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CHAPTER 6

PROCESS COSTING

EXERCISES

14. Each student will have a different answer. No solution provided.

15. a.

24,000 + 600,000 = 624,000 pounds

b. & c. Beginning WIP In-

24,000

ventory Started

600,000

To account for

624,000

Completed (608,000)

Ending WIP Invento- ry

16,000

Units started and completed = 608,000 24,000 = 584,000

 

Units

DM

CC

Beginning WIP Invento- ry Started & completed Ending WIP Inventory

(65%)

24,000

24,000

24,000

584,000

584,000

584,000

16,000

16,000

10,400

 

EUP

624,000

624,000

618,400

16. a. & b. Begin-

Beginning

ning WIP

WIP

70,000

Invento- 70,000

ry (30%)

Inventory

136

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Chapter 6

137

 

Started

Started and completed Ending WIP Inventory Accounted for

357,500

 

445,300

 

To account for

515,300

 

87,800

 

515,300

 

Units

DM

CC

 

Beginning WIP Invento- ry Started & completed Ending WIP Inventory

(35%)

70,000

70,000

70,000

 

357,500

357,500

357,500

87,800

87,800

30,730

 

EUP

515,300

515,300

458,230

 

17.

Units

CC

a.

Beginning WIP Inventory

10,000

(40%)

Started

350,000

Units to account for

360,000

Beginning WIP Invento-

10,00

ry

10,000

0

Started and completed

334,00

334,0

0

00

Transferred out

344,00

0

Ending WIP Inventory

(70%)

16,000

11,20

 

0

Units accounted for

360,00

355,2

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138

Chapter 6

 

0

00

b.

CC

 

Units

 

Beginning WIP Invento- ry (30%) Started

40,000

480,00

 

0

 

Units to account for

520,00

 

0

 

Beginning WIP Invento- ry Started and completed

40,000

40,00

0

454,00

454,0

 

0

00

 

Transferred out

494,00

 

0

 

Ending WIP Inventory

(80%)

26,000

20,80

 

0

 

Units accounted for

520,00

514,8

 

0

00

c.

CC

 

Units

 

Beginning WIP Inventory

15,00

(55%)

0

Started

405,0

 

00

 

Units to account for

420,0

 

00

Beginning WIP Invento- ry Started and completed Transferred out

15,000

15,000

400,800 400,800

415,800

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Chapter 6

139

Ending WIP Inventory

(90%)

Units accounted for

4,200

3,780

420,000 419,580

d.

Units

CC

Beginning WIP Invento- ry (35%) Started Units to account for

10,800

359,100

369,900

Beginning WIP Invento- ry Started and completed Transferred out Ending WIP Inventory

10,800

10,800

340,800 340,800

351,600

18,300

8,235

(45%)

Units accounted for

369,900 359,835

18. a.

ly

Work to be performed = 100% 45% = 55% for conversion costs on-

b. & c. Beginning WIP Inventory Started

Accountable for

Completed Ending WIP Inven- tory

24,000

600,000

624,000

(608,000)

16,000

Units started and completed = 608,000 24,000 = 584,000

DM

CC

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140

Chapter 6

Units

Beginning WIP In- ventory (55%) Started & completed

24,00

0

13,2

 

0

00

584,0

584,0

584,00

 

00

00

0

Ending WIP Invento- ry (65%)

16,00

16,00

10,400

 

0

0

EUP

624,0

600,0

607,6

 

00

00

00

19. a. & b. Begin- ning WIP

Beginning WIP Inventory

70,00

70,000

Invento-

0

ry

Started

445,3

00

515,3

Started and completed Ending WIP In-

357,50

0

To account for

00

ventory Accounted for

87,800

 

515,30

 

0

 

DM

CC

 

Units

Beginning WIP In- ventory (70%) Started & completed

70,000

0

49,0

 

00

357,500

 

357,50

 

357,50

0

0

Ending WIP Invento- ry (35%)

 

87,800

87,8

30,730

 

00

EUP

515,300

 

437,23

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Chapter 6

141

445,30

0

0

20.

Units

CC

 

a

.

Beginning WIP Inventory

10,00

(40%)

0

Started

350,0

 

00

 

Units to account for

360,0

 

00

 

Beginning WIP Inventory

10,00

6,000

(60%)

0

Started and completed

334,0

334,0

 

00

00

 

Transferred out

344,0

 

00

 

Ending WIP Inventory (70%)

 

16,00

11,20

0

0

 

Units accounted for

360,0

351,2

 

00

00

Units

CC

b.

Beginning WIP Inventory

(30%)

Started Units to account for

40,000

480,000

520,000

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142

Chapter 6

Beginning WIP Inventory

40,000

28,000

(70%)

Started and completed Transferred out Ending WIP Inventory

454,000 454,000

494,000

26,000

20,800

(80%)

Units accounted for

520,000 502,800

c.

Units

CC

Beginning WIP Inventory

15,000

(55%)

Started Units to account for

405,000

 

420,000

Beginning WIP Inventory

15,000

6,750

(45%)

Started and completed Transferred out Ending WIP Inventory

400,800 400,800

415,800

4,200

3,780

(90%)

Units accounted for

420,000 411,330

d.

Units

CC

Beginning WIP Inventory

10,800

(35%)

Started Units to account for

359,100

 

369,900

Beginning WIP Inventory

10,800

7,020

(65%)

Started and completed Transferred out Ending WIP Inventory

340,800 340,800

351,600

18,300

8,235

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Chapter 6

143

(45%)

Units accounted for

369,900 356,055

21. a. Beginning WIP Inventory (100%; 60%;

15,000

Beginning WIP Inventory

15,000

 

75%)

Started

620,000 Started and completed

 

594,600

 

To account for

635,000

Ending WIP In-

 
 

ventory (100%; 35%;

25,400

 
 

60%)

 

Accounted for

635,000

 
 

Units

DM

DL

OH

Beginning WIP Inventory Started & com- pleted Ending WIP In-

 

15,000

15,000

15,000

15,000

594,600 594,600 594,600 594,600

25,400

25,400

8,890

15,240

ventory Equivalent units 635,000 635,000 618,490 624,840

 

Units

DM

DL

OH

b

.

Beginning WIP Inventory Started & com- pleted

 

0

6,000

15,000

3,750

 

594,600

594,600

594,600 594,600

 

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144

Chapter 6

Ending WIP In- ventory Equivalent units

 

8,890

15,240

25,400

25,400

609,490

613,590

 

635,000 620,000

 

c. Equivalent units (WA) EUP in beginning WIP Inventory Equivalent units (FIFO)

 

624,840

 

635,000 618,490

 

(15,000)

(9,000)

(11,250)

 

613,590

 

620,000 609,490

 

22. a. Beginning WIP Inventory

Tons started

180,000

 

3,400,000

Total tons to account for

 

3,580,000

b. Total tons to account for

 

3,580,000

Tons in ending WIP Invento- ry Tons transferred out

(165,000)

3,415,000

Tons in beginning WIP In- ventory

(180,000)

Tons started & completed (tons)

3,235,000

c.

Beginning WIP Inventory

Material

Conversion

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Chapter 6

145

 

180,000

180,000

 

Started & completed

 
 

3,235,000

3,235,000

 

Ending WIP Inventory (100%, 40%) WA EUP

 

165,000

66,000

 

3,481,000

 

3,580,000

 

Ma-

Con-

d.

terial

version

 

Beginning WIP Inventory (0%, 35%) Started & completed

 

0

63,000

 

3,235,0

3,235,00

00

0

 

Ending WIP Inventory (100%, 40%)

 

165,00

66,000

 

0

 

FIFO EUP

 

3,400,0

3,364,00

00

0

 

DM

CC

e.

 

WA EUP

3,580,000

Equivalent units in BI FIFO EUP

 

3,481,000

 

(180,000)

(117,000)

 

3,400,000

23. a. Beginning Inven- tory Units started

21,600

3,364,000

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146

Chapter 6

 

561,000

 

Units to account for

582,600

b. Units to account for Units in BI

582,600

(21,600)

 

Units in EI

 

(13,700)

 

Units started & completed

547,300

c.

DM

DL

OH

 

BI

21,600 21,600 21,600 547,300 547,300 547,300

Started &

completed

EI (75%,

3,425

1,370

25%,

10,275

10%)

EUP (WA)

579,175 572,325 570,270

d.

DM

DL

OH

 

BI (15%,

3,240

8,640

11,880

40%,

55%)

Started &

547,300 547,300 547,300

completed

EI (75%,

10,275

3,425

1,370

25%,

10%)

EUP

(FIFO)

560,815 559,365 560,550

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Chapter 6

147

e

DM

DL

OH

.

 

EUP (WA)

579,1

572,3

570,2

 

75

25

70

 

Equivalent units in BI

(18,36

(12,96

(9,720

 

0)

0)

)

 

EUP (FIFO)

559,3

560,5

 

560,8

65

50

15

24.

a. DL cost = Conversion cost OH cost = $189,648 $85,200 =

$104,448

b.

DM

DL

Overhead

25.

Beginning WIP Inventory Current period

$

$ 19,504 $ 20,640

26,232

 

104,448

85,200

 

158,688

Total costs Divided by EUP

Cost per EUP $3.45 $2.54 $2.52

$184,920 $123,952 $105,840

÷ 48,800 ÷ 42,000

÷ 53,600

DM

DL

Over-

head

WA EUP

48,800

42,000

Beginning WIP EUP FIFO EUP

53,600

(7,200)

(8,000)

(7,920)

40,800

34,080

 

46,400

Current period cost Divided by EUP

 

$104,448

$158,688

$85,200

÷

÷

÷

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148

Chapter 6

 

46,400

40,800

34,080

 

Cost per EUP

 

$3.42

$2.56

$2.50

 

DM

DL

OH

Total

26

. a.

Beginning

 

$

$ 6,320

$

$ 35,940

WIP

19,600

10,020

Current

 

34,720

173,200

period

 

54,000

84,480

Total

$

$41,040

$

$209,140

 

73,600

94,500

b. Total

 

$

$

$

$209,140

costs

73,600

 

41,040

94,500

WA

 

÷

÷

÷

EUP

160,000

152,000

150,000

Cost per

 

$0.46

$0.27

$0.63

$1.36

EUP

 

c.

Cur-

$

$

$

$173,200

rent

54,000

 

34,720

84,480

costs

 

FIFO

 

÷

÷

÷

 

EUP

120,000

124,000

132,000

Cost

 

$0.45

$0.28

$0.64

$1.37

 

per

EUP

d.

WA

160,000 152,000 150,000

 

EUP

FIFO

EUP

Beg. WIP

120,000 124,000 132,000

40,000

28,000

18,000

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Chapter 6

149

EUP

Percent

complete

2

100%

70%

45%

 

Unit

Unit

.

s

s

Beginning WIP Inventory

9,800

Beginning WIP Inventory

9,80

 

0

Units started

 

81,500 Started & com- pleted 91,300 Ending WIP In- ventory

76,9

 

00

Units

to

ac-

count for

4,60

 

0

 

Accounted for

91,3

 

00

 

Other

 

Can-

Mate-

OH

ister

rials

DL

s

Beginning WIP Inventory

9,8

9,800

9,800

9,800

00

Started & completed

76,90

76,90

76,90

76,90

0

0

0

0

EI

 

4,6

1,840

920

460

00

EUP

91,30

88,54

87,62

87,16

0

0

0

0

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150

Chapter 6

Costs:

Other

 
 

Can-

Mate-

 

DL

OH

Total

isters

rials

 

Beginning

$

$

$

$

$

WIP

6,535

6,174

 

5,59

1,070

19,37

 

4

3

Current pe- riod

61,94

86,79

 

82,0

160,1

390,9

0

3

26

76

35

Total cost

$68,4

$92,9

 

$87,

$161,

$410,

75

67

620

246

308

Divided by EUP

÷

÷

÷

÷

91,30

88,54

87,620

87,16

 

0

0

0

Cost per

$0.

$1.05

 

$1.0

$1.85

EUP

75

0

$4.65

28.

Uni

a

ts

.

Beginning WIP Inven- tory Units started

 

400

3,8

 

00

Units to account for

 

4,2

 

00

Beginning WIP Inven- tory Units started & com- pleted Total units completed

 

400

3,5

00

3,9

 

00

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Chapter 6

151

Ending WIP Inventory

 

300

Units accounted for

4,2

00

Mate- Conver-

rial

sion

Beginning WIP In- ventory Units started & completed Ending WIP Inven- tory EUP

400

400

3,5

3,500

00

 

180

120

4,0

4,080

 

20

b.

Material

Conver-

 

Total

 

sion

 

Beginning

$ 4,349

$ 4,658

$

9,007

WIP

Current

60,775

46,750

107,525

costs

Total cost

$65,124

$51,408

$116,532

Divided

÷ 4,020

÷ 4,080

by

EUP

(WA)

Cost per

$16.20

$12.60

$28.80

EUP

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152

Chapter 6

2

 

9

Uni

Unit

.

ts

s

Beginning WIP Inventory Units started

9,800

Beginning WIP Inventory

9,80

 

0

81,50

Started & com-

76,9

 

0

pleted Ending WIP In-

00

Units to ac- count for

91,30

0

ventory

 

4,60

 

0

 

Accounted for

 

91,3

 

00

 

Other

 
 

Canis-

Materi-

 

DL

OH

ters

als

Beginning

WIP

0

3,920

 

5,880

7,840

Invento-

ry

Started &

76,900

76,900

 

76,900

76,900

complet-

ed

EI

4,600

1,840

 

920

460

EUP

81,500

82,660

83,700

85,200

Costs:

Oth-

 

er

Can-

Mate-

DL

OH

Total

isters

rials

 

Current

$61,940

$86,79

 

$160,1

period

3

$82,02

76

$390,93

 
 

6

5

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Chapter 6

153

Divided by

÷

÷

÷

÷

EUP

81,50

82,660

83,700

85,200

0

Cost per

$0.76

$1.0

$0.9

$1.8

$4.67

EUP

5

8

8

30.

Unit

a

s

.

 

Beginning WIP Inventory

40

 

0

 

Units started

3,80

 

0

 

Units to account for

4,20

 

0

 

Beginning WIP Inventory

40

 

0

 

Units started & completed

3,50

 

0

 

Total units completed

3,90

 

0

Ending WIP Inventory

300

Units accounted for

4,20

0

Material

Conversion

Beginning WIP Inventory Units started & completed Ending WIP Inventory EUP

120

60

3,500

3,500

120

180

3,740

3,740

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154

Chapter 6

b.

Material

Conversion

Total

Current

$60,775

$46,750

$107,525

costs

Divided by

÷ 3,740

÷ 3,740

EUP

(FIFO)

Cost per

$16.25

$12.50

$28.75

EUP

31. a.

390,000 × ($7.50 + $9.00 + $10.20) = 390,000 × $26.70 =

$10,413,000

b. DM: $7.50 × (55,500 × 100%) DL: $9.00 × (55,500 ×

30%)

OH: $10.20 × (55,500 × 25%) Total of ending inven- tory

$416,250

149,850

141,525

$707,625

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Chapter 6

155

Cost of goods trans- ferred out

c.

$10,413,

000

Ending WIP

 

707,625

Total cost to account

$11,120,

for

625

32. a. BI cost

$

458,482.

00

Cost to complete:

DM (42,600 × 20% ×

$

$10.74)

91,504.

80

DL

(42,600 × 55% ×

325,208

$13.88)

.40

OH

(42,600 × 70% ×

$24.80)

739,536

1,156,24

.00

9.20

Total cost of BI trans-

$1,614,7

ferred

31.20

b. Goods started and completed = 1,570,000 42,600 = 1,527,400

Total FIFO cost per EUP = $10.74 + $13.88 + $24.80 = $49.42

Total cost of BI transferred

Cost of goods S&C (1,527,400 × $49.42) Total cost of goods trans- ferred

$

1,614,731.20

75,484,108.00

$

77,098,839.20

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156

Chapter 6

c. Cost of ending inventory:

DM (28,400 × 35% ×

$10.74)

$106,755.60

DL

(28,400 × 15% ×

59,128.80

$13.88)

OH

(28,400 × 25% ×

176,080.00

$24.80)

Total cost of EI

d. Total cost to account

for

Cost of goods trans- ferred Cost of ending inven- tory Total cost to account for

$341,964.40

$77,098,839.20

341,964.40

$77,440,080.60

33. a. Because direct material (other than packaging) is 100 percent complete

at the start of production, the number of EUP shown for direct material is also the number of units in BI.

Material (54,000 ÷ 54,000) = 100% Packaging (0 ÷ 54,000) = 0% Labor (16,200 ÷ 54,000) = 30% Overhead (18,900 ÷ 54,000) = 35%

b. Beginning WIP Inventory:

DM (other than packag-

$789,0

ing)

40

DL

91,8

62

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Chapter 6

157

Overhead

$1,026,

 

145,90

810

8

Complete beginning WIP Inventory:

Packaging (54,000 ×

$162,0

100% × $3.00)

00

DL (54,000 × 70% ×

409,75

$10.84)

2

Overhead (54,000 × 65% × $7.68)

269,56

841,320

8

Total cost to account for

$1,868,13

0

c. # of units S&C = Units completed Units in BI # of units S&C = 370,000 54,000 = 316,000

Cost of units S&C = 316,000 × ($29.50 + $3.00 + $10.84 + $7.68) = 316,000 × $51.02 = $16,122,320

d. DM (other than packaging)

$354,000

(12,000 × 100% × $29.50) Labor (12,000 × 30% × $10.84) Overhead (12,000 × 55% × $7.68) Total

39,024

50,688

$443,712

34. a. Beginning

WIP

Started

1,000

8,400

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158

Chapter 6

Units to account for

9,400

 

Units

Ma-

Conver-

 

terial

sion

Beginning WIP Started & com- pleted Ending WIP

1,000

1,000

1,000

8,100

8,100

8,100

300

240

210

Units accounted for

9,400

9,340

9,310

Total

Material

Conversion

Beginning

$ 5,006.30 $ 4,133.20 $

873.10

WIP

Current

86,354.00

62,928.00

23,426.00

period

Total

$91,360.30 $67,061.20 $24,299.10

costs

EUP

÷ 9,340

÷ 9,310

Cost per

$9.79

$7.18

$2.61

EUP

b. Cost transferred out = 9,100 × $9.79 = $89,089

c. Ending WIP DM (240 ×

$7.18)

CC (210 ×

$2.61)

Total

$1,723.20

548.10

$2,271.30

d.

Units

Mate-

Conversion

 

rial

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Chapter 6

159

Complete BI (40%, 70%) Started & com- pleted Ending WIP

1,000

700

 

400

8,100

8,100

 

8,100

300

210

 

240

Units accounted for

9,400

8,740

9,010

Total

Material

Conversion

Begin-

$ 5,006.30

ning WIP

Current

86,354.00 $62,928.00 $23,426.00

Period

Total

$91,360.30

costs

EUP

÷ 8,740

÷ 9,010

Cost per

$9.80

$7.20

$2.60

EUP

e. Transferred out:

Costs in BI Cost to complete BI DM (400 × $7.20) CC (700 × $2.60) Started & completed (8,100 × $9.80)

$5,006.30

2,880.00

1,820.00 $ 9,706.30

 

79,380.00

 

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160

Chapter 6

Total cost transferred

$89,086.30

f.Ending WIP DM (240 × $7.20)

$1,728

 

CC

(210 × $2.60)

546

Total

$2,274

g.

WIP Inventory RM Inventory

62,928

62,928

 

WIP Inventory Wages Payable (or Cash)

13,070

13,070

WIP Inventory Factory Overhead Control

10,356

10,356

FG

Inventory

89,089

WIP Inventory

 

89,089

35. a. Ending WIP Invento- ry

EUP

Cost per

 

Total

EUP

Cost

Transferred in (4,000 ×

4,000

$10

$40,000

100%)

Material (4,000 × 0%) Conversion (4,000 ×

0

2

0

3,200

6

19,200

80%)

Total cost

$18

$59,200

b. Transferred out: 25,000 × ($10 + $2 + $6) = 25,000 × $18 = $450,000

c.Finished Goods In- ven

450,000

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 6

161

to-

ry WIP Inventory–– Casing Dept.

450,000

36. a. Beginning WIP

5,000

Beginning WIP Inventory

5,000

Inventory Transferred in

80,000 Started & com- pleted 85,000 Ending WIP In- ventory Units accounted for

74,000

Units to ac- count for

6,000

85,000

 

Units

Trans.

Material

Conversion

 

In

Beginning WIP Inven- tory Started & completed Ending WIP Inven- tory EUP (WA)

5,000

5,000

5,000

5,000

74,000 74,000

74,000

74,000

6,000

6,000

0

4,800

85,000 85,000

79,000

83,800

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162

Chapter 6

b. Costs

Total

Trans.

Material Conversion

 

In

Beginning

$

8,643 $ 7,550

$

0

$ 1,093

WIP In-

ventory

Current

104,261

80,000

10,270

13,991

period

Total cost

$112,904 $87,550

$10,270

 

$15,084

to ac-

count for

Divided

÷

÷

÷ 83,800

 

by EUP

85,000

79,000

Cost per

$1.34

$1.03

$0.13

$0.18

EUP

c. 79,000 × $1.34 = $105,860

d. Transferred in (6,000 ×

$1.03)

Conversion (4,800 ×

$0.18)

Total ending WIP cost

$6,180

864

$7,044

37. a. Beginning WIP

5,000

Beginning WIP Inventory

5,000

Inventory Transferred in

80,000 Started & com- pleted 85,000 Ending WIP In- ventory Units accounted for

74,000

Units to ac- count for

6,000

85,000

Units

Ma-

Conver-

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Chapter 6

163

 

Tran.

terial

sion

In

Complete BI Started & com- pleted Ending WIP In- ventory EUP (WA)

5,000

0

5,000

3,500

74,00

74,00

74,00

74,000

0

0

0

 

4,800

6,000

6,000

0

85,00

80,00

79,00

82,300

 

0

0

0

b. Costs

Total

Trans.

Mate-

Conver-

 

In

rial

sion

Beginning WIP Inventory

$

8,643

Current period

$80,0

$10,2

$13,99

 

104,2

00

70

1

61

Total cost to ac- count for Divided by EUP

$112,

904

 

÷

÷

÷

80,00

79,00

82,300

 

0

0

Cost per EUP

$1.00

$0.13

$0.17

$1.30

c.

Beginning WIP costs Cost to complete:

$8,643

DM (5,000 $0.13) CC (3,500 $0.17) Started and completed (74,000 $1.30) Cost transferred out

650

595

$

9,888

 

96,200

 

$106,088

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164

Chapter 6

d.

Transferred in (6,000

$1.00)

$6,000

Conversion (4,800 $0.17)

Total ending WIP cost

38. a. Fabri- cation:

816

$6,816

Beginning

Beginning WIP Inventory

 

WIP

5,000

5,000

Invento-

ry

Started

40,000 Started & com- pleted 45,000 Ending WIP In- ventory Units accounted for

33,200

Units to ac- count for

6,800

45,000

 

Units

Material

Conversion

Beginning WIP Inventory Started & com- pleted Ending WIP Inventory EUP (WA)

5,000

5,000

5,000

33,200

33,200

33,200

6,800

6,800

4,080

45,000

45,000

42,280

Units started in Assembly = Units transferred out of Fabrication = 5,000 + 33,200 = 38,200

Assembly:

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Chapter 6

165

Beginning

Beginning WIP Inventory

 

WIP

2,000

2,000

Inventory

Started

38,200 Started & com- pleted 40,200 Ending WIP In- ventory Units accounted for

32,100

Units to ac- count for

6,100

40,200

Units

Material Conversion

Trans.

In

Beginning WIP In- ventory Started & completed Ending WIP In- ventory EUP (WA)

2,000

2,000

2,000

2,000

32,100 32,100

32,100

32,100

6,100

6,100

0

915

40,200 40,200

34,100

35,015

b. Fabrication:

Unit

s

Mate- Conver-

rial

sion

Beginning WIP Inventory

5,00

0

3,750

0

Started & complet-

33,2

33,20

33,20

ed

00

0

0

Ending WIP Inven- tory

6,80

6,800

4,080

0

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166

Chapter 6

EUP (FIFO)

45,0

40,00

41,03

00

0

0

Assembly:

Units