforMarch?
(c)WhatistheunitconversioncostforMarch?
(d)WhatisthetotalcostofunitsstartedinFebruaryandcompletedinMarch?
(e)WhatisthetotalcostofunitsstartedandfinishedinMarch?
(f)WhatisthecostoftheMarch31inventory?
Preparea *E435TheweldingdepartmentofHirohamaManufacturingCompanyhasthefollowing
production
productionandmanufacturingcostdataforFebruary2012.Allmaterialsareaddedatthe
costreport
beginningoftheprocess.HirohamausestheFIFOmethodtocalculateequivalentunits.
fora
ManufacturingCosts
ProductionData
second
Beginningworkin
$23,600 Beginningworkin
10,000units,10%
process.
process
process
complete
Coststransferredin
135,000
Materials
57,000
Unitstransferredout
65,000
Labour
35,100
Unitstransferredin
80,000
Overhead
68,400
Endingworkinprocess
25,000,20%complete
Instructions
PrepareaproductioncostreportfortheweldingdepartmentforthemonthofFebruary.
Transferredincostsareconsideredmaterialscosts.
EXERCISE 4-17
SOLUTIONS TO EXERCISES
1. True.
2. True.
3. False. Companies that produce soft drinks and computer chips
would all use process cost accounting, but companies producing
motion pictures would use job-order costing since the motion
pictures are not homogeneous.
4. False. In a job-order cost system, costs are tracked by individual

jobs.
5. False. Job-order costing and process costing track the same three
manufacturing cost elements.
6. True.
7. True.
8. False. In a process cost system, multiple work in process
accounts by department are used.
9. False. In a process cost system, costs are summarized in a
production cost report for each department.
10. False. In a process cost system, the unit cost of production is the
sum of two unit costs: materials costs divided by the equivalent
units of production for materials, and conversion costs divided
by the equivalent units of production for conversion.
EXERCISE 4-18
April 30
Work in ProcessCooking................................
Work in ProcessCanning................................
Raw Materials Inventory.............................
33,000
25,000
8,000
30
8,500
7,000
30
29,000
25,800
30
55,000
Factory Labour............................................
15,500
Manufacturing Overhead............................
54,800
Work in ProcessCooking........................
55,000
EXERCISE 4-19
(a) Work in process, May 1
Total units to be accounted for
Less: Transferred out
Work in process, May 31
(b)
400 100%
400 40%

Costs added
Total materials cost
400
1,200
1,600
1,200
400
Equivalent Units
Materials
Conversion Costs
1,200
1,200
400
1,600
160
1,360
Direct
Materials
$2,020
6,460
$8,480
Conversion Costs
$1,550
4,026
$5,576
$8,480 1,600 = $5.30

(c) $5,576 1,360 = $4.10
(d) Transferred out: 1,200 ($5.30 + $4.10) = $11,280;
Per unit cost = $5.30 + $4.10 is calculated in (b) and (c)
(e) Work in process, May 31
Materials (400 $5.30)
Conversion costs (160 $4.10)
$2,120
656
$2,776
EXERCISE 4-20
1.
Raw Materials Inventory...........................................

Accounts Payable.............................................
65,500
65,500
2.
Factory Labour..........................................................
Wages Payable..................................................
47,000
47,000
3.
75,000
Manufacturing Overhead..........................................
Cash...................................................................
55,000
Accounts Payable.............................................
20,000
4.
Work in ProcessCutting........................................ 14,700

Work in ProcessAssembly................................... 11,900
26,600
5.
Work in ProcessCutting........................................
Work in ProcessAssembly...................................
Factory Labour..................................................
46,000
27,000
19,000
6.
Work in ProcessCutting (1,700 $22).................

Work in ProcessAssembly (1,650 $22).............
73,700
37,400
36,300
7.
Work in ProcessAssembly...................................
Work in ProcessCutting................................
70,700
70,700
8.
Finished Goods Inventory........................................

Work in ProcessAssembly............................
140,000
140,000
9.
Cost of Goods Sold..................................................
165,000
Finished Goods Inventory................................

165,000
Accounts Receivable................................................
Sales...................................................................
210,000
210,000
EXERCISE 4-21
(a)

Total units
Units accounted for
Transferred out
Total units
(1)
May
0
11,000
11,000
0
20,000
20,000
9,000
2,000
11,000
14,000
6,000
20,000
Equivalent Units of
Production
Materials
(b)
January
March
May
July
Jan.
(2)
11,000 (9,000 + 2,000)

16,000 (12,000 + 4,000)
20,000 (14,000 + 6,000)
11,500 (10,000 + 1,500)
2,000 60%
4,000 30%
Equivalent Units of
Production
Conversion Costs
10,200 (9,000 + 1,2001)
13,200 (12,000 + 1,2002)
18,800 (14,000 + 4,8003)
10,300 (10,000 + 3004)
6,000 80%
1,500 20%
EXERCISE 4-22
(a)
Materials
Conversion Costs
9,000
9,000

Work in process, July 31
1,000 100%
1,000 30%
1,000
300
9,300
10,000
(b) Materials:$45,000 10,000 = $4.50
Conversion costs:($16,200 + $17,280) 9,300 = $3.60
Costs accounted for

Transferred out (9,000 $8.10)
Materials (1,000 $4.50)
Total costs
(Total costs: $45,000 + $16,200 + $17,280 = $78,480)
EXERCISE 4-23
$72,900
$4,500
1,080
5,580
$78,480
HANNINEN FURNITURE COMPANY

Sanding Department
Production Cost Report
For the Month Ended March 31, 2012
Equivalent Units
Quantities
Physical
Units

Total units
0
15,000
15,000
Units accounted for

Transferred out
Total units
11,000
4,000
15,000
Costs
Unit costs
Costs in March
Equivalent units
Unit costs (a) (b)
Total costs
Materials
Conversion
Costs
11,000
4,000
15,000
11,000
1,000
12,000
Conversion
Material
Costs
s
$48,000
15,000
$3.20
$78,000
12,000
$6.50
Total
$126,00
0
$9.70
$
0
126,00
0
$126,00
0
(4,000 25%)
Cost Reconciliation Schedule

Costs accounted for
Materials (4,000 $3.20)
Conversion costs (1,000 $6.50)
Total costs
($42,000 + $36,000)
$106,70
0
$12,800
6,500
19,300
$126,00
0
*EXERCISE 4-24
(a) Quantities
Equivalent Units
Physical
ConUnits
Material version

Work in process, beginning
Started this period
Total units
18,000
100,000
118,000
Units accounted for

Materials (0%)
Conversion (40%)
Work In process, ending
Materials (100%)
Conversion (40%)
Current period costs
(b) Per equivalent unit cost
Total costs:
Work in Process, beginning
Costs added during the month
Total costs to be allocated
18,000
0
76,000
24,000
76,000
7,200
76,000
24,000
118,000
100,000
9,600
92,800
$1,125,000 $550,000 $575,000
$5.500
$ 100,000
1,125,000
$1,225,000
$6.196
$11.696
*EXERCISE 4-24 (Continued)

(c) Costs for completed goods and ending work in process
(Some amounts have been rounded.)
Beginning Inventory
Total
$100,000
Complete beginning WIP

Conversion (7,200 $6.196)
44,610

Materials (76,000 $5.500)
Conversion (76,000 $6.196)
Cost for units transferred out
888,900

Materials (24,000 $5.500)
Total costs
Material
$65,000
Conversi
on
$35,000
0
44,610
418,000
$1,033,510 $483,000
470,900
$550,510
191,490
132,000
$1,225,000 $615,000
59,490
$610,000
EXERCISE 4-25
(a)
24,000 100%
24,000 40%
Equivalent units of production
(b)
Costs during the month
Equivalent units
Unit costs
Materials
94,000
24,000
118,000
Materials
$615,0001
118,000
$5.212
Conversion
Costs
94,000
9,600
103,600
Conversion
Costs
$610,0002
103,600
$5.888
$65,000 + $550,000
$35,000 + $575,000
1
(c) Transferred out (94,000 $11.10)

Work in process
Materials (24,000 $5.212)
Total costs
Some numbers have been rounded.
Total
$1,225,000
$11.10
2
$1,043,400
$125,100
56,500
181,600
$1,225,000
EXERCISE 4-26
(a)
Physical
Units
2,500
12,000
14,500
Work in process, September 1


Work in process
3,000 100%
3,000 10%
11,500
3,000
14,500
Equivalent Units
Materials
Conversion Costs
11,500
11,500
(b)
3,000
14,500
Materials

Direct materials
Conversion costs
Costs added to production in polishing
during September
Material costs
Conversion costs
($100,020 + $300,240)
Total cost
300
11,800
Conversion
Costs
$25,000
$28,080
120,725
$145,725
400,260
$428,340
$145,725 14,500 = $10.05 (Material costs per equivalent unit)

$428,340 11,800 = $36.30 (Conversion costs per equivalent unit)
$10.05 + $36.30 = $46.35 cost per unit
(c) Costs accounted for

$533,025
Materials (3,000 $10.05)
Total costs
$574,065
Prove total costs:
Beginning Inventory
Added during the month:
Materials
Conversion costs
Total [as in (c) above]
$30,150
10,890
$ 53,080
120,725
400,260
$574,065
41,040
EXERCISE 4-27
To:
From:
Re:
Stan Maley
Student
Ending inventory
The reason for any confusion related to your departments ending

inventory quantity stems from the fact that the quantity can be measured
in two different ways, depending on what the information is used for.
The ending inventory quantity can be measured in physical units or
equivalent units. Physical units are actual units present without regard
to the stage of completion. Your departments ending inventory in
physical units is at least double the amount reported as equivalent
units.
Equivalent units measure the work done on the physical units,
expressed in terms of fully completed units. Therefore, if your ending
inventory contains 4,000 units which are 50% complete, that is
equivalent to having 2,000 completed units at month end. Therefore, the
ending inventory could be expressed as containing 4,000 physical units
or 2,000 equivalent units. I hope this clears up any
misunderstandings. Please contact me if you have any further
questions.
EXERCISE 4-28
BALOGH MANUFACTURING COMPANY

Welding Department
For the Month Ended February 29, 2012
Equivalent Units
Quantities
Physical
Units
Materials
(Step 1)
Work in process, February 1
Total units
24,000
60,000
84,000
Units accounted for

Transferred out
Total units
54,000
30,000
84,000
Unit costs (Step 3)

Costs in February
Equivalent units
Unit costs (a) (b)
(Step 2)
54,000
30,000
84,000
Costs
Materials
(a)
(b)
Conversion
Costs
$176,400
84,000
$2.10
54,000
6,000
60,000
Conversion
Costs
$90,000
60,000
$1.50

Started into production 1
Total costs
1
($146,400 + $32,780 + $53,045)
Total
$266,400
$3.60
$34,175
232,225
$266,400
Cost Reconciliation Schedule (Step 4)

Costs accounted for
Materials (30,000 $2.10)
Conversion costs (6,000 1.50)
Total costs
$194,400
$63,000
9,000
72,000
$266,400
EXERCISE 4-29
(a)
Containers in transit, April 1

Containers loaded
Total containers
0
900
900
Containers off-loaded1
Total containers
500
400
900
Total containers less containers in transit
(b)
Containers off-loaded
2
400 40% = 160
3
400 30% = 120
Equivalent Units
Physical
Direct
Conversion
Units
Materials
Costs
500
500
500
2
400
160
1203
660
620
EXERCISE 4-30
(a)
Physical
Units
100
1,000
1,100

900
200
1,100
Materials
900
200
1,100
Completed Applications transferred out

Work in process, ending (100%, 60%)
Equivalent units
Conversion
Costs
900
120
1,020
(b)
Costs
Unit costs (Step 3)
Costs in September
Equivalent units
Unit costs (a) (b)
(a)
(b)
Materials
Conversion
Costs
$5,500
1,100
$5.00
$24,480
1,020
$24.00

Total costs
Total
$29,980
$29.00
$5,000
24,980
$29,980

Costs accounted for
Transferred out (900 $29.00)
Total costs
$26,100
$1,000
2,880
3,880
$29,980
*EXERCISE 4-31
(a)
Applications completed:
Total units
1
Physical
Units
100
800
200
1,100
Equivalent Units
Conversion
Materials
Costs
0
800
200
1,000
601
800
120
980
40% complete as to conversion costs, thus needs 60% more to complete the units,
60% 100 units = 60 equivalent units

(b) Materials: $4,500 1,000 = $4.50
Conversion costs: ($12,000 + $8,480) 980 = $20.898
Costs to be accounted for:
Costs put into production in September
Total costs
Costs accounted for:
Applications completed:
Started and completed (800 $25.398)
Work in process, September 30:
Total costs
$5,000
24,980
$29,980
$5,000
1,254
$ 6,254
20,318
900
2,508
$26,572
3,408
$29,980
*EXERCISE 4-32
(a) (1) Materials:
Production Data
Work in process, Aug1
Work in process, Aug 31
Total
(2) Conversion Costs:
Production Data
Total
(b) Unit costs are:
Materials
Conversion costs
Total
1
Materials
Added
This Period
0
100%
100%
Physical
Units
0
8,000
1,000
9,000
Physical
Units
0
8,000
1,000
9,000
$54,000 9,000 =
$43,0001 8,600 =
%
0
100
60
Equivalent
Units
0
8,000
1,000
9,000
Equivalent
Units
0
8,000
600
8,600
$6.00
5.00
$11.00
$17,000 (Labour) + $26,000 (Manufacturing Overhead) = $43,000
Equivale
Costs to Be
nt
Unit
Assigned
Assignment of Costs
Units Cost
Total mfg. Transferred out
costs
Started and completed 8,000 $11
Work in process, 8/31
Materials
Conversion costs
$97,000
1,000
600
$6
$5
Total
Costs
Assigned
$88,000
6,000
3,000
9,000
$97,0002
$54,000 (Materials) + $17,000 (Labour) + $26,000 (Manufacturing

Overhead).
*EXERCISE 4-33
(a) (1)
(2)
Materials
Work in process, beg.
Work in process, end
Total
Physical
Units
2,000
8,000
1,000
14,000
Materials Added
This Period
Q 0%
100%
100%
Equivalent
Units
0
8,000
1,000
9,000
Conversion Costs
Work in process, beg.
Total
Physical
Units
2,000
8,000
1,000
14,000
Work Added
This Period
80%1
100%
40%
Equivalent
Units
1,600
8,000
400
10,000
20% complete as to conversion costs, thus needs 80% more to

complete the units,
(b) Materials
Conversion costs
(c)
Costs to Be
Assigned
Total mfg. costs
$221,200*
$63,000 9,000 =
$7.00
$143,000 10,000 =
14.30
$21.30
Assignment of Costs
Equivalent
Units
Transferred out
Work in process, beg
Conversion costs
Total costs transferred out
Materials
Conversion costs
Total costs
Unit
Cost
1,600
8,000
$14.30
$21.30
1,000
400
$7.00
$14.30
Total Costs
Assigned
$15,200
22,880
$7,000
5,720
$38,080
170,400
208,480
12,720
$221,200
*Work in process, September 1, $15,200 + materials costs $63,000 + labour and

overhead costs $143,000 = $221,200.
*EXERCISE 4-34
(a) Work in process, beginning
Total units to be accounted for
Less: Transferred out
900
1,200
2,100
1,300
800
(b) Materials:
Physical Materials Added Equivalent

Production Data
Units
This Period
Units
900
0
0
400
100%
400
Work in process, March 31 800
100%
800
Total
2,100
1,200
Unit cost = $6,600 1,200 = $5.50.

(c) Conversion costs:
Physical
Production Data
Units
900
400
Work in process, March 31 800
Total
2,100
Work Added
This Period
70%1
100%
40%
70% to complete the units, 70% 900 units
Equivalent
Units
630
400
320
1,350
Unit cost = $2,230 (Labour) + $1,280 (Overhead) 1,350 = $2.60

(d) In process, March 1...........................................................
Conversion costs in March (630 $2.60)........................
Total cost of units started in Feb & completed in Mar...
$3,080
1,638
$4,718
(e) 400 ($5.50 + $2.60) = $3,240

(f)
Materials (8002 $5.50).....................................................

Conversion costs (800 40% $2.60)............................
Total cost of work in process, March 31.........................
Work in process ending March 31st
$4,400
832
$5,232
*EXERCISE 4-35
HIROHAMA MANUFACTURING COMPANY
Welding Department
For the Month Ended February 29, 2012
Equivalent Units
Quantities
Physical
Units
Materials
(Step 1)
(Step 2)

Units transferred in
Total units
10,000
80,000
90,000
Units accounted for

Started and completed2
Total Completed
Total units
10,000
55,000
65,000
25,000
90,000
Costs
Unit costs (Step 3)

Costs in February
Equivalent units
Unit costs (a) (b)
Costs Transferred in
Total costs
Conversion
Costs
(a)
(b)
0
55,000
55,000
25,000
80,000
9,0001
55,000
64,000
5,0003
69,000
Materials
Conversion
Costs
Total
$192,000
$103,500
$295,500
80,000
$2.40
69,000
$1.50
$3.90
$23,600
135,000
160,500
$319,100

Costs accounted for (Step 4)
Transferred out
Costs to complete beginning
work in process
Conversion costs
(9,000 $1.50)
Total costs
Units started and completed (55,000 $3.90)
Total costs transferred out
Materials (25,000 $2.40)
Total costs
$23,600
13,500
$37,100
214,500
$251,600
60,000
7,500
10% complete as to conversion costs; needs 90% more to complete the units,
90% 10,000 = 9,000 equivalent units
2
80,000 25,000 = 55,000
3
25,000 20% = 5,000
4
Cost of materials added $57,000 plus costs transferred in $135,000.
5
Labour $35,100 plus overhead $68,400.
67,500
$319,100
Problems:SetA
Calculate P436ATorontoTimersInc.'scostingsystemusestwocostcategories:directmaterialsand
equivalen
conversioncosts.Eachofitsproductsmustgothroughtheassemblydepartmentandthe
tunits,
testingdepartment.Directmaterialsareaddedatthebeginningofproduction.Conversion
unit
costsareallocatedevenlythroughoutproduction.Datafortheassemblydepartmentfor
costs,and
June2012areasfollows:
costs
ProductionDataUnits
assigned.
Workinprocess,beginninginventory(60%completeintermsof
850units
conversioncosts)
UnitsstartedduringJune
Workinprocess,endinginventory
1,300
units
450units
CostData
Workinprocess,beginninginventorycosts
Directmaterials
382,500
Conversioncosts
255,000
DirectmaterialscostsaddedduringJune
2,500,000
ConversioncostsaddedduringJune
2,800,000
Instructions
(a)Determinewhatunitcostcanbecalculatedfromtheinformationprovidedforworkin
processbeginninginventory.
(b)Calculatehowmanyunitswerecompletedandtransferredoutoftheassembly
departmentduringJune2012.
Complete P437AKastenCompanymanufacturesbowlingballsthroughtwoprocesses:mouldingand
thefour
packaging.Inthemouldingdepartment,urethane,rubber,plastic,andothermaterialsare
steps
mouldedintobowlingballs.Inthepackagingdepartment,theballsareplacedincartons
necessary
andsenttothefinishedgoodswarehouse.Allmaterialsareenteredatthebeginningof
toprepare
eachprocess.
a
Labourandmanufacturingoverheadareincurreduniformlythroughouteachprocess.
productio
ProductionandcostdataforthemouldingdepartmentduringJune2012arepresented
ncost
below:
report.
ProductionData
June
Beginningworkinprocessunits
Unitsstartedintoproduction
30,000
Endingworkinprocessunits
4,000
Percentcompleteendinginventory
80%
CostData
Materials
$298,000
Labour
60,400
Overhead
150,800
Total
$509,200
Instructions
(a)Prepareascheduleshowingphysicalunitsofproduction.
(b)Determinetheequivalentunitsofproductionformaterialsandconversioncosts.
(c)Calculatetheunitcostsofproduction.
(d)DeterminethecoststobeassignedtotheunitstransferredandinprocessforJune.
(e)PrepareaproductioncostreportforthemouldingdepartmentforthemonthofJune.
Complete P438ASweetCorporationisinthedairymanufacturingbusiness.Productsgothroughtwo
thefour
productiondepartments(Afirst,thenB).DatafromthosedepartmentsforOctober2012
steps
arepresentedbelow.
necessary
DepartmentA
DepartmentB
toprepare
Beginningworkinprocess Beginningworkinprocess
a
productio
Numberofunits
1000
200
ncost
%completeformaterials
100%
report.
%completefortransferredin
100%
60%
30%
Totalmaterialscost
$24,000
Totalconversioncost
$30,000
$40,000
15,000
%completeforconversion
Totaltransferredincosts
DepartmentA
DepartmentB
Endingworkinprocess
Endingworkinprocess
Numberofunits
600
300
100%
100%
30%
40%
SweetCorporationstarted2,600unitsofproductduringthemonthindepartmentA.Costs
incurredindepartmentAforOctober2012totalled$64,000formaterialand$132,000for
conversion.Additionally,departmentBincurredconversioncostsinSeptember2012of
$600,000.DepartmentBaddsnomaterialstotheproduct.
Instructions
(a)JournalizethetransferofgoodsfromdepartmentAtodepartmentBduringOctober
2012.SweetCorporationaccountsforitscostsusingtheweightedaveragemethod.
(b)PrepareaproductioncostreportfordepartmentBforOctober2012.
Journalize P439AFiedelCompanymanufacturesitsproduct,Vitadrink,throughtwomanufacturing
transactions
processes:mixingandpackaging.Allmaterialsareenteredatthebeginningofeach
.
process.OnOctober1,2012,inventoriesconsistedof$26,000inRawMaterials,$0in
WorkinProcessMixing,$250,000inWorkinProcessPackaging,and$289,000in
FinishedGoods.ThebeginninginventoryforPackagingconsistedof10,000unitsthat
were50%completeintermsofconversioncostsandfullycompleteintermsof
materials.DuringOctober,50,000unitswerestartedintoproductioninthemixing
departmentandthefollowingtransactionswerecompleted:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Transferred45,000unitsfrommixingtopackagingatacostof$979,000.
Issuedrawmaterialsforproduction:mixing$210,000andpackaging$45,000.
Incurredlabourcostsof$248,900.
Usedfactorylabour:mixing$182,500andpackaging$66,400.
Incurred$790,000ofmanufacturingoverheadonaccount.
Appliedmanufacturingoverheadonthebasisof$22permachinehour.Machine
hourswere28,000inmixingand6,000inpackaging.
Transferred53,000unitsfrompackagingtoFinishedGoodsatacostof
$1,315,000.
Soldgoodscosting$1,604,000for$2,500,000onaccount.
Instructions
JournalizetheOctobertransactions.
Determine P440AThefollowingispartialinformationforthemonthofMarchforMacmillanInternational
assignment
Inc.,atwodepartmentmanufacturerthatusesprocesscosting:
ofcosts.
Workinprocess,beginning(67%converted)
15,000 units
Costsofbeginningworkinprocess:
TransferredinfromdepartmentA
Materials
Conversion
UnitscompletedandtransferredoutduringMarch
UnitstransferredinduringMarchfromdepartmentA
Workinprocess,ending(37.5%converted)

$9,500
0
11,200
45,000 units
? units
16,000 units
MaterialscostsaddedduringMarch
$13,000
ConversioncostsaddedduringMarch
$63,000
Otherinformation:
1.
2.
3.
MaterialisintroducedatthebeginningindepartmentAandmorematerialis
addedattheveryendindepartmentB.
Conversioncostsareincurredevenlythroughoutbothprocesses.
AstheprocessindepartmentAiscompleted,goodsareimmediatelytransferred
todepartmentB;asgoodsarecompletedindepartmentB,theyaretransferredto
finishedgoods.
4. UnitcostsofproductionindepartmentAinMarchwere
Materials
$0.55
Conversion
0.40
Total
$0.95
5. Thecompanyusestheweightedaveragemethod.
Instructions
(a)CalculatethecostofgoodstransferredoutofdepartmentBinMarch.
(b)CalculatethecostoftheMarchendingworkinprocessinventoryindepartmentB.
(adaptedfromCGACanada)
Assign P441ACavalierCompanyhasseveralprocessingdepartments.Costschargedtotheassembly
costsand
departmentforNovember2012totalled$2,229,000asfollows:
preparea
Workinprocess,November1
productio
Materials
$69,000
ncost
report.
Conversioncosts
48,150
$117,150
Materialsadded
1,548,000
Labour
225,920
Overhead
337,930
Productionrecordsshowthat35,000unitswereinbeginningworkinprocess,30%
completeintermsofconversioncosts,700,000unitswerestartedintoproduction,and
25,000unitswereinendingworkinprocess,40%completeintermsofconversioncosts.
Materialsareenteredatthebeginningofeachprocess.
Instructions
(a)Determinetheequivalentunitsofproductionandtheunitproductioncostsforthe
assemblydepartment.
(b)Determinetheassignmentofcoststogoodstransferredoutandinprocess.
(c)Prepareaproductioncostreportfortheassemblydepartment.
Determine P442AChenCompanymanufacturesbasketballs.Materialsareaddedatthebeginningofthe
equivalent
productionprocessandconversioncostsareincurreduniformly.Productionandcostdata
unitsand
forthemonthofJuly2012areasfollows:
unitcosts
ProductionDataBasketballs
Units
PercentComplete
andassign
Workinprocessunits,July1
500
60%
costs.
1,000
600
30%
CostDataBasketballs
Workinprocess,July1
$750
600
$1,350
Directmaterials
2,400
Directlabour
1,580
1,060
Workinprocessunits,July31
Materials
Conversioncosts
Instructions
(a)Calculatethefollowing:
1.
2.
3.
Theequivalentunitsofproductionformaterialsandconversioncosts
Theunitcostsofproductionformaterialsandconversioncosts
Theassignmentofcoststounitstransferredoutandinprocessattheendofthe
accountingperiod
(b)PrepareaproductioncostreportforthemonthofJulyforthebasketballs.
Calculate P443ALutherProcessingCompanyusesaweightedaverageprocesscostingsystemand
equivalent
manufacturesasingleproductapremiumrugshampooandcleaner.Thecompanyhas
unitsand
justcompletedthemanufacturingactivityforthemonthofOctober.Apartiallycompleted
completea
productioncostreportforthemonthofOctoberforthemixingdepartmentisshown
production
below.
cost
EquivalentUnits
report.
Physical
Conversion
Quantities
Units
Materials
Costs
Unitstobeaccountedfor
Workinprocess,October1(allmaterials,
70%conversioncosts)
Startedintoproduction
20,000
160,000
Physical
Units
Quantities
Totalunits
Unitsaccountedfor
Transferredout
Workinprocess,October31(60%
materials,40%conversioncosts)
Totalunitsaccountedfor
Costs
EquivalentUnits
Materials
Conversion
Costs
180,000
130,000
50,000
180,000
Materials
ConversionCosts
CostsinOctober
$240,000
$105,000
$345,000
Equivalentunits
Unitcosts
Unitcosts
Coststobeaccountedfor
$?
$?
Total
$?
Workinprocess,October1
$30,000
315,000
$345,000
CostReconciliationSchedule
Costsaccountedfor
Transferredout
$?
Materials
Conversioncosts
Totalcosts
$?
Totalcosts
(a)Prepareaschedulethatshowshowtheequivalentunitswerecalculatedsothatyou
cancompletetheQuantities:Unitsaccountedforequivalentunitssectionofthe
productioncostreport,andcalculateOctoberunitcosts.
Determine P444AAlbertaInstrumentCompanyusesaprocesscostingsystem.Aunitofproductpasses
assignmen
throughthreedepartmentsmoulding,assemblyandfinishingbeforeitiscompleted.
tofcosts.
ThefollowingactivitytookplaceinthefinishingdepartmentduringMay:
Workinprocessinventory,May1
Transferredinfromtheassemblydepartment
Units
1,900
14,000
Units
Transferredouttofinishedgoodsinventory
11,900
Rawmaterialisaddedatthebeginningofprocessinginthefinishingdepartment.The
workinprocessinventorywas70%completeintermsofconversioncostsonMay1and
40%completeintermsofconversioncostsonMay31.AlbertaInstrumentCompanyuses
theweightedaveragemethodofprocesscosting.Theequivalentunitsandcurrentperiod
costsperequivalentunitofproductionforeachcostfactorareasfollowsforthefinishing
department:
EquivalentUnits
CurrentPeriodCostsperEquivalentUnit
Transferredincosts
15,400
$6.00
Rawmaterials
15,400
2.00
Conversioncosts
13,300
4.00
Total
$12.00
Instructions
Calculatethefollowingamounts:
(a)ThecostofunitstransferredtofinishedgoodsinventoryduringMay
(b)Thecostofthefinishingdepartment'sworkinprocessinventoryonMay31
(adaptedfromCMACanada)
Determine *P445ABelowisinformationaboutABCLtd.,achemicalproducer,forthemonthofJune:
equivalent
Workinprocess,beginninginventory
25,000units
unitsusing
Transferredinunits100%complete
FIFO.
Directmaterials0%complete
Conversioncosts80%complete
TransferredinduringJune
175,000units
CompletedandtransferredoutduringJune
170,000units
Workinprocess,endinginventory
?units
Transferredinunits100%complete
Directmaterials0%complete
Conversioncosts40%complete
Instructions
(a)Howmanyunitsareinendingworkinprocessinventory?
(b)UnderFIFO,whataretheequivalentunitsofproductionforthemonthofJunefor
materials?
(c)UnderFIFO,whataretheequivalentunitsofproductionforthemonthofJunefor
conversioncosts?
Determine *P446ATheAllbrightBrickWorks,inWinnipeg,manufactureshighqualitybricksusedin
assignmen
residentialandcommercialconstruction.Thefirmissmallbuthighlyautomatedand
tofcosts
typicallyproducesabout300,000brickspermonth.Abrickiscreatedinacontinuous
using
productionoperation.Intheinitialstep,therawmaterial,amixtureofsoilsandwater,is
FIFO.
forcedintoabrickmouldmovingalongaconveyerbelt.Noothermaterialsareactually
requiredinthemanufactureofabrick.Eachbricktakesaboutthreedaystocomplete.
Theyspendthelast36hoursorsoontheconveyerbeltinanoventhatremovesmoisture
fromtheproduct.Theconveyerbeltspeedismonitoredandcontrolledbycomputer.The
firmusesaprocesscostingsystembasedonactualcostsinthreecostpoolsdirect
materials,directlabour,andfactoryoverheadtoassignproductioncoststooutput.Cost
andproductiondataforOctober2012follow:
ProductionData
Beginningworkinprocessinventory(100%completeintermsofdirect
materials;60%completeintermsofdirectlabour;36%completein
termsoffactoryoverhead)
Startedthisperiod
35,000
bricks
295,000
bricks
Endingworkinprocessinventory(100%completeintermsofdirect
materials;50%completeintermsofdirectlabour;40%completein
termsoffactoryoverhead)
30,000
bricks
CostData
Materials
DirectLabour
Overhead
Beginninginventory
$1,330
$435
$852
CostinOctober
12,200
15,000
18,180
Instructions
Determinethecostofbrickstransferredtofinishedgoodsinventoryandthecostof
bricksinendingworkinprocessinventoryforOctober2012.Assumethecompanyuses
theFIFOmethod.
Determine *P447AJessicaCompanymanufactureshockeypucksandsoccerballs.Forbothproducts,
equivalent
materialsareaddedatthebeginningoftheproductionprocessandconversioncostsare
unitsand
incurredevenly.JessicausestheFIFOmethodtocalculateequivalentunits.Production
unitcost,
andcostdataforthemonthofAugustareasfollows:
and
ProductionDataHockeypucks
Units
PercentComplete
preparea
Workinprocessunits,August1
500
70%
production
costreport
1,600
using
600
30%
FIFO.
CostDataHockeypucks
Workinprocess,August1
$1,125
Directmaterials
1,600
Directlabour
1,160
1,000
ProductionDataSoccerballs
CostDataSoccerballs
200
90%
2,000
150
60%
$450
Directmaterials
2,500
Directlabour
1,000
995
Instructions
(a)Calculatethefollowingforboththehockeypucksandthesoccerballs:
1.
2.
3.
Theassignmentofcoststounitstransferredoutandtoworkinprocessatthe
endoftheaccountingperiod
(b)PrepareaproductioncostreportforthemonthofAugustforthehockeypucksonly.
SOLUTIONS TO PROBLEMSSET A
PROBLEM 4-36A
(a)
Unit cost for beginning work in process inventory:

Direct material cost per unit:
Total material cost
$382,500
Equivalent units (850 100%)
850
$450.00
Conversion cost per unit:

Total conversion cost
Equivalent units (850 60%)
$255,000
510
$500.00
Total unit cost for beginning inventory
(b)

Started during the month
Total units in production
Less: ending work in process
Units completed and transferred out
$950.00
850
1,300
2,150
450
1,700
PROBLEM 4-37A
(a) Physical units
Total units
Units accounted for
Transferred out
Total units
(b) Equivalent units

4,000 100%
4,000 80%
(c)
Materials
Conversion costs
Total unit cost
0
30,000
30,000
26,000
4,000
30,000
Materials
26,000
4,000
30,000
Conversion
Costs
26,000
3,200
29,200
Unit Costs
$9.9333 ($298,000 30,000)
$7.2329 (($60,400 + $150,800) 29,200)
$17.1662 ($9.9333 + $7.2329) rounded
(d) Costs accounted for

$446,321
Materials (4,000 $9.9333)
Total costs
$509,200
$39,733
23,146
62,879
PROBLEM 4-37A (Continued)

(e)
KASTEN COMPANY
Molding Department
For the Month Ended June 30, 2012
Equivalent Units
Quantities
Physical
Units
(Step 1)

Total units
Units accounted for
Transferred out
Total units
Costs
Unit costs (Step 3)
Costs in June
Equivalent units
Unit costs (a) (b)
Total costs
Materials
Conversion
Costs
(Step 2)
0
30,000
30,000
26,000
4,000
30,000
26,000
4,000
30,000
Materials
(a) $298,000
(b) 30,000
$9.9333
26,000
3,200 (4,000 80%)
29,200
Conversion
Costs
$211,200
29,200
$7.2329
Total
$509,200
$17.1662
$ 0
509,200
$509,200

Costs accounted for
Materials (4,000 $9.9333)
Total costs
$446,321
$39,733
23,146
62,879
$509,200
(a) Calculation of equivalent unitsDept A
Beginning WIP
PROBLEM 4-38A
Equivalent Units
Materials (100%)
Conversion (30%)
Physical
Units
1,000
2,600
3,600
Equivalent Units
Trans
ConIn
Material Version
3,000
600
3,000
3,000
600
3,600
3,600
180
3,180
Calculation of equivalent unitsDept B
Beginning WIP in Dept B

Transferred in from Dept A
Department B
Transferred in (100%)
Conversion (40%)
Physical
Units
200
3,000
3,200
2,900
300
Equivalent Units
Trans
ConIn
Material Version
2,900
2,900
300
3,200
3,200
120
3,020
Per Unit Costs: Dept A

Beginning WIP
Costs added in the month
Equivalent units
Cost per equiv. unit
Per Unit Costs: Dept B

Beginning WIP
Costs added in the month
Total
Total
Trans
In
$ 15,000
218,625
$233,625
3,200
$284.9283 $73.0078
ConVersion
$ 30,000
132,000
162,000
3,180
$50.9434
Material
$24,000
64,000
$88,000
3,600
$24.4444
$75.3878
Equivalent units
Trans
In
ConMaterial Version
$ 40,000
600,000
$640,000
3,020
$211.9205
2,900 transferred in $75.3878/unit = $218,625
Work in ProcessDepartment B.................................... 218,625

Work in ProcessDepartment A.............................
218,625

(b)
SWEET CORPORATION
Department B
For the Month Ended October 31, 2012
Equivalent Units
Quantities
Transferred in
Total units
Units accounted for
Transferred out
Total units
Costs
Unit costs (Step 3)
Total costs
Equivalent units
Unit costs (a) (b)
Transferred in
Total costs
Physical
Units
Transferr
ed in
(Step 1)

200
3,000
3,200
2,900
300
3,200
Conversion
Costs
(Step 2)
2,900
300
3,200
2,900
120 (300 40%)
3,020
Transferr
ed in
Conversion
Costs
(a) $233,625
(b) 3,200
$73.0078
$640,000
3,020
$211.9205
Total
$873,625
$284.9283
$ 55,000
218,625
600,000
$873,625
Costs accounted for

Transferred in (300 $92.6953)
Total costs
$826,292
$21,902.3
4
25,430.4
6
47,333
$873,625
PROBLEM 4-39A
1.

Accounts Payable......................................
300,000
300,000
2.
Work in ProcessMixing.................................
Work in ProcessPackaging..........................
Raw Materials Inventory...........................
255,000
210,000
45,000
3.
Factory Labour..................................................
Wages Payable..........................................
248,900
248,900
4.
Work in ProcessMixing.................................
Factory Labour..........................................
248,900
182,500
66,400
5.
Accounts Payable......................................
790,000
790,000
6.
Work in ProcessMixing (28,000 $22).........

(6,000 $22)
Manufacturing Overhead..........................
748,000
616,000
132,000
7.
Work in ProcessMixing.........................
979,000
979,000
8.
Finished Goods Inventory................................

Work in ProcessPackaging...................
1,315,000
1,315,000
9.
Accounts Receivable........................................
2,500,000
Sales...........................................................
2,500,000
Cost of Goods Sold...........................................
Finished Goods Inventory........................
1,604,000
1,604,000
PROBLEM 4-40A
Calculation of cost per equivalent unit
Beginning WIP in Dept B

Transferred in from Dept A
Department B
Materials (0%)1
Conversion (37.5%)
Physical
Units
15,000
46,000
61,000
45,000
16,000
Equivalent Units
Trans
ConIn
Material version
45,000
45,000
45,000
16,000
0
61,000
61,000
45,000
6,000
51,000
Additional Material is added at the end in Department B.
Per Unit Costs:

Beginning WIP
Costs added in March
Equivalent units
1
Total
$2.616
46,000 transferred in $0.95/unit = $43,700
Trans
In
$ 9,500
$43,700 1
$53,200
61,000
$0.872
Material
$ 13,000
$ 13,000
45,000
$0.289
Conversion
$11,200
$63,000
$74,200
51,000
$1.455
(a)
Total
Cost of units
transferred out:
Units transferred out2
Cost per unit
Trans
In
Material
Conversion
45,000
$2.616
$117,720
Transferred to Finished Goods
Trans
Total
(b)
Cost of ending WIP

Material (0%)
Conversion (37.5%)
Cost per unit
In
ConMaterial
version
16,000
0
$22,682
$0.872
$13,952
$0.289
$ 0
6,000
$1.455
$8,730
PROBLEM 4-41A
(a)
Physical
Units
Total units
35,000
700,000
735,000
Units accounted for

Transferred out
Total units
710,000
25,000
735,000
Total
Cost per unit

Added during month
Equivalent units
Per unit cost
1
$3.05
Equivalent Units
Conversion
Materials
Costs
710,000
25,000
735,000
710,000
10,000
720,000
Materials
Conversion
Costs
$ 69,000
1,548,000
$1,617,000
$48,150
563,8501
612,000
735,000
720,000
$2.20
$0.85
$225,920 + $337,930 = $563,850
(b) Costs accounted for

Materials (25,000 $2.20)
$2,165,500
$55,000
8,500
63,500
Total costs
$2,229,000

(c)
CAVALIER COMPANY
Assembly Department
For the Month Ended November 30, 2012
Equivalent Units
Quantities
Physical
Units
(Step 1)

Total units
Units accounted for
Transferred out
Total units
Costs
Unit costs (Step 3)
Costs in November
Equivalent units
Unit costs (a) (b)
Total costs
Materials
Conversion
Costs
(Step 2)
35,000
700,000
735,000
710,000
25,000
735,000
710,000
25,000
735,000
Materials
(a) $1,617,000
(b) 735,000
$2.20
710,000
10,000 (25,000 40%)
720,000
Conversion
Costs
$612,000
720,000
$0.85
Total
$2,229,000
$3.05
$ 117,150
2,111,850
$2,229,000
Costs accounted for

Materials (25,000 $2.20)
Conversion costs
(10,000 $0.85)
Total costs
$2,165,500
$55,000
8,500
63,500
$2,229,000
PROBLEM 4-42A
(a) (1)
Physical
Units

Total units
500
1,000
1,500
Units accounted for

Transferred out
Total units
900
600
1,500
(2)
900
600
1,500
900
180
1,080
Materials
Conversion
Costs
$ 750
2,400
$3,150
$ 600
2,6401
$3,240
Equivalent units
1,500
1,080
Per unit cost
$2.10
$3.00
Cost per unit

Added during month
Equivalent Units
Conversion
Materials
Costs
$1,580 (Direct Labour) + $1,060 (Manufacturing Overhead)
(3) Costs accounted for
Transferred out (900 ($2.10+3.00)

Total costs
$4,590
$1,260
540
1,800
$6,390

(b)
CHEN COMPANY
Basketball Department
For the Month Ended July 31, 2012
Equivalent Units
Quantities
Total units
Units accounted for
Transferred out
Total units
Physical
Units
Materials
(Step 1)
(Step 2)
500
1,000
1,500
900
600
1,500
Costs
Unit costs (Step 3)
Costs in July
Equivalent units
Unit costs (a) (b)
Total costs
Conversion
Costs
(a)
(b)
900
600
1,500
900
180
1,080
Materials
Conversion
Costs
$3,150
1,500
$2.10
$3,240
1,080
$3.00
Total
$6,390
$5.10
$1,350
5,040
$6,390
Costs accounted for

Transferred out (900 $5.10)
Total costs
$4,590
$1,260
540
1,800
$6,390
PROBLEM 4-43A
(a) Computation of equivalent units:
Physical
Units
Units accounted for
Transferred out
Work in process, October 31
Materials (50,000 60%)
Conversion costs
(50,000 40%)
Total units
130,000
50,000
180,000
Equivalent Units
Conversion
Materials
Costs
130,000
30,000
160,000
130,000
20,000
150,000
Computation of October unit costs

Materials:$240,000 160,000 equivalent units =
$1.50
Conversion cost:$105,000 150,000 equivalent units =
.70
Total unit cost, October
$2.20
(b) Cost Reconciliation Schedule
Materials (30,000 $1.50)
Total costs
$286,000
$45,000
14,000
59,000
$345,000
PROBLEM 4-44A
(a) Cost of units transferred to finished goods:

11,90
0

Total cost per unit
$12.00
$142,800
(b)
Physical
Units
Total units
Units accounted for
Transferred out
Material (100%)
Conversion (40%)
Total units
Cost of WIP May 31

Material (100%)
Conversion (40%)
Total
4,000
Equivalent Units
Conversio
Materials
n
Costs
1,900
14,000
15,900
11,900
4,000
11,900
11,900
4,000
15,900
Trans
In
15,900
1,600
13,500
ConMaterial version
4,000
4,000
1,600
$6.00
Cost per unit

$38,400
$24,000
$2.00
$4.00
$8,000
$6,400
*PROBLEM 4-45A
(a)
Units in beginning work in process

Plus: transferred in
Total units in production
Less: completed and transferred out
Units in ending work in process
25,000
175,000
200,000
170,000
30,000
(b) and (c)

Physical
Units
Quantities
Transferred into production
Total units
Units accounted for
Work in process,
beginning
Transferred in and completed
Total units
Equivalent Units
Conversi
Trans Material
on
In
s
Costs
25,000
175,000
200,000
25,000
25,000 25,000
5,000
145,000 145,000 145,000
30,000
30,000
0
145,000
12,000

200,000 175,000 170,000 162,000
(b)
(c)
*PROBLEM 4-46A
Equivalent Units
Quantities
Physical
Material
Units
Labour
Overhead

Started this period
Total units
35,000
295,000
330,000
Units accounted for

35,000
Materials (0%)
Labour (40%1)
14,000
Overhead (64%2)
Materials (100%)
Labour (50%)
22,400
265,0003 265,000 265,000 265,000
30,000
30,000
15,000
Overhead (40%)
12,000
Total equivalent units (m)
330,000 295,000m 294,000m 299,400m
Current period costs (n)
$45,380 $12,200n $15,000n

$18,180n
Per equivalent unit cost
$0.1531 $0.0414 $0.0510 $0.0607
[(n) (m)]
1
Labour 60% complete, 40% to be completed

Overhead 36% complete, 64% to be completed
3
330, 000 35,000 (beginning WIP) 30,000 (ending WIP)
2

Costs for completed goods and ending work in process
Material Labour
Total
Beginning Inventory
$2,617

Labour (14,000 $0.0510)
Overhead (22,400 $0.0607)
2,073

Materials (265,000 $0.0414)
Labour (265,000 $0.0510)
Overhead (265,000 $0.0607)
40,572
$1,330
$435
Conver
sion
$852
0
714
1,359
10,971
13,515
16,086
$45,262 $12,301 $14,664 $18,297

2,735
Materials (30,000 $0.0414)
1,242
Labour (15,000 $0.0510)
765
Overhead (12,000 $0.0607)
728
Total costs $47,997 $13,543 $15,429 $19,025
*PROBLEM 4-47A
(a) A. HOCKEY PUCKS
Physical
Units
Quantities
Total units
500
1,600
2,100
Units accounted for

Work in process,
beginning
Total units
(1)
Equivalent units
Materials
Total
Equivalent units
Conversion
Total
100% Materials added, 0% to be added
500
1,000
600
2,100
Physical
Units
500
1,000
600
2,100
Physical
Units
500
1,000
600
2,100
2
Materials
Added
This Period
0%1
100%
100%
Conversion
Added
This Period
30%2
100%
30%
Equivalent
Units
0
1,000
600
1,600
Equivalent
Units
150
1,000
180
1,330
70% completed, 30% to be added
*PROBLEM 4-47A (Continued)

(2) Unit costs
Costs in August (a)
Unit costs [(a) (b)]
3
Materials
Conversion
$1,600
1,600
$1.00
$2,1603
1,330
$1.624
Direct Labour, $1,160 + Manufacturing Overhead, $1,000
(3) Costs for completed goods and ending work in process
Beginning WIP
Materials (0 $1.00)
Conversion (150 $1.624)
Materials (1,000 $1.00)
Total
Beg
WIP
$1,125
$1,125
Materi
als
Conver
sion
244
$244
2,624
Ending WIP
892
Total costs $4,885
$1,000
1,624
600
$1,125
$1,600
292
$2,160

B. SOCCER BALLS
Physical
Units
Quantities
Total units
Units accounted for
Work in process,
beginning
Total units
(1) Equivalent units
Materials
Total
Equivalent units
Conversion
Total
Physical
Units
200
1,850
150
2,200
Physical
Units
200
1,850
150
2,200
200
2,000
2,200
200
1,850
150
2,200
Materials
Added
This Period
0%4
100%
100%
Conversion
Added
This Period
10%5
100%
60%
Equivalent
Units
0
1,850
150
2,000
Equivalent
Units
20
1,850
90
1,960
100% completed as to materials, 0% to be added

be added
90% completed, 10% to

(2) Unit costs
Costs in August (a)

6
Materials
Conversion
$2,500
2,000
$1.250
$1,9956
1,960
$1.018
Direct Labour $1,000 + Manufacturing Overhead $995
(3) Costs for completed goods and ending work in process

Total
Materials (1,850 $1.250)
$450
20
Beg
WIP
Materi
als
Conver
sion
$450
$20
4,195
$2,312
$4,665

280
Total costs $4,945
$450
$2,312
1,883
$1,903
188
$450
$2,500
92
$1,995

(b)
JESSICA COMPANY
Production Cost ReportHockey pucks
For the Month Ended August 31
Quantities
Work in process, August 1
Total units
Units accounted for
Total units
Costs
Unit costs
Costs in August (a)
Added into production
Total costs
Costs accounted for
Transferred out
Conversion costs to complete
beginning inventory (150 $1.624)
Started and completed (1,000 $2.624)
Materials (600 $1)
Total costs
*($1,600 + $1,160 + $1,000)
Physical
Units
Equivalent Units
Conversion
Materials
Costs
500
1,600
2,100
500
1,000
600
2,100
0
1,000
600
1,600
150
1,000
180
1,330
$1,600
1,600
$1.00
$2,160
1,330
$1.624
$1,125
3,760*
$4,885
$1,125
244
2,624
$ 600
292
$3,993
892
$4,885
Problems:SetB
Analyze *P448BUnitedDominionManufacturingCo.producesawoodrefinishingkitthatsellsfor
aprocess
$17.95.Thefinalprocessingofthekitsoccursinthepackagingdepartment.Aquilted
costing
wrapisappliedatthebeginningofthepackagingprocess.Acompartmentedoutsidebox
system
printedwithinstructionsandthecompany'snameandlogoisaddedwhenunitsare70%
and
throughtheprocess.Conversioncosts,consistingofdirectlabourandappliedoverhead,
calculate
occurevenlythroughoutthepackagingprocess.Conversionactivitiesafterthecompletion
equivalen
oftheboxincludepackagesealing,testingforleakage,andfinalinspection.The
tunits
followingdataareforthepackagingdepartment'sactivitiesduringthemonthofOctober:
andunit
costs.
1. Beginningworkinprocessinventorywas10,000units,60%completeintermsof
conversioncosts.
2. Duringthemonth,40,000unitsweretransferredtopackaging.
3. Therewere10,000unitsinendingworkinprocess,70%completeintermsof
conversioncosts.
Thepackagingdepartment'sOctobercostswereasfollows:
Quiltedwrap
$80,000
Outsideboxes
50,000
Directlabour
22,000
Appliedoverhead($3.00/perdirectlabourdollar)
66,000
Thecoststransferredinfrompriorprocessingwere$3.00perunit.Thecostofgoodssold
forthemonthwas$240,000,andtheendingfinishedgoodsinventorywas$84,000.
UnitedDominionManufacturingCo.usestheFIFOmethodforprocesscosting.
Instructions
(a)PrepareascheduleofequivalentunitsfortheOctoberactivityinthepackaging
department.
(b)DeterminethecostperequivalentunitfortheOctoberproduction.
Calculate P449BMontrealLeatherCompanymanufactureshighqualityleathergoods.Oneofthe
equivalen
company'smainproductsisafineleatherbelt.Thebeltsareproducedinasingle,
tunits,
continuousprocessinitsQuebecplant.Duringtheprocess,leatherstripsaresewn,
unitcosts,
punched,anddyed.Thebeltsthenenterafinalfinishingstagetoconcludetheprocess.
andcosts
Labourandoverheadareappliedcontinuouslyduringthemanufacturingprocess.All
assigned.
materials,leatherstrips,andbucklesareintroducedatthebeginningoftheprocess.The
firmusestheweightedaveragemethodtocalculateitsunitcosts.
TheleatherbeltsproducedattheQuebecplantaresoldwholesalefor$9.85each.
Managementwantstocomparethecurrentmanufacturingcostperunitwiththemarket
pricesforleatherbelts.TopmanagementhasaskedtheQuebecplantcontrollertosubmit
dataonthecostofmanufacturingtheleatherbeltsforthemonthofOctober.Thesecost
datawillbeusedtodeterminewhethermodificationsintheproductionprocessshouldbe
initiatedorwhetheranincreaseinthebelts'sellingpriceisjustified.Thecostperbeltused
forplanningandcontrolis$4.85.
Theworkinprocessinventoryconsistedof12,200partiallycompletedunitsonOctober1.
Thebeltswere45%completeintermsofconversioncosts.Thecostsincludedinthe
inventoryonOctober1wereasfollows:
Leatherstrips
$3,000
Buckles
750
Conversioncosts
900
Total
$4,650
DuringOctober,22,800leatherstripswereplacedintoproduction.Atotalof21,000
leatherbeltswerecompleted.TheworkinprocessinventoryonOctober31consistedof
14,000belts,whichwere50%completeintermsofconversioncosts.
ThecostschargedtoproductionduringOctoberwereasfollows:
Leatherstrips
$61,800
Buckles
13,650
Conversioncosts
62,100
Total
$137,550
Instructions
InordertoprovidecostdataonthemanufactureofleatherbeltsintheQuebecplanttothe
topmanagementofMontrealLeatherCompany,calculatethefollowingamountsforthe
monthofOctober:
(a)Theequivalentunitsformaterialsandconversioncosts
(b)TheassignmentofproductioncoststotheOctober31workinprocessinventoryand
togoodstransferredout
(c)Theweightedaverageunitcostoftheleatherbeltscompletedandtransferredto
finishedgoods.Commentonthecostperbeltthatthecompanyusesforplanningand
control.
Calculate *P450BThefollowinginformationisforproductionactivitiesintherefiningdepartmentofPetro
equivalen
PureCorporation.Allunitsinworkinprocess(WIP)werecostedusingtheFIFOcost
tunits,
system.
unitcosts,
Percentageof
Conversion
andcosts
RefiningDepartment
Units
Completion
Costs
assigned
WIP,February1
25,000
70%
$22,000
with
FIFO.
Unitsstartedandcostsincurred
135,000
143,000
duringFebruary
Unitscompletedandtransferredto
themixingdepartment
WIP,February28
100,000
60%
Instructions
(a)Calculatetheconversioncostsperequivalentunitofproductionduringthelastperiod
andthisperiod.
(b)CalculatetheconversioncostintheworkinprocessinventoryaccountatFebruary28.
(c)Calculatetheperunitconversioncostoftheunitsstartedlastperiodandcompleted
thisperiod.
Preparea *P451BPetroPureCorporationmanufactureschemicaladditivesforindustrialapplications.As
production
thenewcostaccountant,youhavebeenassignedthetaskofcompletingtheproduction
costreport
costreportforthemostrecentperiod.ThecompanyusestheFIFOmethodofprocess
using
costing.Thefollowinginformationisforthemostrecentperiod:
FIFO.
ProductionDataUnits
BeginningWIPinventory(75%completeintermsofmaterials;70%
completeintermsofconversioncosts)
18,000
Unitsstartedintoproductionthisperiod
27,000
Unitscompletedandtransferredout
33,000
EndingWIPinventory(60%completeintermsofmaterials;50%complete
intermsofconversioncosts)
12,000
CostData
Beginninginventory:
ProductionDataUnits
Materials
$32,000
Conversioncosts
64,000
Currentperiod:
Materials
252,000
Conversioncosts
440,000
Instructions
PrepareacompleteproductionreportfortheperiodusingtheFIFOmethod.(Roundthe
costperequivalentunittothreedecimalplaces;roundthecostsinthecostreporttothe
nearestdollar.)
Determine *P452BNationalCompanymanufacturesbicyclesandtricycles.Forbothproducts,materialsare
equivalent
addedatthebeginningoftheproductionprocess,andconversioncostsareincurred
unitsand
uniformly.NationalCompanyusestheFIFOmethodtocalculateequivalentunits.
unitcosts
ProductionandcostdataforthemonthofMayareasfollows:
andassign
ProductionDataBicycles
Units
PercentComplete
costsfor
Workinprocessunits,May1
300
70%
processes;
preparea
1,200
production
500
30%
cost
report.
CostDataBicycles
Workinprocess,May1
$17,400
Directmaterials
48,000
Directlabour
19,400
30,420
ProductionDataTricycles
Units
PercentComplete
100
75%
900
200
40%
CostDataTricycles
Workinprocess,May1
$8,000
Directmaterials
63,000
Directlabour
31,060
45,415
Instructions
(a)Calculatethefollowingforboththebicyclesandthetricycles:
1. Theequivalentunitsofproductionformaterialsandconversioncosts

2. Theunitcostsofproductionformaterialsandconversioncosts
3. Theassignmentofcoststounitstransferredoutandinprocessattheendof
theaccountingperiod
(b)PrepareaproductioncostreportforthemonthofMayforthebicyclesonly.
Complete P453BBicnellCorporationmanufactureswaterskisthroughtwoprocesses:mouldingand
thefour
packaging.Inthemouldingdepartment,fibreglassisheatedandshapedintotheformofa
steps
ski.Inthepackagingdepartment,theskisareplacedincartonsandsenttothefinished
necessary
goodswarehouse.Materialsareenteredatthebeginningofbothprocesses.Labourand
toprepare
manufacturingoverheadareincurreduniformlythroughouteachprocess.Productionand
a
costdataforthemouldingdepartmentforJanuary2012arepresentedbelow:
production
ProductionData
January
cost
Beginningworkinprocessunits
0
report.
42,500
Endingworkinprocessunits
2,500
Percentcompleteendinginventory
40%
CostData
Materials
$510,000
Labour
Overhead
Total
Instructions
96,000
150,000
$756,000
(a)Calculatethephysicalunitsofproduction.
(b)Determinetheequivalentunitsofproductionformaterialsandconversioncosts.
(c)Calculatetheunitcostsofproduction.
(d)Determinethecoststobeassignedtotheunitstransferredoutandinprocess.
(e)Prepareaproductioncostreportforthemouldingdepartmentforthemonthof
January.
Complete *P454BMeethaCorporationisinthecandymanufacturingbusiness.Productsgothroughtwo
thefour
productiondepartments(Afirst,thenB).DatafromthosedepartmentsforSeptember
steps
2012arepresentedbelow.
necessary
DepartmentA
DepartmentB
toprepare
Beginningworkinprocess Beginningworkinprocess
a
production
Numberofunits
1000
200
cost
100%
report.
100%
60%
30%
Totalmaterialscost
$24,000
Totalconversioncost
$30,000
$40,000
$15,000
Totaltransferredincosts
Numberofunits
Endingworkinprocess
Endingworkinprocess
600
300
100%
100%
30%
40%
MeethaCorporationstarted2,600unitsofproductduringthemonthindepartmentA.
CostsincurredindepartmentAforSeptember2012totalled$64,000formaterialand
$132,000forconversion.Additionally,departmentBincurredconversioncostsin
September2012of$600,000.DepartmentBaddsnomaterialstotheproduct.
Instructions
(a)JournalizethetransferofgoodsfromdepartmentAtodepartmentBduring
September2012.MeethaCorporationaccountsforitscostsusingtheFIFOmethod.
(b)PrepareaproductioncostreportfordepartmentBforSeptember2012.
Journalize P455BMcNallyCompanymanufacturesanutrient,Everlife,throughtwomanufacturing
transactions.
processes:blendingandpackaging.Allmaterialsareenteredatthebeginningofeach
process.OnAugust1,2012,inventoriesconsistedof$5,000inRawMaterials,$0in
WorkinProcessBlending,$3,945inWorkinProcessPackaging,and$7,500in
FinishedGoods.Thebeginninginventoryforpackagingconsistedof500units,twofifths
completeintermsofconversioncostsandfullycompleteintermsofmaterials.During
August,9,000unitswerestartedintoproductioninblending,andthefollowing
transactionswerecompleted:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Issuedrawmaterialsforproduction:blending$18,930andpackaging$9,140.
Incurredlabourcostsof$23,770.
Usedfactorylabour:blending$13,320andpackaging$10,450.
Incurred$41,500ofmanufacturingoverheadonaccount.
Appliedmanufacturingoverheadattherateof$25permachinehour.Machine
hourswere900forblendingand300forpackaging.
Transferred8,200unitsfromblendingtopackagingatacostof$44,940.
Transferred8,600unitsfrompackagingtoFinishedGoodsatacostof$67,490.
Soldgoodscosting$62,000for$90,000onaccount.
Instructions
JournalizetheAugusttransactions.
AssigncostsP456BCrosbyCompanyhasseveralprocessingdepartments.Costschargedtotheassembly
andprepare
departmentforOctober2012totalled$1,249,500,asfollows:
aproduction
costreport.
Materials
$29,000
Conversioncosts
16,500
$45,500
Materialsadded
1,006,000
Labour
90,000
Overhead
108,000
Productionrecordsshowthat25,000unitswereinbeginningworkinprocess,40%
completeintermsofconversioncosts;425,000unitswerestartedintoproduction;and
35,000unitswereinendingworkinprocess,40%completeintermsofconversioncosts.
Materialsareenteredatthebeginningofeachprocess.
Instructions
(a)Determinetheequivalentunitsofproductionandtheunitproductioncostsforthe
assemblydepartment.
(b)Determinetheassignmentofcoststogoodstransferredoutandinprocess.
(c)Prepareaproductioncostreportfortheassemblydepartment.
Determin
e
equivalen
tunits
andunit
costs,and
assign
costs.
P457BSarkuCompanymanufacturesbicyclesandtricycles.Forbothproducts,materialsare
addedatthebeginningoftheproductionprocess,andconversioncostsareincurred
uniformly.ProductionandcostdataforthemonthofMayareasfollows:
Units
PercentComplete
500
80%
1,500
800
25%
CostDataBicycles
Workinprocess,May1
$15,000
18,000
$33,000
50,000
Materials
Conversioncosts
Directmaterials
Units
PercentComplete
Directlabour
18,320
33,680
Instructions
(a)Calculatethefollowing:
1.
2.
3.
Theassignmentofcoststounitstransferredoutandinprocessattheendof
theaccountingperiod
(b)PrepareaproductioncostreportforthemonthofMayforthebicycles.
Calculate
equivalent
unitsand
completea
production
costreport.
P458BWindsorCleanerCompanyusesaweightedaverageprocesscostingsystemand
manufacturesasingleproductanallpurposeliquidcleaner.Thecompanyhasjust
completedthemanufacturingactivityforthemonthofMarch.Apartiallycompleted
productioncostreportforthemonthofMarchforthemixingandblendingdepartment
isshownbelow.
WINDSORCLEANERCOMPANY
MixingandBlendingDepartment
ProductionCostReport
FortheMonthEndedMarch31
EquivalentUnits
Physica
lUnits
Material
s
Conversio
nCosts
Unitstobeaccountedfor
Workinprocess,March1
(40%materials,20%
conversioncosts)
10,000
100,00
0
Totalunits
110,00
0
95,000
15,000
110,00
0
Quantities
UnitsaccountedforTransferred
out
Workinprocess,March31(
materials,
ncosts)
conversio
Totalunitsaccountedfor
Costs
Material
s
Conversio
nCosts
Unitcosts
CostsinMarch
$156,00
0
$98,000
Equivalentunits
Unitcosts
$?
$
8,700
245,300
$254,00
0
CostReconciliationSchedule
Costsaccountedfor
Coststobeaccountedfor
Totalcosts
$?
Total
$254,00
0
$?
WINDSORCLEANERCOMPANY
MixingandBlendingDepartment
ProductionCostReport
FortheMonthEndedMarch31
Quantities
Physica
lUnits
EquivalentUnits
Material
s
Conversio
nCosts
Transferredout
$?
Materials
Conversioncosts
Totalcosts
$?
Instructions
(a)Prepareaschedulethatshowshowtheequivalentunitswerecalculatedsothatyou
cancompletetheQuantities:Unitsaccountedforequivalentunitssectioninthe
productioncostreportabove,andcalculateMarchunitcosts.
(b)CompletetheCostReconciliationSchedulepartoftheproductioncostreport
above.
Determine *P459BMaloneyCompanymanufactureshockeypucksandsoccerballs.Forbothproducts,
equivalent
materialsareaddedatthebeginningoftheproductionprocessandconversioncostsare
unitsand
incurreduniformly.MaloneyusestheFIFOmethodtocalculateequivalentunits.
unitcosts
ProductionandcostdataforthemonthofAugustareasshownbelow.
andassign
ProductionDataHockeypucks
Units
PercentComplete
costsfor
500
60%
processes
using
1,600
FIFO;
600
50%
preparea
production
CostDataHockeypucks
cost
$1,125
report.
Directmaterials
1,600
Directlabour
1,175
1,000
ProductionDataSoccerballs
CostDataSoccerballs
Units
PercentComplete
200
80%
2,000
150
70%
$450
Directmaterials
2,600
Directlabour
1,000
995
Instructions
(a)Calculatethefollowingforboththehockeypucksandthesoccerballs:
1.
2.
3.
Theassignmentofcoststounitstransferredoutandinprocessattheendof
theaccountingperiod
(b)PrepareaproductioncostreportforthemonthofAugustforthehockeypucksonly.
SOLUTIONS TO PROBLEMSSET B
*PROBLEM 4-48B
(a)
Quantities

Started this period
Total units
Units accounted for
Materials-1 (0%)
Materials-2 (100%)
Conversion (40%1)
Materials-1 (100%)
Materials-2 (100%)*
Conversion (70%)
Equivalent Units
Material Material Convers
Physical
s
s
ion
Units
(1)
(2)
Costs
10,000
40,000
50,000
10,000
10,000
30,000
10,000
30,000 30,000
4,000
30,000
10,000
10,000
50,000
40,000 50,000
7,000
41,000
Current period costs
$80,000 $50,000
$88,000
(b) Per equivalent unit cost

1
($2.00 + $1.00 + $2.15)
*material is added at 70%

1
$5.151
$2.00
$1.00
$2.15
PROBLEM 4-49B
Equivalent Units
(a)
Quantities

Started this period
Total units
Units accounted for
Completed
Strips (100%)
Buckles (100%)
Conversion (50%)
(b)
Physical
Units
Strips
12,200
22,800
35,000
21,000
14,000
21,000
21,000
14,000
35,000
35,000
Strips
Costs
Added during the month
21,000
14,000
TOTAL

Conversi
Buckles
on
Costs
35,000
7,000
28,000m
Conversi
Buckles
on
Costs
$4,650
$3,000
$750
$900
$137,550
61,800
13,650
62,100
Total costs (n)
$142,200 $64,800n $14,400n $63,000n
Per equivalent unit cost

[(n) (m)]
$4.51281 $1.8514 $0.4114
($1.8514 + $0.4114 + $2.25)
$2.25
PROBLEM 4-49B (Continued)
Cost accounted for as follows:
TOTAL

(21,000 $4.5128)
$94,769

Strips (14,000 $1.8514)
Buckles (14,000 $0.4114)
Total costs
Strips
Convers
Buckles
ion
Costs
$47,430
$25,920
$5,760
$15,750
$142,199
(c) The weighted-average cost of a completed belt is $4.5128 each.

This is less than the planning and control cost for a belt, which might
indicate that no modifications in the production process are required.
However, companies should practice continuous improvement, and
still look for ways that could reduce their manufacturing costs, and
increase their gross margin.
Management should also investigate the accuracy of their control
cost of $4.85, as it may be out of date, and does not reflect actual
experience.
*PROBLEM 4-50B
(a) (1) Per unit conversion cost for last period:
Number of units transferred
25,000
Percentage completed
70%
= Equivalent units
17,500
Cost assigned
$22,000
Per unit conversion cost last period
$1.257
(2) Per unit conversion cost for this period:
Equivalent units this period:
Complete beginning inventory (30%1 25,000)
Started and completed (100,000 25,000)
Started ending inventory (60% 60,000*)
Total equivalent units for the current period
1
7,500
75,000
36,000
118,500
70% completed, 30% to be added
Per unit conversion cost this period:

$143,000 118,500 = $1.2067
*Calculation of units in ending inventory: 25,000 + 135,000 100,000
(b) Equivalent units, ending inventory
(60,000* 60%)
Conversion per unit cost
Total conversion cost in ending inventory
(c) Per unit cost of units in beginning inventory:
70% completed last month at a rate of $1.257
30% completed this month at a rate of $1.2067
Weighted-average unit cost
36,000
$1.2067
$43,441
$0.88
$0.36
$1.24
*PROBLEM 4-51B
PETRO-PURE CORPORATION
For the current period
Quantities
Started this period
Total units
Units accounted for
Materials (25%)
Conversion (30%)
Materials (60%)
Conversion (50%)
Physical
Units
18,000
27,000
45,000
18,000
4,500
15,000
12,000
15,000
5,400
15,000
7,200
45,000
Costs added this period

Cost per equivalent unit [(s) (t)]
Equivalent Units
Conversion
Materials
Costs
$26.105
26,700
6,000
26,400
$252,000
$440,000
$9.438
$16.667
*PROBLEM 4-51B (Continued)

Costs
Added this period
Total costs
Material (4,500 $9.438)
Conversion (5,400 $16.667)
Started and Completed
(15,000 $26.105)
Material (7,200 $9.438)
Conversion (6,000 $16.667)
Total costs
TOTAL
Materials
Conversion
Costs
$96,000
692,000
$788,000
$32,000
252,000
$284,000
$64,000
440,000
$504,000
$96,000
132,471
$32,000
$64,000
42,471
90,000
391,575
167,954
141,575
250,000
67,954
100,000
$788,000
$284,000
$504,000
(a)
*PROBLEM 4-52B
A. BICYCLES
Physical
Units
Quantities
Total units
Units accounted for
Work in process,
beginning
Total units
300
1,200
1,500
300
700
500
1,500
(1) Equivalent unitsMaterials

Physical
Units
Total
300
700
500
1,500
Materials
Added
This Period
0%
100%
100%
Equivalent
Units
0
700
500
1,200
Equivalent unitsConversion
Physical
Units
Total
300
700
500
1,500
Conversion
Added
This Period
30%
100%
30%
Equivalent
Units
90
700
150
940

(2) Unit costs
Costs in the month (a)

Materials
Conversion
$48,000
1,200
$40.00
$49,8201
940
$53.00
Direct Labour $19,400 + Manufacturing Overhead $30,420
(3)
Costs
Added this period
Total costs
Material (0 $40.00)
(700 $93.00)
Total cost of units completed
Material (500 $40.00)
Total costs
TOTAL
Materials
Conversion
Costs
$17,400
97,820
$115,220
$17,400
4,770
$4,770
65,100
87,270
$28,000
37,100
27,950
20,000
7,950
$115,220

B. TRICYCLES
Physical
Units
Quantities
Total units
Units accounted for
Work in process,
beginning
Total units
100
900
1,000
100
700
200
1,000

Physical
Units
Total
100
700
200
1,000
Materials
Added
This Period
0%
100%
100%
Equivalent
Units
0
700
200
900
Physical
Units
Total
100
700
200
1,000
Conversion
Added
This Period
25%
100%
40%
Equivalent
Units
25
700
80
805

(2) Unit costs

Materials
Conversion
$63,000
900
$70.00
$76,4751
805
$95.00
Direct Labour $31,060 + Manufacturing Overhead $45,415
(3)
Costs
Added this period
Total costs
Material (0 $70.00)
(700 $165.00)
Material (200 $70.00)
Total costs
TOTAL
Materials
Conversion
Costs
8,000
139,475
$147,475
$8,000
2,375
$2,375
115,500
125,875
$49,000
66,500
21,600
14,000
7,600
$147,475

(b)
NATIONAL COMPANY
Production Cost ReportBicycles
For the Month Ended May31
Quantities
Total units
Units accounted for
Total units
Physical
Units
Equivalent Units
Conversion
Materials
Costs
300
1,200
1,500
300
700
500
1,500
0
700
500
1,200
90
700
150
940
Costs
Materials
Conversion
Unit costs (Step 3)

$48,000
1,200
$40.00
$49,820
940
$53.00

Total costs
Costs accounted for
Transferred out
Started and completed (700 $93.00)
Materials (500 $40)
$17,400
97,820*
$115,220
$17,400
4,770
65,100
$20,000
7,950
$87,270
27,950
$115,220
*($50,000 + $25,200 + $30,000)
PROBLEM 4-53B
(a)
Quantities
Started this period
Total units
Units accounted for
Materials (100%)
Conversion (40%)
Costs added this period
Cost per equivalent unit [(s) (t)]
(d)
Costs
Added this period
Total costs
(40,000 $18.00)
Material (2,500 $12.00)
Total costs
Physical
Units
Equivalent Units
Conversion
Materials
Costs
0
42,500
42,500
40,000
2,500
40,000
40,000
2,500
42,500
$18.00
1,000
42,500 (b) 41,000
$510,000
$246,000
$12.00 (c)
$6.00
TOTAL
Materials
Conversion
Costs
$
0
$756,000
$756,000
$510,000
$510,000
$246,000
$246,000
$480,000
$240,000
$720,000
36,000
30,000
$756,000
$510,000
6,000
$246,000

(e)
BICNELL CORPORATION
Molding Department
For the Month Ended January 31, 2012
Equivalent Units
Quantities
Physical
Units
Materials
(Step 1)
Work in process, January 1
Total units
0
42,500
42,500
Units accounted for

Transferred out
Total units
40,000
2,500
35,000
Costs
Unit costs (Step 3)
Costs in January
Equivalent units
Unit costs (a) (b)
Total costs
Conversion
Costs
(Step 2)
40,000
2,500
35,000
Materials
(a) $510,000
(b) 42,500
$12
40,000
1,000 (2,500 40%)
41,000
Conversion
Costs
$246,000
41,000
$6
Total
$756,000
$18
$
0
756,000
$756,000
Costs accounted for

Transferred out (40,000 $18)
Materials (2,500 $12)
Conversion costs (1,000 $6)
Total costs
$720,000
$30,000
6,000
36,000
$756,000
*PROBLEM 4-54B
Department A
Physical
Units
Quantities
Total units
Units accounted for
Work in process,
beginning
Total units
1,000
2,600
3,600
1,000
2,000
600
3,600

Physical
Units
Total
1,000
2,000
600
3,600
Materials
Added
This Period
0%
100%
100%
Equivalent
Units
0
2,000
600
2,600
Physical
Units
Conversion
Added
This Period
Equivalent
Units

Total
1,000
2,000
600
3,600
40%
100%
30%
400
2,000
180
2,580

Unit costs
Materials
Conversion
$64,000
2,600
$24.6154
$132,000
2,580
$51.1628
Costs
Added this period
Total costs
Material (0 $24.6154)
(2,000 $75.7782)
Material (600 $24.6154)
Total costs
TOTAL
Materials
Conversion
Costs
$ 54,000
196,000
$250,000
$54,000
20,465
0
$20,465
151,557
226,022
$49,231
102,326
23,978
14,769
9,209
$250,000
(a) Work in ProcessDepartment B................................. 226,022

Work in ProcessDepartment A........................
226,022

Department B
Physical
Units
Quantities
Transferred into production
Total units
Units accounted for
Work in process,
beginning
Transferred in and completed
Total units
200
3,000
3,200
200
2,700
300
3,200
(1) Equivalent unitsTransferred in

Physical
Units
Transferred in & completed
Total
200
2,700
300
3,200
Materials
Added
This Period
0%
100%
100%
Equivalent
Units
0
2,700
300
3,200
Physical
Units
Total
200
2,700
300
3,200
Conversion
Added
This Period
70%
100%
40%
Equivalent
Units
140
2,700
120
2,960

Unit costs
Transferred
-in
$226,022
3,000
Conversion
$75.3407
$202.7027
Costs
Transferred-in costs
Added in the month
Total costs
Conversion (140 $202.7027)
Transferred-in & completed
Trans-in (2,700 $75.3407)
Conver. (2,700 $202.7027)
Trans-in (300 $75.3407)
Conversion (120 $202.7027)
Total costs
$600,000
2,960
TOTAL
Transferre
d-in
Conversion
Costs
$ 55,000
226,022
600,000
$881,022
$55,000
28,379
$28,379
750,717
203,420
547,297
834,096
46,926
22,602
24,324
$881,022

(b)
METHA CORPORATION
Department B
For the Month Ended September 30, 2012
Equivalent Units
Quantities
Transferred in
Total units
Units accounted for
Total units
Costs
Unit costs
Total costs for the month
Equivalent units
Unit costs (a) (b)
Transferred in
Total costs
Physical
Units
Transferr
ed in
Conversion
Costs

200
3,000
3,200
200
2.700
300
3,200
(a)
(b)
0
2,700
300
3,000
$226,022
3,000
$75.3407
140
2,700
120 (300 40%)
2,960
Total
$600,000
2,960
$202.7027
$826,022
$278.0434
$ 55,000
226,022
600,000
$881,022
Costs accounted for:

Transferred out:
Complete beginning WIP (140 $202.7027)
Transferred in & completed (2,700 $278.0434)
Transferred in (300 $75.3407)
Total costs
$55,000
28,379
750,717
$22,602
24,324
$834,096
46,926
$881,022
PROBLEM 4-55B
1.
Raw Materials Inventory..............................................

Accounts Payable................................................
25,000
25,000
2.
Work in ProcessBlending........................................
Work in ProcessPackaging.....................................
Raw Materials Inventory......................................
28,070
18,930
9,140
3.
Factory Labour.............................................................
Wages Payable.....................................................
23,770
23,770
4.
Work in ProcessBlending........................................ 13,320

Work in ProcessPackaging..................................... 10,450
Factory Labour.....................................................
23,770
5.
Manufacturing Overhead............................................
Accounts Payable................................................
41,500
41,500
6.
Work in ProcessBlending (900 $25)....................

Work in ProcessPackaging (300 $25)..................
Manufacturing Overhead.....................................
30,000
22,500
7,500
7.
Work in ProcessPackaging.....................................
Work in ProcessBlending................................
44,940
44,940
8.
Finished Goods Inventory..........................................

Work in ProcessPackaging.............................
67,490
67,490
9.
Accounts Receivable...................................................
Sales......................................................................
90,000
90,000
Cost of Goods Sold.....................................................

Finished Goods Inventory...................................
62,000
62,000
PROBLEM 4-56B
Quantities
Started this period
Total units
Units accounted for
Materials (100%)
Conversion (40%)
(a)(1) Total equivalent units
Physical
Units
25,000
425,000
450,000
415,000
35,000
Costs
Added this period
Total costs for this period
415,000
415,000
35,000
450,000
14,000
429,000
$1,035,000
$214,500
$2.30
$0.50
TOTAL
Materials
Conversion
Costs
$45,500
1,204,000
$1,249,500
$29,000
1,006,000
$1,035,000
$16,500
198,000
$214,500
450,000
Costs for this period (see below)

(2) Cost per equivalent unit
Equivalent Units
Conversion
Materials
Costs
$2.80
TOTAL
(b) Cost accounted for as follows:
(415,000 $2.80)
$1,162,000
87,500
Material (35,000 $2.30)
Total costs
$1,249,500
(c)
Materials
Conversion
Costs
$954,500
$207,500
80,500
$1,035,000
7,000
$214,500
CROSBY COMPANY
Assembly Department
For the Month Ended October 31, 2012
Equivalent Units
Quantities
Total units
Units accounted for
Transferred out
Total units
Physical
Units
(Step 1)
Materials
Conversion
Costs
(Step 2)
25,000
425,000
450,000
415,000
35,000
450,000
415,000
35,000
450,000
415,000
14,000 (40,000 40%)
429,000

Costs
Materials
Unit costs (Step 3)
Costs in October
Equivalent units
Unit costs (a) (b)
(a) $1,035,000
(b) 450,000
$2.30
Conversion
Costs
$214,500
429,000
$0.50

Total costs
Total
$1,249,500
$2.80
$ 45,500
1,204,000
$1,249,500

Costs accounted for
Materials (35,000 $2.30)
Conversion costs (14,000 $.50)
Total costs
$1,162,000
$80,500
7,000
87,500
$1,249,500
PROBLEM 4-57B
(a)
Quantities
Started this period
Total units
Units accounted for
Materials (100%)
Conversion (25%)
(1) Total equivalent units
Physical
Units
500
1,500
2,000
1,200
800
Costs
Added this period
Total costs
1,200
1,200
800
2,000
200
1,400
$65,000
$70,000
$32.50
$50.00
TOTAL
Materials
Conversion
Costs
$33,000
102,000
$135,000
$15,000
50,000
$65,000
2,000

(2) Cost per equivalent unit
Equivalent Units
Conversion
Materials
Costs
$82.50
$18,000
52,000
$70,000

(3) Cost accounted for as follows:
(1,200 $82.50)
Material (800 $32.50)
Total costs
(b)
$99,000
36,000
$39,000
26,000
$135,000
$65,000
SARKU COMPANY
Bicycle Department
For the Month Ended May 31, 2012
Equivalent Units
Quantities
$60,000
Physical
Units
Materials
(Step 1)
Total units
500
1,500
2,000
Units accounted for

Transferred out
Total units
1,200
800
2.000
Conversion
Costs
(Step 2)
1,200
800
2,000
1,200
200
1,400
10,000
$70,000
Costs
Unit costs (Step 3)
Costs in May
Equivalent units
Unit costs (a) (b)
(a)
(b)
Materials
Conversion
Costs
$65,000
2,000
$32.50
$70,000
1,400
$50.00

Total costs
Total
$135,000
$82.50
$
33,000
102,000
$135,000

Costs accounted for
Conversion costs (200 $50)
Total costs
$99,000
$26,000
10,000
36,000
$135,000
PROBLEM 4-58B
(a)
Quantities
Started this period
Total units
Units accounted for
Materials (2/3)
Conversion (1/3)
Physical
Units
Equivalent Units
Conversion
Materials
Costs
10,000
100,000
110,000
95,000
15,000
95,000
95,000
10,000
110,000
105,000
5,000
100,000
$156,000
$98,000
Cost per equivalent unit
$2.4657
$1.4857
$0.9800
(b) Costs
Total costs
$254,000
$156,000
$98,000
$234,242
19,757
$141,142
$93,100

Transferred out
(95,000 $2.4657)
Material (10,000 $1.4857)
Total costs
14,857
$253,999
$155,999
4,900
$98,000
*PROBLEM 4-59B
(a)
A. HOCKEY PUCKS
Physical
Units
Quantities
Total units
Units accounted for
Work in process,
beginning
Total units
500
1,600
2,100
500
1,000
600
2,100

Physical
Units
Total
500
1,000
600
2,100
Materials
Added
This Period
0%
100%
100%
Equivalent
Units
0
1,000
600
1,600
Physical
Units
Total
500
1,000
600
2,100
Conversion
Added
This Period
40%
100%
50%
Equivalent
Units
200
1,000
300
1,500

(2) Unit costs
Costs in August (a)

(3) Costs
Added this period
Total costs
Material (0 $1.00)
(1,000 $2.45)
Material (600 $1.00)
Total costs
Materials
Conversion
$1,600
1,600
$1.00
$2,175
1,500
$1.45
TOTAL
Materials
Conversion
Costs
$1,125
3,775
$4,900
$1,600
$2,175
$1,125
290
--290
2,450
3,865
1,000
1,450
1,035
600
435
$4,900

B. SOCCER BALLS
Physical
Units
Quantities
Total units
Units accounted for
Work in process,
beginning
Total units
200
2,000
2,200
200
1,850
150
2,200

Physical
Units
Total
200
1,850
150
2,200
Materials
Added
This Period
0%
100%
100%
Equivalent
Units
0
1,850
150
2,000
Physical
Units
Total
200
1,850
150
2,200
Conversion
Added
This Period
20%
100%
70%
Equivalent
Units
40
1,850
105
1,995

(2) Unit costs
Costs in August (a)

(3) Costs
Added this period
Total costs
Material (0 $1.30)
(1,850 $2.30)
Material (150 $1.30)
Total costs
Materials
Conversion
$2,600
2,000
$1.30
$1,995
1,995
$1.00
TOTAL
Materials
Conversion
Costs
$450
4,595
$5,045
$2,600
$1,995
$450
40
0
40
4,255
4,745
2,405
1,850
300
195
105
$5,045

(b)
MALONEY COMPANY
Production Cost ReportHockey pucks
For the Month Ended August 31
Quantities
Total units
Units accounted for
Total units
Costs
Unit costs (Step 3)
Costs in August (a)
Total costs
Costs accounted for
Transferred out
(1,000 $2.45)
Materials (600 $1)
*($1,600 + $1,175 + $1,000)
Physical
Units
Equivalent Units
Conversion
Materials
Costs
(Step 1)
(Step 2)
500
1,600
2,100
500
1,000
600
2,100
0
1,000
600
1,600
200
1,000
300
1,500
Materials
Conversion
Costs
$1,600
1,600
$1.00
$2,175
1,500
$1.45
$1,125
3,775*
$4,900
$1,125
290
2,450
$ 600
435
$3,865
1,035
$4,900

Chapter 4 Solutions Comm 305

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chapter 4 Solutions Comm 305

Uploaded by

Copyright:

Available Formats

COMM 305 CHAPTER 4 REVIEW

The entry to assign overhead to production is:

Units transferred out

SOLUTIONS TO BRIEF EXERCISES

Raw Materials Inventory...................................

BRIEF EXERCISE 4-2

b) Mar. 31Work in ProcessAssembly Department.......

BRIEF EXERCISE 4-3

Work in ProcessAssembly Department......

BRIEF EXERCISE 4-4

BRIEF EXERCISE 4-5

40% 10,000 units, 2 75% 8,000 units, 3 25% 16,000 units

BRIEF EXERCISE 4-6

40% 5,000 units

*BRIEF EXERCISE 4-8

*Direct materials are added at the beginning of the process

BRIEF EXERCISE 4-9

2,000 60% = Equivalent units for conversion costs

BRIEF EXERCISE 4-10

Units transferred out

*BRIEF EXERCISE 4-11

Work in process, 3/31

40% 5,000 units

*BRIEF EXERCISE 4-12

Units accounted for

35,000 equivalent units $8.00 per unit

SOLUTIONS TO DO IT! REVIEW

Work in ProcessMixing Department.............................

Work in ProcessMixing Department.............................

Work in ProcessPackaging Department.......................

Finished Goods Inventory.................................................

DO IT! REVIEW 4-15

Completed and transferred out

DO IT! REVIEW 4-16

(a) Units to be accounted for:

(b) Units completed & transferred

40% 2,000 unitsDO IT! REVIEW 4-16 (Continued)

4. False. In a job-order cost system, costs are tracked by individual

Work in process, May 1

$8,480 1,600 = $5.30

Raw Materials Inventory...........................................

Work in ProcessCutting........................................ 14,700

Work in ProcessCutting (1,700 $22).................

Finished Goods Inventory........................................

Cost of Goods Sold..................................................

Finished Goods Inventory................................

Units to be accounted for

11,000 (9,000 + 2,000)

Units transferred out

(b) Materials:$45,000 10,000 = $4.50

Conversion costs:($16,200 + $17,280) 9,300 = $3.60

Costs accounted for

(Total costs: $45,000 + $16,200 + $17,280 = $78,480)

HANNINEN FURNITURE COMPANY

Units to be accounted for

Units accounted for

Cost Reconciliation Schedule

Units to be accounted for

Units accounted for

(b) Per equivalent unit cost

$1,125,000 $550,000 $575,000

*EXERCISE 4-24 (Continued)

Complete beginning WIP

Started and completed