Download - Ch 06 Process Costing
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Process Costing
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ProcessCosting
Job-orderCosting
Many units of a single, homogeneous product flow evenly through a continuous production process.
One unit of product is indistinguishable from any other unit of product.
Each unit of product is assigned an average cost.
Many units of a single, homogeneous product flow evenly through a continuous production process.
One unit of product is indistinguishable from any other unit of product.
Each unit of product is assigned an average cost.
Types of Costing Systems Used to Determine Product Costs
Chapter 5
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Equivalent Units of Production –Weighted Average Method
The weighted average method . . .
Makes no distinction between work done in prior and current period.
Blends together units and costs from prior period and current period.
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Production Report
A computation ofcost per equivalent unit.
A computation ofcost per equivalent unit.
Section 1
Section 2
Section 3
Production Report A quantity schedule showing the flow of units and the computation of
equivalent units.
A quantity schedule showing the flow of units and the computation of
equivalent units.
A reconciliation of cost flows for the period,including:
Total cost for units completed andtransferred from theprocessing department.
Total cost for partiallycompleted units remaining in work inprocess.
A reconciliation of cost flows for the period,including:
Total cost for units completed andtransferred from theprocessing department.
Total cost for partiallycompleted units remaining in work inprocess.
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Work in process, May 1: 200 units Materials: 55% complete. $ 9,600Conversion: 30% complete. 5,575
Production started during May: 5,000 unitsProduction completed during May: 4,800
units
Costs added to production in MayMaterials cost $ 368,600Conversion cost 350,900
Work in process, May 31: 400 unitsMaterials 40% complete.Conversion 25% complete.
Work in process, May 1: 200 units Materials: 55% complete. $ 9,600Conversion: 30% complete. 5,575
Production started during May: 5,000 unitsProduction completed during May: 4,800
units
Costs added to production in MayMaterials cost $ 368,600Conversion cost 350,900
Work in process, May 31: 400 unitsMaterials 40% complete.Conversion 25% complete.
Production Report Example
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Section 1: Quantity Schedule with Equivalent Units
Production Report Example
Units to be accounted for: Work in process, May 1 200 Started into production 5,000 Total units 5,200
Equivalent unitsMaterials Conversion
Units accounted for as follows: Completed and transferred 4,800 4,800 4,800 Work in process, May 31 400
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Production Report Example
Units to be accounted for: Work in process, May 1 200 Started into production 5,000 Total units 5,200
Equivalent unitsMaterials Conversion
Units accounted for as follows: Completed and transferred 4,800 4,800 4,800 Work in process, May 31 400 Materials 40% complete 160
5,200 4,960
Section 1: Quantity Schedule with Equivalent Units
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Production Report Example
Units to be accounted for: Work in process, May 1 200 Started into production 5,000 Total units 5,200
Equivalent unitsMaterials Conversion
Units accounted for as follows: Completed and transferred 4,800 4,800 4,800 Work in process, May 31 400 Labor 25% Complete 160 100
5,200 4,960 4,900
Section 1: Quantity Schedule with Equivalent Units
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Section 2: Compute cost per equivalent unit
Production Report Example
TotalCost Materials Conversion
Cost to be accounted for: Work in process, May 1 15,175$ 9,600$ 5,575$ Costs added in the Shipping and Milling Department 719,500 368,600 350,900
Total cost 734,675$ 378,200$ 356,475$
Equivalent units 4,960 4,900
Cost per equivalent unit
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TotalCost Materials Conversion
Cost to be accounted for: Work in process, May 1 15,175$ 9,600$ 5,575$ Costs added in the Shipping and Milling Department 719,500 368,600 350,900
Total cost 734,675$ 378,200$ 356,475$
Equivalent units 4,960 4,900
Cost per equivalent unit 76.25$
Production Report Example
Section 2: Compute cost per equivalent unit
$378,200 ÷ 4,960 units = $76.25
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TotalCost Materials Conversion
Cost to be accounted for: Work in process, May 1 15,175$ 9,600$ 5,575$ Costs added in the Shipping and Milling Department 719,500 368,600 350,900
Total cost 734,675$ 378,200$ 356,475$
Equivalent units 4,960 4,900
Cost per equivalent unit 76.25$ 72.75$ Total cost per equivalent unit = $76.25 + $72.75 = $149.00
Production Report Example
$356,475 ÷ 4,900 units = $72.75
Section 2: Compute cost per equivalent unit
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Total Equivalent UnitsCost Materials Conversion
Cost accounted for as follows: Transferred out during May 715,200$ 4,800 4,800 Work in process, May 31: Materials 160 Conversion 100
Total work in process, May 31
Total cost accounted for
4,800 units @ $149.00
Production Report Example
Section 3: Cost Reconciliation
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Total Equivalent UnitsCost Materials Conversion
Cost accounted for as follows: Transferred out during May 715,200$ 4,800 4,800 Work in process, May 31: Materials 12,200 160 Conversion 7,275 100
Total work in process, May 31 19,475
Total cost accounted for 734,675$
160 units @ $76.25
Production Report Example
Section 3: Cost Reconciliation
All costs accounted for
100 units @ $72.75
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How would the unit cost measures change if the
department uses Fifo rather than weighted average
costing?
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Production Report -FIFO Section 1: Quantity Schedule with Equivalent Units
Units accounted for: Equivalent Units:
Transfers: Units Material LOH
From beg. Invent. 200u 90u 140u
From new starts 4600u 4600u 4600u
Ending inventory 400u 160u 100u
Current work done 4850u 4840u
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TotalCost Materials Conversion
Cost to be accounted for:
Costs added in the Shipping and Milling Department 719,500 368,600 350,900
Total cost 719,500$ 368,600$ 350,900$
Equivalent units 4,850 4,840
Cost per equivalent unit 76.00$ 72.50$ Total cost per equivalent unit = $76.25 + $72.75 = $149.0076.00+72.50 148.500$
Production Report -FIFOCompute current period cost per equivalent unit
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Cost Reconciliation -FIFO
Units accounted for: Costs:
Transfers: Units Material LOH
From beg. Invent. 200u
From new starts 4600u
Ending inventory 400u
Total costs
Accounted for:
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Cost Reconciliation -FIFO
Units accounted for: Costs:
Transfers: Units Material LOH
From beg. Invent. 200u $ 16,4401 $ 15,7252
From new starts 4600u
Ending inventory 400u
Total costs
Accounted for:
1 $9600 + 90eu x $76.00 =2 $ 5575 + 140eu x $72.50 =
$ 16,440
$ 15,725
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Cost Reconciliation -FIFO
Units accounted for: Costs:
Transfers: Units Material LOH
From beg. Invent. 200u $ 16,4401 $ 15,7252
From new starts 4600u $349,6003 $333,5004
Ending inventory 400u
Total costs
Accounted for:
1 $9600 + 90eu x $76.00 =2 $ 5575 + 140eu x $72.50 =3 4,600eu x $76.00 =4 4,600eu x $72.50 =
$ 16,440
$ 15,725
$ 349,600
$ 333,500
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Cost Reconciliation -FIFO
Units accounted for: Costs:
Transfers: Units Material LOH
From beg. Invent. 200u $ 16,4401 $ 15,7252
From new starts 4600u $349,6003 $333,5004
Ending inventory 400u $ 12,1605 $ 7,2506
Total costs
Accounted for:
$ 378,200+ = $734,675
$356,475
1 $9600 + 90eu x $76.00 =2 $ 5575 + 140eu x $72.50 =3 4,600eu x $76.00 =4 4,600eu x $72.50 =5 160eu x $76.00 =6 100eu x $72.50 =
$ 16,440
$ 15,725
$ 349,600
$ 333,500
$ 12,160
$ 7,250
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Fifo differs from weighted average :
Current period unit costs are based on current work done, and current costs charged to the process.
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Fifo differs from weighted average :
Current work does not include production from the previous period, in the beginning inventory.
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Fifo differs from weighted average :
Transfers out are costed as two separate lots: one from the beginning inventory, and one from current starts.
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Fifo differs from weighted average :
The ending inventory is priced at current period costs (not as a weighted average of current and prior period costs).
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Wtd. Avg. FIFO Diff.
Costs transferred to next dept. $715,200 $715,265 ($65)
Costs in ending inventory $ 19,475 $ 19,410 +$65
Total costs accounted for $734,675 $734,675 -0-
Unit costs: Materials LOH Total
Weighted average unit costs $ 76.25 $72.75 $149.00
Current period production costs $ 76.00 $72.50 $148.50
Previous period production costs $ 87.27 $ 92.92 $180.19
Comparisons of Weighted Average and FIFO methods
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Spoilage in a Process CostingSystem
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Terminology
Spoilage refers to unacceptable unitsdiscarded or sold for reduced prices.
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Normal Spoilage
Normal spoilage is spoilage that is an inherentresult of the particular production process and
arises even under efficient operating conditions.
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Abnormal Spoilage
Abnormal spoilage is spoilage that should notarise under efficient operating conditions.
Companies record the units of abnormalspoilage and keep a separate Loss from
Abnormal Spoilage account.
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Accounting for spoilage inprocess costing using the
weighted-average method.
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Weighted-Average: Spoilage
The following example is for the month ofNovember and relates to Big Mountain, Inc.
Direct materials are introduced at the beginningof the production cycle.
Conversion costs are added evenly during the cycle.
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Weighted-Average: Spoilage
Normally the spoiled units are 2% of the unspoiled output.
Assume that Big Mountain, Inc., had 1,000 unitsin the beginning work in process inventory,
100% complete for materials ($9,700), and 60%complete for conversion ($10,000).
During the month, an additional 35,000 units were put into production.
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Weighted-Average: Spoilage
Ending work in process inventory was 4,000 units(100% materials and 20% conversion).
Costs added during the month were $87,500 formaterials and $72,000 for conversion.
What are the costs assigned to the units completed,spoiled, and in ending work in process inventory?
During the month 31,000 units were completed and transferred out to the next department.
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Physical Units (Step 1)
Work in process, beginning (November 1)100% material, 60% conversion costs 1,000Started during November: 35,000
36,000
Good units completed and transferred out: 31,000Work in process, ending inventory:100% material 20% conversion costs 4,000
35,000
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Physical Units
What is the number of spoiled units?
36,000 – 35,000 = 1,000
What is the normal spoilage?
31,000 × 2% = 620
What is the abnormal spoilage?
1,000 – 620 = 380
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Compute EquivalentUnits
Materials ConversionCompleted and transferred 31,000 31,000Normal spoilage 620 620Abnormal spoilage 380 380Ending inventory 4,000 800Equivalent units 36,000 32,800
100%100% 20%20%
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Compute EquivalentUnit Costs
Materials Conversion Beginning inventory $ 9,700 $10,000 Current costs 87,500 72,000 Total $97,200 $82,000 Equivalent units 36,000 32,800 Cost per unit $2.70 $2.50
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Summarize Total Costs
Work in process beginning inventory:Materials $ 9,700Conversion 10,000Total beginning inventory $ 19,700
+ Current costs:Materials $87,500Conversion 72,000
= Costs to account for $179,200
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Assign Total Costs
Good units completed and transferred out(31,000 units):Costs before adding normal spoilage:31,000 × ($2.70 + $2.50) $161,200Normal spoilage: 620 × ($2.70 + $2.50) 3,224Total $164,424
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Assign Total Costs (cont’d)
Abnormal spoilage: 380 × ($2.70 + $2.50) $ 1,976Work in process, ending (4,000 units):Direct materials (4,000 × $2.70) $10,800Conversion (800 × $2.50) 2,000Total $12,800
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Cost Reconciliation
Costs of units completed and transferred out (including normal spoilage) $164,424Cost of abnormal spoilage 1,976Costs in ending inventory 12,800Total costs accounted for $179,200
The $1,976 cost of abnormal spoilageis assigned to the Loss fromAbnormal Spoilage account.
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Journal entries for process costing with normal and abnormal spoilage
Return to the beginning of the Big Mountain Company example, and write out all journal entries to reflect the cost
flows in the above example. For simplicity, assume that the firm has only one
processing department (implying that transfers out are finished goods).
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End of Process Costing Discussion
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Handout 6 (a):
Process costing: FIFO
and Wtd. Average
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Papermill Products Co. provides the following information for a recent month’s production
activity in its Bleaching Department. Materials are added at the beginning of the bleaching
process, and conversion costs are added evenly throughout the bleaching process. The
beginning work in process was 100% complete with respect to material costs, and was 80%
complete with respect to conversion costs. The ending work in process is 100% complete
with respect to material costs, and is 50% complete with respect to conversion costs.
Physical Units
Material Costs
Conversion Costs
Total Costs
Work in process, beginning 5,000u $ 6,000 $ 4,200 $ 10,200 New starts during this month 85,000u $39,000 $48,000 $ 87,000 Total to account for 90,000u $ 97,200 Transfers to the next department 84,000u Work in process, ending 6,000u
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Physical Units
Material Costs
Conversion Costs
Total Costs
Work in process, beginning 5,000u $ 6,000 $ 4,200 $ 10,200 New starts during this month 85,000u $39,000 $48,000 $ 87,000 Total to account for 90,000u $ 97,200 Transfers to the next department 84,000u Work in process, ending 6,000u
Required: Assume the company uses weighted average process costing, and determine the following amounts:
(a) Equivalent units of production for materials and for conversion costs
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Physical Units
Material Costs
Conversion Costs
Total Costs
Work in process, beginning 5,000u $ 6,000 $ 4,200 $ 10,200 New starts during this month 85,000u $39,000 $48,000 $ 87,000 Total to account for 90,000u $ 97,200 Transfers to the next department 84,000u Work in process, ending 6,000u
Required: Assume the company uses weighted average process costing, and determine the following amounts:
(a) Equivalent units of production for materials and for conversion costs
Measurement of equivalent units (EU) for weighted average costing: Units Materials EU Conversion EU Units transferred out 84,000 84,000 84,000 Units in ending inventory (.5) 6,000 6,000 3,000 Total 90,000 90,000 87,000
(b) Current materials and conversion costs per unit
Costs per equivalent unit Materials Conversion Charges (current and beg.invent.) $45,000 $52,200 Equivalent units (see above) 90,000 87,000 Cost per EU $0.50 $0.60
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Physical Units
Material Costs
Conversion Costs
Total Costs
Work in process, beginning 5,000u $ 6,000 $ 4,200 $ 10,200 New starts during this month 85,000u $39,000 $48,000 $ 87,000 Total to account for 90,000u $ 97,200 Transfers to the next department 84,000u Work in process, ending 6,000u
(c)Total (material plus conversion) costs assigned to the ending work in process inventory Material 6,000 EU @ $0.50 = $3,000 Conversion (.5) 3,000 EU @ $0.60 = $1,800 Total $4,800
(d) Total costs transferred to the next department 84,000 units @ ($0.50 + 0.60) = $92,400
(e) Provide journal entries to reflect the above activities.
Dr. Work in process- material $39,000 Cr. Raw materials
$39,000
Dr. Work in process- conversion (LOH) $48,000 Cr. Payroll suspense; Applied OH
$48,000
Dr. Finished goods (or WIP/ subs. dept.) $92,400 Cr. Work in process/ Bleaching dept. $92,400
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Assume instead that the company uses FIFO process costing, and determine the following amounts:
(f) Equivalent units of production for materials and for conversion costs
Measurement of equivalent units (EU) for FIFO costing: units Materials EU Conversion EU Units transferred out From beginning inventory (.8) 5,000 --- 1,000 New starts and completes 79,000 79,000 79,000 Units in ending inventory (.5) 6,000 6,000 3,000 Total 90,000 85,000 83,000
Physical Units
Material Costs
Conversion Costs
Total Costs
Work in process, beginning 5,000u $ 6,000 $ 4,200 $ 10,200 New starts during this month 85,000u $39,000 $48,000 $ 87,000 Total to account for 90,000u $ 97,200 Transfers to the next department 84,000u Work in process, ending 6,000u
(g) Current materials and conversion costs per unit
Costs per equivalent unit Materials Conversion Charges (current only) $39,000 $48,000 Equivalent units (see above) 85,000 83,000 Cost per EU $0.4588 $0.5783 Total unit cost in the current period: $ 1.0371
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(h) Total (material plus conversion) costs assigned to the ending work in process inventory Material 6,000 EU @ $0.4588 = $2,753 Conversion (.5) 3,000 EU @ $0.5783 = $1.735 Total $4,488 (i) Total costs transferred to the next department
Costs transferred out: From beginning inventory $10,200 + (1,000 EU)($.5783) = $10,778 New starts and completes (79,000EU)($1.0371) = $81,931 Total = $92,709 Note: $92,709 + 4.488 = $97,197. Differs from $97,200 due to $3. rounding error.
(j) Unit cost for materials and for conversion in the previous period, based on information regarding the costs assigned to the beginning inventory
The beginning inventory includes $6,000 of materials cost for 5,000 equivalent units, or $1.20 per unit. The beginning inventor includes $$4,200 of conversion cost for 4,000 equivalent units, of $1.05 per unit.
Physical Units
Material Costs
Conversion Costs
Total Costs
Work in process, beginning 5,000u $ 6,000 $ 4,200 $ 10,200 New starts during this month 85,000u $39,000 $48,000 $ 87,000 Total to account for 90,000u $ 97,200 Transfers to the next department 84,000u Work in process, ending 6,000u
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(k) Provide journal entries to reflect the above activities. Dr. Work in process- material $39,000 Cr. Raw materials
$39,000
Dr. Work in process- conversion (LOH) $48,000 Cr. Payroll suspense; Applied OH
$48,000
Dr. Finished goods (or WIP/ subs. dept.) $92,709 Cr. Work in process/ Bleaching dept. $92,709
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Handout 6 (b):
Process costing: Spoiled Units
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Papermill Products Co. provides the following information for July’s production activity in its
Bleaching Department. Materials are added at the beginning of the bleaching process, and
conversion costs are added evenly throughout the bleaching process. Inspection occurs at the very
end of the bleaching process, before goods are transferred out to the Cutting Department.. The
company expects “normal” spoilage to average about ten percent of the unspoiled units transferred
out (i.e., normally, one unit is spoiled for every ten good units transferred to the next department).
The beginning work in process was 100% complete with respect to material costs, and was 80%
complete with respect to conversion costs. The ending work in process is 100% complete with
respect to material costs, and is 50% complete with respect to conversion costs. Pertinent
information regarding current activity in the bleaching department is given in the following table:
Physical Units
Material Costs
Conversion Costs
Total Costs
Work in process, beginning 5,000u $ 6,000 $ 4,200 $ 10,200 New starts during this month 85,000u $39,000 $48,000 $ 87,000 Total to account for 90,000u $ 97,200 Transfers to the next department 72,000u Normal spoilage ? Abnormal spoilage ? Work in process, ending 6,000u
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Physical Units
Material Costs
Conversion Costs
Total Costs
Work in process, beginning 5,000u $ 6,000 $ 4,200 $ 10,200 New starts during this month 85,000u $39,000 $48,000 $ 87,000 Total to account for 90,000u $ 97,200 Transfers to the next department 72,000u Normal spoilage ? Abnormal spoilage ? Work in process, ending 6,000u
Required: Assume the company uses weighted average process costing, and determine the following amounts:
(a) Number of units of normal and abnormal spoilage
A total of 12,000 units are spoiled (90,000 – 78,000 units). Normal spoilage is 7,200
units (10% of 72,000 unspoiled units transferred out). Abnormal spoilage is 4,800
units (12,000 – 7,200 units).
(b) Equivalent units of production for materials and for conversion costs
Measurement of equivalent units (EU) for weighted average costing: Units Materials EU Conversion EU Units transferred out 72,000 72,000 72,000 Normal spoilage 7,200 7,200 7,200 Abnormal spoilage 4,800 4,800 4,800 Units in ending inventory (.5) 6,000 6,000 3,000 Total 90,000 90,000 87,000
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(c) Current period unit costs for materials and conversion costs
Costs per equivalent unit Materials Conversion Charges (current and beg.invent.) $45,000 $52,200 Equivalent units (see above) 90,000 87,000 Cost per EU $0.50 $0.60 (d) Total costs assigned to units transferred to the cutting department (including the cost of normal
spoilage)
(72,000 + 7,200 units) @ ($0.50 + 0.60) = $87,120
(e) Total (material plus conversion) costs assigned to the ending work in process inventory Material 6,000 EU @ $0.50 = $3,000 Conversion (.5) 3,000 EU @ $0.60 = $1,800 Total $4,800
(f) Total costs assigned to abnormal spoilage
4,800 units @ $1.10 = $5,280 Note that ($87,120 + 4,800 + 5,280) = $97,200
Physical Units
Material Costs
Conversion Costs
Total Costs
Work in process, beginning 5,000u $ 6,000 $ 4,200 $ 10,200 New starts during this month 85,000u $39,000 $48,000 $ 87,000 Total to account for 90,000u $ 97,200 Transfers to the next department 72,000u Normal spoilage ? Abnormal spoilage ? Work in process, ending 6,000u
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Provide journal entries to record the cost flows into and out of the Bleaching department for the month of July.
Dr. Work in process- material $39,000 Cr. Raw materials
$39,000
Dr. Work in process- conversion (LOH) $48,000 Cr. Payroll suspense; Applied OH
$48,000
Dr. Work in process/Cutting dept. $87,120 Cr. Work in process/ Bleaching dept. $87,120 Dr. Abnormal spoilage (expense) $5,280 Cr. Work in process/Bleaching dept. $5,280
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Handout 6(c)
Multiple choice questions
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1. Colby Company has a process costing system in which the weighted-average method is used. The company adds all materials at the beginning of the process in the Molding Department, which is the first of two stages of its production process. Information concerning the materials used in the Molding Department during March is as follows:
What was the materials cost of the units transferred out during March? A. $5,100 B. $7,500 C. $11,220 D. $49,470
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1. Colby Company has a process costing system in which the weighted-average method is used. The company adds all materials at the beginning of the process in the Molding Department, which is the first of two stages of its production process. Information concerning the materials used in the Molding Department during March is as follows:
What was the materials cost of the units transferred out during March? A. $5,100 B. $7,500 C. $11,220 D. $49,470
Total costs are $57,120 and total units are 112,000, so unit costs are $0.51. Transfers consist of 97,000 units costed at $49,470 (97,000 x $.51).
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2. Jimmy Company uses the weighted-average method in its process costing system. The ending work in process inventory consists of 9,000 units. The ending work in process inventory is 100% complete with respect to materials and 70% complete with respect to labor and overhead. If the cost per equivalent unit for the period is $3.75 for material and $1.25 for labor and overhead, what is the balance of the ending work in process inventory account? A. $31,500 B. $33,750 C. $41,625 D. $45,000
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2. Jimmy Company uses the weighted-average method in its process costing system. The ending work in process inventory consists of 9,000 units. The ending work in process inventory is 100% complete with respect to materials and 70% complete with respect to labor and overhead. If the cost per equivalent unit for the period is $3.75 for material and $1.25 for labor and overhead, what is the balance of the ending work in process inventory account? A. $31,500 B. $33,750 C. $41,625 D. $45,000
Materials cost is $33,750 (9,000 x 3.75) and conversion cost is $7,875 (6,300 x 1.25). The total is $41,625.
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3. Jersey Company has a process costing system in which it uses the weighted-average method. The equivalent units for conversion costs for the month were 47,500 units. The beginning work in process inventory consisted of 15,000 units, 60% complete with respect to conversion costs. The ending work in process inventory consisted of 10,000 units, 75% complete with respect to conversion costs. The number of units started during the month was: A. 25,000 units B. 34,000 units C. 35,000 units D. 40,000 units
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3. Jersey Company has a process costing system in which it uses the weighted-average method. The equivalent units for conversion costs for the month were 47,500 units. The beginning work in process inventory consisted of 15,000 units, 60% complete with respect to conversion costs. The ending work in process inventory consisted of 10,000 units, 75% complete with respect to conversion costs. The number of units started during the month was: A. 25,000 units B. 34,000 units C. 35,000 units D. 40,000 units
The equivalent units for conversion imply that 40,000 units were transferred, so 50,000 units were available. The beginning inventory is 15,000 units, so an additional 35,000 units were started (15,000 + 35,000 = 50,000).
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4. Boswal Company uses the weighted-average method in its process costing system. The Assembly Department started the month with 6,000 units in its beginning work in process inventory that were 80% complete with respect to conversion costs. An additional 52,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 18,000 units in the ending work in process inventory of the Assembly Department that were 20% complete with respect to conversion costs. What were the equivalent units for conversion costs in the Assembly Department for the month? A. 43,600 B. 38,800 C. 64,000 D. 40,000
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4. Boswal Company uses the weighted-average method in its process costing system. The Assembly Department started the month with 6,000 units in its beginning work in process inventory that were 80% complete with respect to conversion costs. An additional 52,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 18,000 units in the ending work in process inventory of the Assembly Department that were 20% complete with respect to conversion costs. What were the equivalent units for conversion costs in the Assembly Department for the month? A. 43,600 B. 38,800 C. 64,000 D. 40,000
A total of 58,000 units are available (6,000 + 52,000). Of these units, 40,000 were complete and transferred. The remaining 18,000 units are 20% complete, equivalent to 3,600 units. The total equivalent units is 43,600 (40,000 + 3,600).
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5. The following information was provided by Fystro Corporation for the month of March. Fystro uses the weighted-average method in its process costing system.
How much cost did Fystro add to production during March? A. $57,000 B. $67,000 C. $81,000 D. $62,000
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5. The following information was provided by Fystro Corporation for the month of March. Fystro uses the weighted-average method in its process costing system.
How much cost did Fystro add to production during March? A. $57,000 B. $67,000 C. $81,000 D. $62,000
Total cost available is $79,000 ($74,000 + 5,000). Of this amount, $12,000 was in the beginning inventory, and the remaining $67,000 was added to production during the month.