Question

Problem 4-47A Jessica Company manufactures hockey pucks and soccer balls. For both products, materials are added at the beginning of the production process and conversion costs are incurred evenly. Jessica uses the FIFO method to calculate equivalent units. Production and cost data for the month of August are as follows: Percent Complete 70% Units 520 1,500 650 30% $1,080 1,800 1,130 672 Production Data-Hockey pucks Work in process units, August 1 Units started into production Work in process units, August 31 Cost Data-Hockey pucks Work in process, August 1 Direct materials Direct labour Manufacturing overhead Production Data-Soccer balls Work in process units, August 1 Units started into production Work in process units, August 31 Cost Data-Soccer balls Work in process, August 1 Direct materials Direct labour Manufacturing overhead 90% 320 2,000 150 60% $420 3,200 1,050 1,711
Please show your work!

Answer 1

Ans.

1. The equivalent units of production for materials and conversion costs.

Hockey Pucks

1. Physical Units
Units to be accounted for	Hockey Pucks
Work-in-process units, August 1	520
Units started into production	1,500
Total units to be accounted for	2,020
Units accounted for
Work-in-process units, August 1	520
Units started and completed	850
Work-in-process units, August 31	650
Total units accounted for	2,020
Equivalent units - Materials	Physical Units	Material Added	Equivalent Units
Work-in-process units, August 1	520	0%	0
Units started and completed	850	100%	850
Work-in-process units, August 31	650	100%	650
Total	2,020		1,500
Equivalent units - Conversion	Physical Units	Conversion Added	Equivalent Units
Work-in-process units, August 1 (100% − 70%)	520	30%	156
Units started and completed	850	100%	850
Work-in-process units, August 31	650	30%	195
Total	2,020		1,201

Soccer Balls

1. Physical Units
Units to be accounted for	Soccer Balls
Work-in-process units, August 1	320
Units started into production	2,000
Total units to be accounted for	2,320
Units accounted for
Work-in-process units, August 1	320
Units started and completed	1,850
Work-in-process units, August 31	150
Total units accounted for	2,320
Equivalent units - Materials	Physical Units	Material Added	Equivalent Units
Work-in-process units, August 1	320	0%	0
Units started and completed	1,850	100%	1850
Work-in-process units, August 31	150	100%	150
Total	2,290		2,000
Equivalent units - Conversion	Physical Units	Conversion Added	Equivalent Units
Work-in-process units, August 1 (100% − 90%)	320	10%	32
Units started and completed	1,850	100%	1850
Work-in-process units, August 31	150	60%	90
Total	2,290		1,972

	Hockey pucks	Soccer balls
Materials	1500	2000
Conversion Cost	1201	1972

2. The unit costs of production for materials and conversion costs.

Hockey Pucks

Unit Costs	Material	Conversion
Cost added in August	$1,800	$1,802
Equivalent units	1,500	1,201
Unit costs	$1.20	$1.50

Soccer Balls

Unit Costs	Material	Conversion
Cost added in August	$3,200	$2,761
Equivalent units	2,000	1,972
Unit costs	$1.60	$1.40

Particulars	Hockey Pucks	Soccer Balls
Materials	$1.20	$1.60
Conversion costs	$1.50	$1.40

3.

The assignment of costs to units transferred out and to work in process at the end of the accounting period.

Hockey Pucks

Beginning WIP	Material	Conversion	Total
Beginning work in process	$10,800		$1,080
Costs added to beginning work in process
Material ($1.20 × 0 units)	$0		$0
Conversion ($1.50 × 156 units)		$234	$234
Started and completed
Material ($1.20 × 850 units)	$1,020		$1,020
Conversion ($1.50 × 850 units)		$1,275	$1,275
Ending work in process
Material ($1.20 × 650 units)	$780		$780
Conversion ($1.50 × 195 units)		$293	$293
Total costs			$4,682

Soccer Ball

Beginning WIP	Material	Conversion	Total
Beginning work in process	$420		$420
Costs added to beginning work in process
Material ($1.60 × 0 units)	$0		$0
Conversion ($1.40 × 32 units)		$                 44.80	$            44.80
Started and completed
Material ($1.6 × 1,850 units)	$2,960		$2,960
Conversion ($1.40 × 1,850 units)		$2,590	$2,590
Ending work in process
Material ($1.6 × 150 units)	$240		$240
Conversion ($1.4 × 90 units)		$126	$126
Total costs			$6,381

Particulars	Hockey Pucks	Soccer Balls
Beginning work in process	$1,080	$420
Complete beginning work in process	$234	$                 44.80
Started and completed	$2,295	$5,550
Ending work in process	$1,073	$366

JESSICA COMPANY
Production Cost Report—Hockey pucks
For the Month Ended August 31
	Physical Units	Equivalent Units
Quantities	Materials	Conversion Costs
Units to be accounted for
Work in process, August 1	520
Started into production	1500
Total units to be accounted for	2020
Units accounted for
Completed and transferred out
Work in Process , August 1	520	0	156
Started and completed	850	850	850
Work in process, August 31	650	650	195
Total units	2020	1500	1201
Costs
Unit costs
Costs in August		$1,800	$1,802
Equivalent units		1500	1201
Unit costs		$1.20	$1.50
Costs to be accounted for
Work in process, August 1			$1,080
Added into production ( 1800 + 1130 +672)			$3,602
Total costs			$4,682
Cost Reconciliation Schedule
Costs accounted for
Transferred Out
Work in Process , August 1		$1,080
Beginning Inventory Completed		$234
Started and Completed		$2,295	$3,609
Work in process, August 31
Material		$780
Conversion		$293	$1,073
Total Cost			$4,682