Question

1. Company ATS uses Process Costing system. Data about Company ATS is given below: Shaping Department . 200.000 units Assembly Department 20000 units - Required: Data for December Beginning Work in Process Production started Transferred in From Previous Department Completed Goods Inv Ending WIP Inv. Comp. as to Direct Material Comp. as to Convers. Work Costs: Beginning Work in Process Transferred in from Previous Department Direct Materials Added Conversion Costs Added 150.000 units 50.000 units % 70 % 80 130.000 units 40.000 units % 80 % 60 - $ 140.000 $740.000 $570.000 $ 324.000 $ 616.000 Calculate Ending WIP Inventory.Shaping, Ending WIP Inventory Insertion and Finished Goods Inventory. (50 pts)

Answer 1

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ATS

Note: It is assumed that the company used FIFO method.

Cost of Production Report- Shaping Department

		Equivalent Units			Note
Units	Physical Units	Direct Materials	Conversion
Units charged to production:
Inventory in process on Dec 1	-
Plus: Started production in Dec	200,000.00
Total physical units accounted for	200,000.00
Units to be assigned costs:
Inventory in process on Dec 1
Started and completed in Dec	150,000.00	150,000.00	150,000.00
Transferred to Assembly Dept. in Dec	150,000.00	150,000.00	150,000.00		A
Inventory in process, Dec 31	50,000.00	35,000.00	40,000.00		B= Units multiplied by % of completion	This is answer to Ending Inventory (units)- Shaping.
Total units to be assigned costs:	200,000.00	185,000.00	190,000.00		C=A+B
Cost Information				Total
Costs per equivalent unit
Total costs for Dec		740,000.00	570,000.00	1,310,000.00	D
Total equivalent units		185,000.00	190,000.00		See Note C
Costs per equivalent unit		4.00	3.00		E=D/C
Costs assigned to production
Inventory in process, Dec 1
Costs incurred in Dec				1,310,000.00	See D
Total costs accounted for				1,310,000.00	See D
Costs allocated to completed and partially completed units
Inventory in process, Dec 1 balance
To complete Inventory in Process, Dec 1
Started and completed in Dec		600,000.00	450,000.00	1,050,000.00	F=A*E
Transferred to Assembly Dept. in Dec		600,000.00	450,000.00	1,050,000.00	F
Inventory in process, Dec 31		140,000.00	120,000.00	260,000.00	G=B*E	This is answer to Ending Inventory ($)- Shaping.
Total costs assigned				1,310,000.00	H=F+G

Cost of Production Report- Assembly Department

		Equivalent Units			Note
Units	Physical Units	Direct Materials	Conversion
Units charged to production:
Inventory in process on Dec 1	20,000.00
Plus: Received from Shaping Dept. in Dec	150,000.00					Started and completed in Dec
Total physical units accounted for	170,000.00					Transferred to Finished Goods in Dec	130,000.00
						Inventory in process on Dec 1	20,000.00
Units to be assigned costs:						Started and completed in Dec	110,000.00	I
Inventory in process on Dec 1	20,000.00	20,000.00	20,000.00		J
Started and completed in Dec	110,000.00	110,000.00	110,000.00		See I
Transferred to Finished Goods in Dec	130,000.00	130,000.00	130,000.00		K= I+J	This is answer to Finished Goods (units).
Inventory in process, Dec 31	40,000.00	32,000.00	24,000.00		L= Units multiplied by % of completion	This is answer to Ending Inventory (units)- Assembly.
Total units to be assigned costs:	170,000.00	162,000.00	154,000.00		M=K+L
Cost Information				Total
Costs per equivalent unit
Total costs for Dec		324,000.00	616,000.00	940,000.00	N
Total equivalent units		162,000.00	154,000.00		See M
Costs per equivalent unit		2.00	4.00		N=N/M
Costs assigned to production
Inventory in process, Dec 1				140,000.00	O
Costs incurred in Dec				940,000.00	P
Total costs accounted for				1,080,000.00	Q=O+P
Costs allocated to completed and partially completed units
Inventory in process, Dec 1 balance				140,000.00	O
To complete Inventory in Process, Dec 1		40,000.00	80,000.00	120,000.00	R= J*N
Started and completed in Dec		220,000.00	440,000.00	660,000.00	S=I*N
Transferred to Finished Goods in Dec		260,000.00	520,000.00	780,000.00	T=K*N	This is answer to Finished Goods ($).
Inventory in process, Dec 31		64,000.00	96,000.00	160,000.00	U=L*N	This is answer to Ending Inventory ($)- Assembly.
Total costs assigned				1,080,000.00	V=O+T+U