Question

Chapter 16 Process Costing and Analysis A production department in a process manufacturing system completed its work on 80,000 units of product and transferred them to the next department during a recent period. Of these units, 24,000 were in process W at the beginning of the period. The other 56,000 units were started and completed during the period. At C period-end, 16,000 units were in process. Compute the production department's equivalent units of produc- C tion for direct materials under each of three separate assumptions using the weighted-average method: 1. All direct materials are added to products when processing begins. Beginning inventory is 40% complete as to materials and conversion costs. Ending inventory is 75% complete as to materials and conversion costs. 3. Beginning inventory is 60% complete as to materials and 40% complete as to conversion costs. Ending inventory is 30% complete as to materials and 60% complete as to conversion costs. Refer to the information in Exercise 16-4 and complete the requirements for each of the three separate as- umptions using the FIFO method for process costing. ny has two manufacturing departments, Forming and Painting. The company uses the Exercis Companyh Felds d.average method of process costing. At the beginning of the month, the Forming department has weighted-average 25,000 units in inve beginning sion costs ring the month, the Forming department started 300,000 units. At the end of the month, the Forming ent had 30,000 units in ending inventory, 80% complete as to materials and 30% complete as to conversion. Units completed in the Forming department are transferred to the Painting department. Cost information for the Forming department follows ntry, 60% complete as to materials and 40% complete as to conversion costs. inventory cost of $60,100 consisted of $44,800 of direct materials costs and $15,300 of conver- essign Weights The Cost pe 03 Beginning work in process inventory. Direct materials added during the month. Conversion added during the month 60,100 1,231,200 896,700 1. Calculate the equivalent units of production for the Forming department 2. Calculate the costs per equivalent unit of production for the Forming department. Using the weighted-average method, assign costs to the Forming department's output-specifically, is units transferred to Painting and its ending work in process inventory FIF0 method of process costing has two manufacturing departments, Forming and Painting. The company uses of process costing. At the beginning of the month, the Forming department company uses theWeighted Fields Co eineinventory, 60% complete as to materials and 40% complete as to conversion costs. The 50 inventory cost of S60,100 consisted of $44,800 of direct materials costs and $15,300 of conver- assigned Exercise 1 has Weighted a Cost peE ginning si st.te month, the Forming department started 300,000 units. At the end of the month, the Forming son costs C3 pringt had 30,000 units in ending inventory, 80% complete as to materials and 30% complete as to epartment Trnits completed in the Forming department are transferred to the Painting department afrmation for the Forming department follows. Cost info Beginning work in process inventory Direct materials added during the month.............. 1,231,200 Conversion added during the month 896,700 … 1. Calculate the equivalent units of production for the Forming department. Calculate the costs per equivalent unit of production for the Forming department. Using the weighted-average method, assign costs to the Forming department's output-specifically its units transferred to Painting and its ending work in process inventory

Answer 1

UNITS	Whole Units	Equivalent Units
		Direct Materials
Units charged to production:
Inventory in process, Beginning	24,000	24,000
Units started	72,000	72,000
Total units accounted for	96,000	96,000
Assumption 1
Units to be assigned costs:		%material	Equivalent units
Beginning Work In process	24,000	0	0
Units started and completed	56,000	100	56,000
Ending Work In process -units	16,000	100	16,000
Total units	96,000		72000
assumption 2
Units to be assigned costs:		%material	Equivalent units
Beginning Work In process	24,000	60	14400
Units started and completed	56,000	100	56,000
Ending Work In process -units	16,000	75	12,000
Total units	96,000		82400
assumption 3
Units to be assigned costs:		%material	Equivalent units
Beginning Work In process	24,000	40	9600
Units started and completed	56,000	100	56,000
Ending Work In process -units	16,000	30	4,800
Total units	96,000		70400

Department 1-weighted average method
ProductionDepartment			Equivalent Units
Flow Of Units	Physical Units	Transferred In	Direct material	Conversion Cost
Units to be accounted for
Beginning work in process inventory	25000
Units started this period	300000
Total u nits to be accounted for	325000
Units accounnted for:
Units completed (b)	295000		295000	295000
Ending work in progress inventory c (80% material and 30% conversion)	30000		24000	9000
Total units to be accounted for (f)	325000		319000	304000
Flow of Cost
Cost in the begnning work in progress inventory	60100		44800	15300
cost added to process	2127900		$12,31,200	$8,96,700
Total Cost to be accounted for (e)	2188000		1276000	912000
Cost per equivalent unit (a)	7.00		4.00	3.00
Cost accounted for
Cost assigned to units transferred out (a*b)	2065000		1180000	885000
Cost in ending work in progress inventory (a*c)	123000		96000	27000
Total Cost accounted for	2188000		1276000	912000
Ans 1
	Direct material	Conversion Cost	Total
Equivalent units	319000	304000
ans 2
Cost per equivalent unit	4.00	3.00
ans 3
Cost assigned to units transferred out (a*b)	1180000	885000	2065000
Cost in ending work in progress inventory (a*c)	96000	27000	123000