Question

1.)Four Seasons Company makes snow blowers. 100% of the materials are added at the beginning of the process. This means that beginning and ending inventories are 100% complete with respect to DM. The conversion costs are uniformly incurred.

The physical units in beginning inventory are 30% complete with respect to conversion costs and the ending inventory is 70% complete with respect to conversion costs.

Normal spoilage is 10% of units transferred out

Other data for the month include:

Beginning WIP inventory = 190 physical units

Units started = 280 units

Units transferred out = 240 units

Units in ending inv. 180 units

Conversion costs added during the month $200,000

Cost of direct materials added $213,000

Beginning work-in-process costs: Materials $132,000      Conversion $127,000

Using the weighted average method and including spoilage, what is the cost per eu for conversion costs?

2.)

Four Seasons Company makes snow blowers. 100% of the materials are added at the beginning of the process. This means that beginning and ending inventories are 100% complete with respect to DM. The conversion costs are uniformly incurred.

The physical units in beginning inventory are 20% complete with respect to conversion costs and the ending inventory is 60% complete with respect to conversion costs.

Normal spoilage is 10% of units transferred out

Other data for the month include:

Beginning WIP inventory = 190 physical units

Units started = 280 units

Units transferred out = 250 units

Units in ending inv. 190 units

Conversion costs added during the month $205,000

Cost of direct materials added $227,000

Beginning work-in-process costs: Materials $137,000      Conversion $131,000

Using the weighted average method and including spoilage, how much conversion costs is transferred out of the department?

3.)

Four Seasons Company makes snow blowers. 100% of the materials are added at the beginning of the process. This means that beginning and ending inventories are 100% complete with respect to DM. The conversion costs are uniformly incurred.

The physical units in beginning inventory are 40% complete with respect to conversion costs and the ending inventory is 10% complete with respect to conversion costs.

Normal spoilage is 10% of units transferred out

Other data for the month include:

Beginning WIP inventory = 210 physical units

Units started = 270 units

Units transferred out = 250 units

Units in ending inv. 150 units

Conversion costs added during the month $200,000

Cost of direct materials added $217,000

Beginning work-in-process costs: Materials $120,000      Conversion $130,000

Using the weighted average method and including spoilage, how much conversion costs is recorded as abnormal spoilage?

Answer 1

1.

Beggining units	190	Transferred out	240
Started intro production	280	Normal spoilage	24
		Abnormal spoilage	26
		Ending units	180
	470		470
Equivalent units	Material	Conversion
Units transferred                                            A	240	240
Abnormal spoilage	26	26
Ending Units	180	180
Completion	100%	70%
B	180	126
Total units	446	392
Cost per equivalent units
Particulars	Material	Conversion cost	total
As at beginning	132000	127000	259000
Added during the month	213000	200000	413000
Cost to be accounted for	345000	327000	672000
Total eqivalent units	446	392
Cost per equivalent unit	773.54	834.18	1607.73
Cost per equivalent unit = Cost to be accounted for / Total equivalent units

	Cost of ending work in progress
			Conversion cost
	Particulars	Material		Total
	Ending units	180	180	180
	Cost per equivalent units	773.54	834.18	1607.73
	Completion	100%	70%
	Total cost	139238	105107	244345
	Cost of goods transferred		Conversion cost
	Particulars	Material		Total
	Number of units	240	240
	Cost per equivalent units	773.54	834.18
	Total amount	185650	200204	385854
	Abnormal loss		Conversion cost
Add	Particulars	Material		Total
	Number of units	26	26
	Cost per equivalent units	773.54	834.18
	Total amount	20112	21689	41801