Question

Exercise Over Chapter 6 Material (Process Costing)

(NOTE: On your assignment submission, you only need to provide me with four numbers with labels “a” and “b” and “c” and “d” to correspond to the requirements below. You do NOT have to do full Cost of Production Reports for this assignment [but you may sketch out Cost of Production Reports on your own separate pieces of paper to help you get the answers for this assignment if that helps you].)

T Company makes a product that goes through a single processing department. Direct Materials are added at the start of the process, while Conversion Costs are added evenly during the process. T Company uses the Weighted Average method of Process Costing.

During last month, T Company had 10,870 units in beginning Work-in-Process Inventory which were 100% complete for materials and 30% complete for conversion. There were 43,130 units started during the period. After finishing the 10,870 units in beginning Work-in-Process Inventory, the company started and completed 29,100 units. (That means the total units transferred to Finished Goods for the period was 10,870 + 29,100 = 39,970 units.) T Company had 14,030 units in ending Work-in-Process Inventory which were 100% complete for materials and 60% complete for conversion.

The beginning Work-in-Process Inventory had a value of $127,355 (which was $105,895 of materials and $21,460 of conversion). During the month, costs added were $998,383 (which was $366,605 of materials and $631,778 of conversion).

PART #1 REQUIRED: Now assume all of the above EXCEPT that T Company uses the Weighted Average method of Process Costing. (a) Calculate the dollar cost of items transferred out of Work-in-Process Inventory and into Finished Goods Inventory for the month using the Weighted Average method of Process Costing. (b) Calculate the dollar cost of items in Ending Inventory (at the end of the month) using the Weighted Average method of Process Costing.

PART #2 REQUIRED: Now assume all of the above EXCEPT that T Company uses the FIFO method of Process Costing. (c) Calculate the dollar cost of items transferred out of Work-in-Process Inventory and into Finished Goods Inventory for the month using the FIFO method of Process Costing. (d) Calculate the dollar cost of items in Ending Inventory (at the end of the month) using the FIFO method of Process Costing.

Answer 1

Part : 1 :

Ans a. Dollar Cost of Items transferred = $ 889,332.50

Ans b. Dollar Cost of Items in Ending Inventory = $ 236,405.50

Part : 2 :

Ans c. Dollar Cost of Items transferred = $ 888,631

Ans d. Dollar Cost of Items in Ending Inventory = $ 237,107

WORKINGS :

х XI - 95 Process Costing - Microsoft Excel (Product Activation Failed) File Home Insert Formulas Data Review View ♡ Page Layout foc A1 А B E F H 1 с D T COMPANY WORKINGS AS PER WEIGHTED AVERAGE METHOD PRODUCTION COST REPORT 2 3 4 5 6 7 $ 127,355.00 $ 998,383.00 $1,125,738.00 $1,125,738.00 $ 8 9 10 11 Beginning Inventory Cost incurred in Current Period Total Costs to account for Total Costs accounted for *Difference due to rounding cost/unit Units Reconciliation Units to account for Beginning Work in Process Units started this period This units to account for Total units accounted for Completed and transferred out (Bal Fig) Ending Work in Process Total units accounted for 12 13 10,870 43,130 54,000 14 15 16 17 18 39,970 14,030 54,000 19 20 Equivalent Units of Production (EUP) 21 Units % MATERIALS EUP - MATERIALS % CONVERSION EUP - CONVERSION 22 23 Units Accounted For Transferred Out Ending Work in Process Total Units Accounted for 24 39,970 14,030 54,000 100% 100% 100% 39,970.00 14,030.00 54,000.00 100% 60% 100% 39,970.00 8,418.00 48,388.00 25 26 27 28 29 KI Sheet26 Sheet27 Sheet28 Sheet29 Sheet30 Sheet31 Sheet32 Sheet33 Sheet34 Sheet35 Ready BO 100% 2:18 AM 23-Sep-20

х Process Costing - Microsoft Excel (Product Activation Failed) X 95 File Home Insert Formulas Data Review View ♡ Page Layout foc A 30 А B c D E F G H 30 31 COSTS PER EUP MATERIALS CONVERSION COSTS 32 33 34 $ 35 Cost of Beginning Work in Process Cost incurred in Current Year Total Costs / Equivalent Units Costs per Equivalent Unit of Production $ $ $ 36 37 $ $ 105,895.00 366,605.00 472,500.00 54,000.00 8.75 Costs EUP Costs EUP 21,460.00 631,778.00 653,238.00 48,388.00 13.50 38 $ $ 39 40 TOTAL COSTS ACCOUNTED FOR : 41 42 43 Transferred Out Materials Conversion Costs EUP Cost per EUP 39,970.00 $ 8.75 39,970.00 $ 13.50 $ $ Total Cost 349,737.50 539,595.00 44 45 Total Cost transferred out $ 889,332.50 46 47 48 Ending Work in Process Materials Conversion Costs Total Costs of ending Work in Process 14,030.00 $ 8,418.00 $ 8.75 13.50 $ $ 122,762.50 113,643.00 49 50 $ 236,405.50 51 52 Total Costs accounted for $ 1,125,738.00 53 54 55 56 57 58 Sheet26 Sheet27 Sheet28 Sheet29 Sheet30 Sheet31 Sheet32 Sheet33 Sheet34 Sheet35 Ready BO 100% 2:18 AM 23-Sep-20

Process Costing - Microsoft Excel (Product Activation Failed) File Home Insert Page Layout Formulas Data Review View A1 A B с E F H 1 D T COMPANY WORKINGS AS PER FIFO METHOD PRODUCTION COST REPORT 2 3 4 5 Statement of Equivalent Unit 6 7 % of Completion FOR MATERIALS % Completed Equivalent Units 100% 10,870.00 Units 10,870 43,130 54,000 FOR CONVERSION COST % Completed Equivalent Units 30% 3,261.00 9 10 11 Units Introduced Beginning Inventory Total Units Introduced (Bal Fig) Units to Account for Further Processed & Transferred From Beginning Inventory From Current Year Input Ending Inventory Total Units Accounted for 12 13 10,870 29,100 14,030 54,000 0% 100% 100% 100% 70% 100% 60% 100% 29,100.00 14,030.00 43,130.00 7,609.00 29,100.00 8,418.00 45, 127.00 14 15 16 17 18 19 20 21 ($) 366,605.00 43,130.00 8.50 $ Calculation of Cost per Unit : COST OF MATERIALS Cost incurred during the month $ / No. of Equivalent Units Cost of Materials per unit $ CONVERSION COST Cost incurred during the month $ / No. of Equivalent Units Conversion cost per unit $ 127,355.00 Cost Accounted For : For Transferred Out : Beginning Inventory Direct Materials Conversion Cost Cost of Units Transferred Out $247,350.00 $ 513,926.00 22 $ 761,276.00 888,631.00 23 $ 24 25 631,778.00 45,127.00 14.00 26 Work in - Process : Direct Materials Conversion Cost Cost of Units Transferred Out $119,255.00 $117,852.00 27 $ 237,107.00 $ 1,125,738.00 28 29 Sheet26 Sheet27 Sheet28 Sheet29 Sheet30 Sheet31 Sheet32 Sheet33 Sheet34 Sheet35 Ready BO 100% 2:19 AM 23-Sep-20

FORMULA SHEET :

х 95 Process Costing - Microsoft Excel (Product Activation Failed) File Home Insert Page Layout Formulas Data Review View A1 А A B F G H 1 2 3 с D E T COMPANY WORKINGS AS PER WEIGHTED AVERAGE METHOD PRODUCTION COST REPORT 4 5 6 7 8 9 10 11 Beginning Inventory 127355 Cost incurred in Current Period 998383 Total Costs to account for =SUM(C5:06) Total Costs accounted for =+F52 *Difference due to rounding cost/unit =+C7-C8 Units Reconciliation Units to account for Beginning Work in Process 10870 Units started this period 43130 This units to account for =SUM(C12:013) Total units accounted for Completed and transferred out (Bal Fig) =+C18-C17 Ending Work in Process 14030 Total units accounted for =+C14 12 13 14 15 16 17 18 19 20 21 22 Equivalent Units of Production (EUP) Units % MATERIALS EUP - MATERIALS % CONVERSION EUP - CONVERSION Units Accounted For Transferred Out =+C16 1 =+C23*D23 1 =+C23*F23 Ending Work in Process =+C17 1 =+C24*D24 0.6 =+C24*F24 Total Units Accounted for ESUM(C23:C24) 1 ESUM(E23: E24) 1 =SUM(G23:624) 23 24 25 26 27 28 29 Sheet26 Sheet27 Sheet28 Sheet29 Sheet30 Sheet31 Sheet32 Sheet33 Sheet34 Sheet35 Ready BO 100% 2:20 AM 23-Sep-20

х 95 Process Costing - Microsoft Excel (Product Activation Failed) File Home Insert Formulas Data Review View Page Layout for A30 A A B с D E F G H MATERIALS CONVERSION COSTS Costs EUP 30 31 32 COSTS PER EUP 33 34 Cost of Beginning Work in Process 35 Cost incurred in Current Year 36 Total Costs 37 / Equivalent Units 38 Costs per Equivalent Unit of Production 39 40 TOTAL COSTS ACCOUNTED FOR: 41 42 Transferred Out EUP 43 Materials =+E23 44 Conversion Costs =+G23 45 Total Cost transferred out 105895 366605 =SUM(E34:E35) =+E25 =+E36/E37 Costs EUP 21460 631778 =SUM(G34:35) =+G25 =+G36/G37 Cost per EUP Total Cost =+E38 =++C43*D43 =+G38 =+C44*D44 =SUM(E43: E44) 46 47 48 E Ending Work in Process Materials =+E24 Conversion Costs =+G24 Total Costs of ending Work in Process =+E38 =+G38 =+C48*D48 =+C49*D49 49 =SUM(E48:E49) 50 51 52 Total Costs accounted for =+F45+F50 53 54 55 56 57 58 Sheet26 Sheet27 Sheet28 Sheet29 Sheet30 Sheet31 Sheet32 Sheet33 Sheet34 Sheet35 Ready BO" 100% - 2:20 AM 23-Sep-20

х 95 Process Costing - Microsoft Excel (Product Activation Failed) File Home Insert Formulas Data Review View v Page Layout foc A1 A B с F H 1 D E T COMPANY WORKINGS AS PER FIFO METHOD PRODUCTION COST REPORT 2 3 4 5 6 7 FOR CONVERSION COST % Completed Equivalent Units 0.3 =+C8*F8 8 9 10 Statement of Equivalent Unit % of Completion FOR MATERIALS Units Introduced Units % Completed Equivalent Units Beginning Inventory 10870 1 =+C8*D8 Total Units Introduced (Bal Fig) 43130 Units to Account for =SUM(C8:09) Further Processed & Transferred From Beginning Inventory =+C8 0 =+C12*D12 From Current Year Input 29100 1 =+C13*013 Ending Inventory 14030 1 =+C14*D14 Total Units Accounted for =+C10 1 =SUM(E12: E14) 11 12 13 =100%-F8 1 0.6 1 =+C12*F12 =+C13*F13 =+C14*F14 =SUM(G12:614) 14 15 16 17 18 19 20 Calculation of Cost per Unit : COST OF MATERIALS ($) Cost incurred during the month 366605 / No. of Equivalent Units =+E15 Cost of Materials per unit =+C19/020 CONVERSION COST Cost incurred during the month 631778 / No. of Equivalent Units =+G15 Conversion cost per unit =+C23/C24 Cost Accounted For : For Transferred Out : Beginning Inventory Direct Materials Conversion Cost Cost of Units Transferred Out 21 127355 =+E13*C21 =+(G13+G12) *C25 =SUM(F21:F22) =SUM(G20: G22) 22 23 24 25 26 Work - in - Process : Direct Materials Conversion Cost Cost of Units Transferred Out =+C21*E14 =+C25*G14 27 =SUM(F26:F27) =SUM(G23:G27) 28 29 KM Ready Sheet26 Sheet27 Sheet28 Sheet29 Sheet30 Sheet31 Sheet32 Sheet33 Sheet33 Sheet34 Sheet35 BOL 100% - 2:21 AM 23-Sep-20

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