Week 4

Chapter 8 Solutions (Week Four Lesson One) – Assignment 4.1.2

8-17. Compute Equivalent Units—Weighted Average Method: Missouri

Corporation
b.
a. Conversion
Materials Costs
Units transferred out................................................ 150,000 150,000
Equivalent units in ending inventory:
 Materials: 100% x 100,000 units.......................... 100,000
 Conversion costs: 15% x 100,000 units............... 15,000
Total equivalent units for all work done to date....... 250,000 165,000

8-25. Compute Costs per Equivalent Unit—Weighted-Average Method: Matsui

Lubricants

Physical
Units Equivalent Units
Materials Conversion
Eq. units Costs Eq. units
Flow of units:
 Units to be accounted for:
 Beginning WIP inventory.................................
600
 Units started this period...................................
4,000
  Total units to account for..............................
4,600
 Units accounted for:
 Completed and transferred outa......................
3,400 3,400 3,400
 Units in ending inventory.................................
1,200
  Materials (1,200 x 40%)............................... 480
  Conversion costs (1,200 x 20%).................. 240
  Total units accounted for..............................
4,600 3,880 3,640

a 3,400 units transferred out = 4,600 units to account for – 1,200 units in ending WIP
inventory.
Direct Conversion
Total Materials Costs
Flow of costs:
Costs to be accounted for:
 Costs in beginning WIP inventory.......... $ 1,248 $  976 $  272
 Current period costs............................... 18,084 11,440 6,644
  Total costs to be accounted for........... $19,332 $12,416 $6,916
Cost per equivalent unit
 Materials ($12,416 ÷ 3,880 units)........... $ 3.20
 Conversion costs ($6,916 ÷ 3,640 units) $ 1.90

8.26 Assign Costs to Goods Transferred Out and Ending Inventory—Weighted-

Average Method: Matsui Lubricants

Direct Conversion
Total Materials Costs
Flow of costs:
Costs to be accounted for:
 Costs in beginning WIP inventory...................$ 1,248 $  976 $  272
 Current period costs........................................ 18,084 11,440 6,644
  Total costs to be accounted for....................$19,332 $12,416 $6,916
Cost per equivalent unit
 Materials ($12,416 ÷ 3,880 units).................... $ 3.20
 Conversion costs ($6,916 ÷ 3,640)................. $ 1.90
Costs accounted for:
 Costs assigned to units transferred out $17,340 $10,880 a $6,460 b
 Cost of ending WIP inventory.......................... 1,992 1,536 c 456 d
  Total costs accounted for.............................$19,332 $12,416 $6,916

Costs transferred out total $17,340, and costs in ending inventory total $1,992.

a $10,880 = 3,400 EU x $3.20 per EU.

b $6,460 = 3,400 EU x $1.90 per EU.

c $1,536 = 480 EU x $3.20 per EU.

d $456 = 240 EU x $1.90 per EU.

8-33. Production Cost Report—FIFO method: El Paso Corporation

Physical Units Equivalent Units

Prior Department
Department No. B
Flow of units:
 Units to be accounted for:
 Beginning WIP inventory................................. 7,500
 Units started this period................................... 17,500
  Total units to account for.............................. 25,000
 Units accounted for:
 Completed and transferred out
  From beginning WIP inventory.................... 7,500
   Prior department....................................... 0
   Dept. B [7,500 units x (1–20%)]............... 6,000
  Started and completed currently.................. 15,000 a 15,000 15,000
Units in ending WIP inventory............................. 2,500
  Prior department.......................................... 2,500
  Department B (2,500 units x 50%)............... 1,250
   Total units accounted for.......................... 25,000 17,500 22,250
a. 15,000 = 17,500 units started – 2,500 units in ending WIP inventory.
 Prior Department
Total Department No. B
Flow of costs:
Costs to be accounted for:
 Costs in beginning WIP inventory................... $ 36,675 $29,000 $ 7,675
 Current period costs........................................ 219,075 70,000 149,075
  Total costs to be accounted for.................... $255,750 $99,000 $156,750
Cost per equivalent unit
 Prior department ($70,000 ÷ 17,500 units) ..... $  4.00
 Department. B ($149,075 ÷ 22,250 units) ...... $  6.70

Costs accounted for:

 Costs assigned to units transferred out:
  Costs from beginning WIP inventory........... $ 36,675 $29,000 $ 7,675
  Current costs added to complete beginning
WIP inventory...................................................... 40,200
   Prior department....................................... 0
   Department B ($6.70 x 6,000 units) ........ 40,200
 Current costs of units started and completed: 160,500
   Prior department ($4.00 x 15,000)........... 60,000
   Department B ($6.70 x 15,000) .............. 100,500
Total costs transferred out.................................. $237,375 $89,000 $148,375
Cost of ending WIP inventory.............................. 18,375
   Prior department ($4.00 x 2,500) ............ 10,000
   Department B ($6.70 x 1,250) ................. 8,375
  Total costs accounted for............................. $255,750 $99,000 $156,750