Question

Grace Corporation The following information is available for Grace Corporation for the current month: 120,000 units Started this month Beginning WIP (35% complete) Ending WIP (75% complete) Transferred out 10,000 units 000 8,800 units 121,200 units bour Beginning Work in Process Costs: Material Conversion o$24, 500 astan 66, 472 aup l Current Costs: Material fl belgnon od o $75, 600 136,730 Conversion All materials are added at the start of production. osallid vd Required: Refer to Grace Corporation in answering questions 1- 12. Awork o attat heo lor od re 1. How many units must be accounted for? 120,000+1,000130,000 What is the total cost to account for? 303,302 What are equivalent units for material using FIFO? 2. o a 3. What are equivalent units for conversion costs using FIFO? 4. 5. What is cost per equivalent unit for material using FIFO? 6. What is cost per equivalent unit for conversion costs using FIFO? What is the total cost assigned to goods transferred out using FIFO? 7. What are equivalent units for material using weighted average? 8. What are equivalent units for conversion costs using weighted average? 9. What is cost per equivalent unit for material using weighted average? 10. What is cost per equivalent unit for conversion costs using weighted average? 11. What is the total cost assigned to goods transferred out using weighted average? 12.

Answer 1

Solution Beginning Work in process units Ending Work in process units 10,000 8,800 Units started in production during this month 120,000 Units completed and transferred out (10,000 units 120,000 units 8,800 units) 121,200 Units started and completed during the month (121,200 units - 10,000 units) 111,200 To answer the questions under requirement 1 to 7, we shall prepare the Production Cost Report under FIFO assumption as below: Grace Corporation Production Cost Report (FIFO Method) Current Month Physical Units Equivalent Units Conversion Materials Units Units to account for: Beginning work-in process 10,000 120,000 Started in production during current month Total units to account for 130,000 Units accounted for Units completed and transferred out 10,000 111,200 From Beginning Inventory 0 6,500 Started and completed currently 111,200 111,200 Ending work-in process Total units accounted for 8,800 8,800 6,600 124,300 130,000 120,000 Total Costs Materials Conversion Costs to account for: $24,500 $75,600 $100,100 Costs in beginning work-in process Current period costs $90,972 $66,472 $136,730 $212,330 Total costs to be accounted for $203,202 $303,302 Costs per equivalent unit: Materials ($75,600/ 120,000 EUP) Conversion ($136,730 124,300 EUP) $0.63 $1.10 Costs accounted for Costs assigned to units transferred out $24,500 Costs from beginning WIP inventory $90,972 $66,472 Current costs added to complete beginning WIP $0 Inventory: Materials $7,150 Labor $7,150 Total costs from beginning inventory Current costs of units started and completed: $98,122 $70,056 $70,056 Materials Labor $122,320 $122,320 $192,376 $290,498 Total costs of units started and completed Total costs of units transferred out Costs assigned to ending WIP inventory: $5,544 $7,260 $5,544 Materials $7,260 Conversion $12,804 $303,302 Total ending wIP inventory Total costs accounted for $100,100 $203,202 Я

Required 1 Total units to be accounted for 130,000 Required 2 $303,302 Total costs to account for Required 3 Equivalents units for material using FIFO 120,000 Units Required 4 Equivalents units for conversion costs using FIFO 124,300 Units Required 5 Cost per equivalent unit for materials using FIFO $0.63 Required 6 Cost per equivalent unit for conversion using FIFO $1.10 Required 7 Total cost assigned to goods transferred out using FIFO $290,498 To answer the questions under requirement 8 to 12, we shall prepare the Production Cost Report under weighted average assumption as below:

Grace Corporation Production Cost Report (Weighted Average Method) Current Month Physical Equivalent Units Conversion Units Materials Units Units to account for 10,000 120,000 Beginning work-in process Started in production during current month Total units to account for 130,000 Units accounted for Units completed and transferred out Ending work-in process Total units accounted for 121,200 8,800 121,200 8,800 130,000 121,200 6,600 130,000 127,800 Total Costs Materials Conversion Costs to account for $24,500 $75,600 $100,100 Costs in beginning work-in process $90,972 $66,472 $212,330 $136,730 Current period costs Total costs to be accounted for $303,302 $203,202 Costs per equivalent unit Materials ($100,100 130,000 EUP) $0.77 Conversion ($203,202 / 127,800 EUP) $1.59 Costs accounted for: Costs assigned to units transferred out: Materials $93,324 $93,324 $192,708 Labor $192,708 Total costs of units transferred out Costs assigned to ending WIP inventory $286,032 $6,776 Materials $6,776 $10,494 $17,270 $303,302 Conversion $10,494 Total ending wIP inventory $100,100 Total costs accounted for $203,202 Required 8 Equivalents units for material using Weighted Avg. 130,000 Units Required 9 Equivalents units for conversion costs using Weighted Avg. 127,800 Units Required 10 Cost per equivalent unit for materials using Weighted Avg. $0.77 Required 11 Cost per equivalent unit for conversion using Weighted Avg. $1.59 Required 12 Total cost assigned to goods transferred out using Weighted Avg. $286,032

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A В C Е F 1 Solution 2 Beginning Work in process units 10000 4 8800 Ending Work in process units 5 Units started in production during this month 120000 6 Units completed and transferred out (10,000 units |Units started and completed during the month (121 -E3+E5- E4 7 -E6-E3 8 To answer the questions under requirement 1 to 7, we shall prepare the Production Cost Report under FIFO assumption as below: 10 11 Grace Corporation Production Cost Report (FIFO Method) 12 13 Current Month 14 Physical Equivalent Units 15 Conversion Units Materials Units Units to account for Beginning work-in process 16 -E3 E5 Started in production during current month 20 C18+C19 Total units to account for 21 Units accounted for 22 23 Units completed and transferred out -C24 ( 100-35) % -C25 100 % 24 0 From Beginning Inventory -E3 -E7 -E4 SUM(C23:C26 25 Started and completed currently Ending work-in process Total units accounted for -C25 100 % -C26 100 % -SUMID23:D26) 26 C26 75 % -SUME23:E26) 27 28 29 Conversion Total Costs Materials 30 Costs to account for: -SUM(D31:E31) -SUM(D32:E32) -SUM(C31:C32) 24500 Costs in beginning work-in process Current period costs Total costs to be accounted for 66472 136730 -SUM(E31:E32) 31 32 75600 SUM(D31:D32) 33 34 7898

А C E F Costs per equivalent unit: Materials ($75,600/120,000 EUP) Conversion ($136,730/124,300 EUP) 35 36 -D32/D27 37 -E32/E27 38 Costs accounted for 39 40 Costs assigned to units transferred out: -SUM(D41:E41) 41 Costs from beginning WIP inventory 24500 66472 Current costs added to complete beginning WIP 42 -E23 E37 Inventory: 43 Materials =SUM(D43:E43) -SUM (D44 : E44 ) -SUM(C41:C44) -D24 D36 -E24 E37 44 Labor 45 Total costs from beginning inventory 46 Current costs of units started and completed: -D25 D36 47 =SUM(D47:E47) =SUM(D48:E48) -SUM(C47:C48) C45+C49 Materials - E25*E37 48 Labor 49 Total costs of units started and completed 50 Total costs of units transferred out 51 Costs assigned to ending WIP inventory: 52 =SUM(D52:E52) -SUM(D53:E53) =SUM(C52:C53) ЕC50+C54 -D26 D36 Materials -E26 E37 53 Conversion 54 Total ending WIP inventory Total costs accounted for -SUME41:E54) -SUM(D41:D54) 55 56 Required 1 57 58 Total units to be accounted for 59 -C20 60 Required 2 61 62 63 Total costs to account for C33 64 Required 3 65 66 Equivalents units for material using FIFO Units 67 -D27 68

A F 69 Required 4 70 71 Equivalents units for conversion costs using FIFO -E27 Units 72 Required 5 73 74 75 =D36 Cost per equivalent unit for materials using FIFO 76 77 Required 6 78 79 E37 Cost per equivalent unit for conversion using FIFO 80 81 Required 7 82 83 Total cost assigned to goods transferred out using FIFO -CS0 84 To answer the questions under requirement 8 to 12, we shall prepare the Production Cost Report under weighted average assumption as below: 85 86 87 Grace Corporation Production Cost Report (Weighted Average Method) 88 89 Current Month 90 Physical Equivalent Units 91 Conversion Units Materials 92 Units Units to account for: 93 94 Beginning work-in process -E3 -E5 -C94+C95 95 Started in production during current month Total units to account for 96 97 98 Units accounted for: -D99 100 % C100 75% -SUM(E99:E100) 99 -E6 -E4 SUM(C99:C100) C99 100 % C100 100 % SUM(D99:D100) Units completed and transferred out 100 Ending work-in process Total units accounted for 101 102

C E F 103 Conversion Total Costs Materials 104 Costs to account for Costs in beginning work-in process Current period costs Total costs to be accounted for -SUM(D105:E105) 24500 -SUM(D106:E106) 75600 -SUM(C105:C106)SUMD105:D106) SUM(E105:E106) 66472 136730 105 106 107 108 109 Costs per equivalent unit Materials ($100,100/130,000 EUP) Conversion ($203,202/127,800 EUP) D107/D101 110 =E107/E101 111 112 113 Costs accounted for 114 Costs assigned to units transferred out: -SUM(D115:E115)D99 . D110 =SUMD116:E116) -SUM(C115:C116) 115 Materials -E99 E111 116 Labor 117 Total costs of units transferred out Costs assigned to ending WIP inventory: 118 119 -SUM(D119:E119)D100 D110 -SUM(D120:E120) -SUM(C119:C120) -C117+C121 Materials -E100 E111 120 Conversion 121 Total ending WIP inventory Total costs accounted for 122 -SUMID115:D121)SUME115:E121) 123 Required 8 124 125 Equivalents units for material using Weighted Avg.D101 127 Units 126 Required 9 128 129 130 Equivalents units for conversion costs using Weighted Avg. -E101 Units 131

В Е Required 10 133 134 135 136 132 Cost per equivalent unit for materials using Weighted Avg. -D110 Required 11 137 138 Cost per equivalent unit for conversion using Weighted Avg. -E111 139 140 Required 12 141 142 Total cost assigned to goods transferred out using Weighted Avg 143 %3С117