1

CHAPTER 10
Answers to Multiple Choice Theoretical
1. 2. 3. 4. 5. b c b b b 6. 7. 8. 9. 10. c c c c a 11. d

Solutions to Multiple Choice Computational

1. (d) Units started in process Units in process, end - Dept. 1 Units in process, end - Dept. 2 Units transferred out to finished goods 2. (a) Units in process, beginning Units placed in process Units in process, end Units transferred out to Dept. 2 3. (a) Units completed and transferred out (100%) Units in process, end (3,000 x 80%) Equivalent units of production Materials 4. (a) P188,400 / 31,400 = 5. (a) Units transferred to finished goods (100%) Ending work in process (400 x 25%) Equivalent units of production 6. (a) P14,080 / 4,400 = 7. (a) 100 x P3.20 = P320 P3.20 4,300 100 4,400 P6.00 29,000 2,400 31,400 6,000 14,000 (4,200) 15,800 95,000 ( 21,000) ( 12,000) 62,000

2
8. (a) Units placed in production Units transferred out to next department Units in ending work in process 9. (a) Units transferred out to next department (100%) Units in ending work in process (6,000 x 1/3) Equivalent units of production overhead 10. (b) P282,900 / 69,000 = P4.10 x 67,000 = P274,700. 11. (a) 2,000 EUP x P4.10 12. (a) Units completed and transferred out (100%) Units completed and on hand (100%) Units in ending work in process (200 x 65%) Equivalent units of production Unit cost = (P27,193 / 3,830) Labor ost of units transferred out: (3,620 x P7.10) 13. (a) 80 x P7.10 14. (a) Units started into production Units completed Units in process, end 15. (a) 130 x P7.10 16. (a) Materials are added in Department 1. 17. (c) Units transferred out to finished goods (100%) Units in process, end (18,600 x 72%) Equivalent units of production conversion cost 61,400 13,392 74,792 3,900 3,700 200 = P568 3,620 80 130 3,830 P7.10 P25,702 = P8,200 67,000 2,000 69,000 73,000 (67,000) 6,000

3
18. (b) Equivalent units of production: Units finished and transferred to finished goods Units in process, end (9,000 x 35%) EUP Unit cost: Transferred in cost: (P24,050 / 37,000) This department: (P18,690 / 31,150) Units in process, end: Transferred in cost: (9,000 x P0.65) Cost this department: (3,150 x P0.60) Cost of units in process, end 19. (b) Equivalent units of production: Materials: Units finished and transferred out Ending work in process EUP Conversion cost: Units finished and transferred out Ending work in process (12,000 x 70%) EUP Unit costs: Transferred in cost: (P24,750 / 55,000) This department: Materials; (P7,200 / 60,000) CC: (P53,580 / 56,400) Total unit cost 20. (b) Equivalent units of production: Materials: Units transferred out (15,000 3,000) Units in process, end EUP Conversion cost: Units transferred out Units in process, end (3,000 x 2/3) EUP Cost of units transferred out: Transferred in; (P13,500 / 15,000) Materials: (12,000 x 4 x P.02) = P960 / 12,000 Conversion cost: (P14,210 / 14,000) Total unit cost Cost of units transferred out: (12,000 x P1.995) 21. (d) 28,000 3,150 31,250 P0.65 0.60 P5,850 1,890 P7,740

48,000 12,000 60,000 48,000 8,400 56,400 P0.45 P0.12 0.95 0.95 P1,52

12,000 -012,000 12,000 2,000 14,000 P0.90 0.08 1.015 P1,995 P23,940

Equivalent units of production: Materials: Units transferred out to finished goods Ending units in process: 10% x 70,000 = 7,000 40% x 70,000 = 28,000 15% x 70,000 = 10,500 35% x 70,000 = 24,500 EUP Conversion cost: Units transferred out to finished goods Ending units process: 7,000 x 30% 28,000 x 60% 10,500 x 75% 24,500 x 85% EUP Unit cost: Transferred in: (P300,000 / 500,000) Materials: (P559,350 / 565,000) Conversion cost: (P606,480 / 577,600) Total unit cost Cost of ending work in process: Transferred in: (70,000 x P0.60) Materials: (35,000 x P0.99) Conversion cost: (47,600 x P1.05) Total

530,000 -0 -0 10,500 24,500

35,000 565,000 530,000

2,100 16,800 7,875 20,825

47,600 577,600 P . 60 .99 1.05 P2.64 P 42,000 34,650 49,980 P126,630

22.

(a) Transferred in cost: (32,000 x P8.39( Cost added: Direct labor: (20,000 x P3.19) Overhead: (20,000 x P1.20) Cost to account for P268,480 P63,800 24,000 87,800 P356,280

5
23. (b) Unit cost from preceding department: (P391,500 / 78,300) Unit cost this department: Direct materials P 1.23 Conversion costs 2.50 Total unit costs Total units to account for Units transferred in: (P508,959 / P8.73) Units in process, end Total cost to account for: Units transferred to finished goods Units in process, end: Transferred in cost (20,000 x P5.00) Cost added this department: DM: (20,000 x P1.23) CC: (20,000 x 45%) x P2.50 Total cost to account for 24. (a) P1,480,000 / 10,000 units = 25. (a) Equivalent units of production: Materials: Units completed Units in process, end EUP Conversion cost: Units completed Units in process, end (1,000 x50%) EUP Unit costs: Materials: (P720,000 / 10,000) Conversion cost: (760,000 / 9,500) P148 P 5.00 3.73 8.73 78,300 58,300 20,000 P508,959 P100,000 24,600 22,500 147,100 P656,059

9,000 1,000 10,000 9,000 500 9,500 P72 80

26.

(a) Equivalent units of production: Materials: Completed and transferred out Ending work in process: Chemical P: (15,000 x 100%) Chemical Q: EUP Conversion cost: Completed and transferred out Ending work and process; (15,000 x 2/3) EUP Unit costs: Materials: Chemical P: (P250,000 / 50,000) Chemical Q: (P70,000 / 35,000) Conversion cost: (P135,000 / 45,000) Total unit cost Completed and transferred out: (35,000 x P10) Chemical P 35,000 15,000 50,000 - 0 35,000 35,000 10,000 45,000 Chemical Q 35,000

P 5.00 2.00 3.00 P10,00 P350,000

27.

(a) Ending work in process:: Materials: Chemical P (15,000 x P5) Conversion cost: (10,000 x P3) Cost of ending work in process P 75,000 30,000 P105,000

7 Solutions to Problems Problem 10-1

D
Units started in process Units transferred in Units to account for Transferred to next department Transferred to finished goods Ending work in process Units accounted for

A
2

T M
3 3,000 3,000 (d) 2,400 600 3,000

N
4

S
5 (g) 2,100 2,100 (h) 1,600 500 2,100

1 10,000 10,000 (a) 4,000 6,000 10,000

(b) 4,000 4,000 3,000 (c) 1,000 4,000

(c) 2,400 2,400 (f) 2,100 300 2,400

PROBLEM 10-2 Dept. A Materials: Transferred out (100%) Ending work in process EUP Conversion cost: Transferred out Ending work in process EUP 15,000 10,000 25,000 15,000 7,500 22,500 Dept. B 12,000 12,000 12,000 1,500 13,500 Dept. C 9,000 9,000 9,000 900 9,900

Problem 10-3
Materials: Units transferred out: (50,000 10,000) Units in process, end: 10,000 x 25% = 2,500 x 20% 10,000 x 30% = 3,000 x 50% 10,000 x 25% = 2,500 x 80% 10,000 x 20% = 2,000 x 100% EUP Conversion cost: Units transferred out Units in process, end: 2,500 x 35% 3,000 x 55% 2,500 x 80% 2,000 x 95% EUP 40,000 500 1,500 2,000 2,000

6,000 46,000 40,000

875 1,650 2,000 1,900

6,425 46,425

8 Problem 10-4
1. Equivalent units of production Materials: Units transferred out: (13,000 2,000) Units in process, end EUP Conversion cost: Units transferred out Units in process, end (2,000 x 45%) EUP

11,000 -0 11,000 11,000 900 11,900

2.

Department 2 Cost of Production Report Month of July 31, 2010 Quantity Schedule: Transferred in Transferred out Work in process, end Total accounted for Cost Schedule Cost transferred in Cost added in this dept. Materials CC Total cost to account for Cost accounted for: Transferred out Work in process, end: Cost transferred in Cost added: CC Total cost accounted for Units 13,000 11,000 2,000 13,000 Total Cost EUP P16,120 13,000 2,860 9,996 P28,976 P25,740 2,480 756 P28,976 = Unit Cost P1.24 0.26 0.84 P2.34 P2.34 1.24 0.84

11,000 = 11,900 =

= = =

11,000 2,000 900

x x x

9 Problem 10-5
1. Equivalent Units of Production Materials: Units transferred out (100 %) Ending units in process EUP Conversion cost: Units transferred out Ending units in process EUP 2. Department 1 Cost of Production Report Month of January, 2010 Quantity Schedule Units started in process Units transferred out Units in process, end Total accounted for Cost Schedule Direct materials Conversion costs Total cost to account for Transferred out Units in process, end: Materials CC Total accounted for Department 2 Cost of Production Report Month of January, 2010 Quantity Schedule Units transferred in Units transferred out Units in process, end Total accounted for Cost Schedule Transferred in cost Cost added this department: CC Total cost to account for Transferred out Units in process, end: Transferred in Cost added: CC Total accounted for Units 60,000 55,000 5,000 60,000 Total Cost P465,000 243,375 P708,375 P653,125 38,750 16,500 P708,375 = = = EUP Unit Cost 60,000 = P 7.75 59,000 = 4.125 P11.875 55,000 x 5,000 x 4,000 x P11.875 7.75 4.125 Units 75,000 60,000 15,000 75,000 Total Cost P300,000 258,750 P558,750 P465,000 60,000 33,750 P558,750 EUP 75,000 69,000 = 60,000 = = x Unit Cost P4.00 3.75 P7.75 P7.75 4.00 3.75 Dept. 1 60,000 15,000 75,000 60,000 9,000 69,000 Dept. 2 55,000 -055,000 55,000 4,000 59,000

= 15,000 x = 9,000 x

10 Problem 10-6
(1) Equivalent Units of Production Materials: Units transferred out Units in process, end EUP Conversion Costs Units transferred out Units in process, end EUP (2) Cost of Production Reports: Department 1: Quantity Schedule Started in process Transferred out Ending work in process Total accounted for Cost Schedule Materials Conversion costs Total cost to account for Transferred out Ending work in process: Materials Conversion cost Total accounted for Department 2 Quantity Schedule Transferred in Transferred out Ending work in process Total accounted for Cost Schedule Transferred in cost Cost added this department: Conversion cost Total cost to account for Transferred out Ending work in process: Transferred in cost Cost added this dept. CC Total accounted for Units 150,000 125,000 25,000 150,000 Total Cost P21,000 24,300 P45,300 P40,000 3,500 1,800 P45,300 Units 125,000 115,000 10,000 125,000 Total Cost P40,000 34,800 P74,800 P71,300 3,200 300 P74,800 = = = EUP Unit Cost 125,000 = P0.32 116,000 = 115,000 = 10,000 = 1,000 = 0.30 P0.62 P0.62 0.32 0.30 EUP 150,000 = 135,000 = = = = 125,000 x Unit Cost P0.14 0.18 P0.32 P0.32 0.14 0.18 Dept. 1 125,000 25,000 150,000 125,000 10,000 135,000 Dept. 2 115,000 - 0 115,000 115,000 1,000 116,000 Dept. 3 112,000 - 0 112,000 112,000 2,700 114,700

25,000 x 10,000 x

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Problem 10-6 (continued): Department 3 Quantity Schedule Transferred in Transferred out Ending work in process Total accounted for Cost Schedule Transferred in cost Cost added this department: CC Total cost to account for Transferred out to finished goods Ending work in process: Transferred in cost Cost added this dept.: CC Total accounted for Units 115,000 112,000 3,000 115,000 Total cost P71,300 24,087 P95,387 P92,960 1,860 567 P95,387 = = = EUP 115,000 = 114,700 = 112,000 x 3,000 x 2,700 x Unit Cost P0.62 0.21 P0.83 P0.83 0.62 0.21

Problem 10-7
1. Equivalent Units of Production Materials: Transferred out Completed and on hand Ending work in process EUP Conversion cost: Transferred out Completed and on hand Ending work in process EUP 2. Cost of Production Report Department 1 Quantity Schedule Started in process Transferred out Ending work in process Total accounted for Cost Schedule Direct materials Conversion cost Total cost to account for Transferred out Ending work in process: DM CC Units 25,000 15,000 10,000 25,000 Total Cost EUP P12,650 23,000 18,705 21,500 P31,355 P21,300 4,400 5,655 = = = 15,000 8,000 6,500 = = x x x Unit Cost P0.55 0.87 P1.42 P1.42 0.55 0.87 Dept. 1 15,000 8,000 23,000 15,000 6,500 21,500 Dept. 2 7,000 1,000 - 08,000 7,000 1,000 5,250 13,250

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Total accounted for Problem 10-7 (Continued) Department 2 Quantity Schedule Transferred in Transferred out to finished goods Completed and on hand Ending work in process Total accounted for Cost Schedule Transferred in cost Cost added this department: CC Total cost to account for Transferred out to finished goods Completed and on hand Ending work in process: Transferred in cost Cost added this dept.: CC Total accounted for Units 15,000 7,000 1,000 7,000 15,000 Total Cost P21,300 16,430 P37,730 P18,620 2,660 9,940 6,510 P37,730 = = = = EUP 15,000 13,250 7,000 1,000 7,000 5,250 = = x x x x Unit Cost P 1.42 1.24 P 2.66 P 2.66 2.66 1.42 1.24 P31,355

Problem 10-8
1. Equivalent Units of Production: Materials: Transferred out Ending units in process: 50,000 x 30% = 15,000 50,000 x 35% = 17,500 50,000 x 15% = 7,500 50,000 x 20% = 10,000 EUP Conversion Cost: Transferred out Ending units in process: 15,000 x 45% 17,500 x 50% 7,500 x 65% 10,000 x 98% EUP 2. 101 250,000 15,000 17,500 7,500 10,000 300,000 250,000 6,750 8,750 4,875 9,800 280,175 102 250,000 15,000 17,500 7,500 10,000 300,000 103 250,000 7,500 10,000 17,500 104 250,000 10,000 10,000

Unit costs: Materials: 101: (P6,000 / 300,000) P0.02 102: (P3,000 / 300,000) 0.01 103: (P9,362.50 / 267,500) 0.035 104: (P13,000 / 260,000) 0.05 Conversion cost: (P117,763.50 / 280,175) Total unit costs

P0.115 0.42 P0.535

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Problem 10-8 (Continued): Cost of ending work in process inventory: Materials: 101: (50,000 x P0.02) 102: (50,000 x P0.01) 103: (17,500 x P0.035) 104: (10,000 x P0.05) Total Conversion cost: (30,175 x P0.42) Total cost

P 1,000.00 500.00 612.50 500.00 P 2,612.50 12,673.50 P15,286.00

Problem 10-9
1. Equivalent Units of Production: Assembly Department: Materials: Transferred out to next department Ending work in process (100%) EUP Conversion cost: Transferred out Ending work in process: (140 x 75%) EUP Finishing Department: Materials and overhead: Transferred out to finished goods Ending work in process (60 x 40%) EUP Labor: Transferred out to finished goods Ending work in process (60 x 10%) EUP

1,860 140 2,000 1,860 105 1,965

1,800 24 1,824 1,800 6 1,806

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2.

Peninsula Company Assembly Department Cost of Production Report Month of August Quantity Schedule Started in process Transferred out to next department Work in process, end Total accounted for Cost Schedule Materials Labor Overhead Total cost to account for Transferred out to next department Work in process, end: Materials Labor Overhead Total work in process Total cost accounted for *P3 adjustment for rounding. Units 2,000 1,860 140 2,000 Total Cost P30,000.00 29,670.00 18,830.00 P78,500.00 P73,808.00* = 2,100.00 = 1,586.00 = 1,006.00 = 4,692.00 P78,500.00 EUP 2,000 1,965 1,965 1.860 140 105 105 = = = x x x x Unit Cost P15.00 15.10 9.58 P39.68 P39.68 15.00 15.10 9.58

Peninsula Company Finishing Department Cost of Production Report Month of August Quantity Schedule Transferred in from prior department Transferred out to finished goods Work in process, end Total accounted for Cost Schedule Transferred in cost from prior dept. Cost added this department: Materials Labor Overhead Total cost to account for Transferred out to finished goods Work in process, end: Transferred in cost Cost added this dept.: Materials Labor Overhead Total cost of work in process Total costs accounted for Units 1,860 1,800 60 1,860 Total Cost P 73,808.00 EUP 1,860 824 1,806 1,824 1,800 60 24 6 24 = = = = x x x x x Unit Cost P39.68 37.28 7.57 4.29 P88.82 P88.82 39.68 37.28 7.57 4.29

68,000.00 13,660.00 7,825.00 P163,298.00 P159,874.00* = 2,381.00 =

895.00 = 45.00 = 103.00 = 3,424.00 P163,298.00

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*P2 Rounding adjustment Work in process Assembly Department Work in process Finishing Department Materials Factory payroll Factory overhead control To record allocation of production cost. Work in process Finishing Department Work in process Assembly Department To record transfer of goods from Assembly to Finishing Department. Finished goods Work in process Finishing Department To record completion of goods transferred to finished Goods inventory.

3.

78,500 89,490 98,000 43,330 26,660 73,808 73,808

4.

5.

159,874 159,874

Problem 10-10
1. Equivalent Units of Production Trimming Department Materials: Transferred out Work in process, end EUP Labor: Transferred out Work in process, end EUP Overhead: Transferred out Work in process, end EUP 5,400 600 6,000 5,400 360 5,760 5,400 360 5,760 Assembly Department 5,000 380 5,380 5,000 300 5,300 5,000 340 5,340 Finishing Department 4,800 160 4,960 4,800 180 4,980 4,800 160 4,960

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2.

Trimming Department Cost of Production Report Month of June, 2010 Quantity Schedule Started in process Transferred out to next department Work in process, end Total accounted for Cost Schedule Materials Labor Overhead Total costs to account for Transferred out to next department Work in process, end: Materials Labor Overhead Total work in process Total costs accounted for Assembly Department Cost of Production Report Month of June, 2010 Quantity Schedule Transferred in from prior department Transferred out to next department Work in process, end Total accounted for Cost Schedule Transferred in cost Cost added this department: Materials Labor Overhead Total costs to account for Transferred out to next department Work in process, end: Transferred in cost Cost added this department: Materials Labor Overhead Total work in process Total costs accounted for Units 5,400 5,000 400 5,400 Total Cost P56,225 16,786 14,840 7,120 P94,971 P88,328* 4,164 1,186 840 453 6,643 P94,971 = = = = = EUP 5,400 5,380 5,300 5,340 5,000 400 380 350 340 = = = = Unit Cost P10.41203 3.12007 2.80 1.33333 P17.66543 Units 6,000 5,400 600 6,000 Total Cost P33,600 18,500 9,217 P61,317 P56,225 3,360 1,156 576 5,092 P61,317 = = = = EUP 6,000 5,760 5,760 5,400 600 360 360 Unit Cost = P 5.60 = 3.21180 = 1.60017 P10.41197 x x x x P10.41197 5.60 3.21180 1.60017

x P17.66543 x x x x 10.41203 3.12007 2.80 1.33333

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P1 difference due to rounding

Finishing Department Cost of Production Report Month of June, 2010 Quantity Schedule Transferred in from prior department Transferred out to finished goods Work in process, end Total accounted for Cost Schedule Transferred in cost from prior dept. Cost added this department: Materials Labor Overhead Total costs to be accounted for Transferred out to finished goods Work in process, end: Transferred in cost Cost added this department: Materials Labor Overhead Total work in process Total costs accounted for 3a. Units 5,000 4,800 200 5,000 Total Cost P 88,328 6,400 10,320 4,960 P110,008 P105,735 3,533 207 373 160 4,273 P110,008 = = = = = EUP 5,000 4,960 4,980 4,960 4,800 200 160 180 160 = = = = x x x x z Unit Cost P17.66560 1.29032 2.07228 1.00 P22.02820 P22.02920 17.66560 1.29032 2.07228 1.00

Work in process Trimming Department Work in process Assembly Department Work in process Finishing Department Materials Factory payroll Factory overhead control To record manufacturing costs.

61,317 38,746 21,680 56,786 43,660 21,297

3b.

Work in process Assembly Department 56,225 Work in process Trimming Department To record transfer of goods from Trimming to Assembly Department. Work in process Finishing Department 88,328 Work in process Assembly Department To record transfer of goods from Assembly To Finishing Department. Finished goods I 105,735 Work in process Finishing Department To record completion of finished goods.

56,225

3c.

88,328

3c.

105,735