Question

Instructions

Hearty Soup Co. uses a process cost system

A type of cost system that accumulates costs for each of the various departments within a manufacturing facility.

to record the costs of processing soup, which requires the cooking and filling processes. Materials are entered from the cooking process at the beginning of the filling process. The inventory of Work in Process-Filling on April 1 and debits to the account during April 2016 were as follows:

Bal., 800 units, 30% completed:
Direct materials (800 × $4.30)	$3,440
Conversion (800 × 30% × $1.75)	420
	$3,860
From Cooking Department, 7,800 units	$34,320
Direct labor	8,562
Factory overhead	6,387

During April, 800 units in process on April 1 were completed, and of the 7,800 units entering the department, all were completed except 550 units that were 90% completed.

Charges to Work in Process-Filling for May were as follows:

From Cooking Department, 9,600 units	$44,160
Direct labor	12,042
Factory overhead	6,878

During May, the units in process at the beginning of the month were completed, and of the 9,600 units entering the department, all were completed except 300 units that were 35% completed.

	Required:
1.	(a) Enter the balance as of April 1, 2016, in a four-column account for Work in Process-Filling. Record the debits and the credits in the account for April. (b) Construct a cost of production report, and present computations for determining i. equivalent units of production The number of production units that could have been completed within a given accounting period, given the resources consumed. for materials and conversion. ii. costs per equivalent unit The rate used to allocate costs between completed and partially completed production. .* iii. cost of goods finished, differentiating between units started in the prior period and units started and finished in April.* iv. work in process inventory.* * If an amount is zero, enter "0". Round your cost per unit answers to the nearest cent.
2.	(a) Provide the same information for May by recording the May transactions in the four-column work in process account. (b) Construct a cost of production report, and present the May computations (i through iv) listed in part 1(b).
3.	Comment on the change in costs per equivalent unit for March through May for direct materials and conversion costs.

none

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Work in Process-Filling Account

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1(a).	Enter the balance as of April 1, 2016, in a four-column account for Work in Process-Filling. Record the debits and the credits in the account for April.
2(a).	Provide the same information for May by recording the May transactions in the four-column work in process account.

Question not attempted.

Score: 59/95

Work in Process-Filling

1	Date	Item	Debit	Credit	Balance Dr.	Balance Cr.
2	Apr. 1	Balance			✔
3	30	Cooking Department	✔		✔
4	30	Direct labor	✔		✔
5	30	Factory overhead	✔		✔
6	30	Finished goods
7	30	Balance
8	May 31	Cooking Department	✔
9	31	Direct labor	✔
10	31	Factory overhead	✔
11	31	Finished goods
12	31	Balance

Solution

Work in Process-Filling

1	Date	Item	Debit	Credit	Balance Dr.	Balance Cr.
2	Apr. 1	Balance
3	30	Cooking Department
4	30	Direct labor
5	30	Factory overhead
6	30	Finished goods
7	30	Balance
8	May 31	Cooking Department
9	31	Direct labor
10	31	Factory overhead
11	31	Finished goods
12	31	Balance

Points:

0.62 / 1

Feedback

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1(a) and 2(a). Credit amounts are determined from the supporting cost of production reports.

none

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Cost of Production Report - April

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1(b).

Construct a cost of production report, and present computations for determining i. equivalent units of production for materials and conversion. ii. costs per equivalent unit.* iii. cost of goods finished, differentiating between units started in the prior period and units started and finished in April.* iv. work in process inventory.* * If an amount is zero, enter "0". Round your cost per unit answers to the nearest cent.

HEARTY SOUP CO.
Cost of Production Report-Filling Department
For the Month Ended April 30, 2016
UNITS	Whole Units	Equivalent Units
		Direct Materials	Conversion
Units to account for during production:
Inventory in process, April 1
Received from Milling Department
Total units accounted for by the Filling Department
Units to be assigned costs:
Inventory in process, April 1 (30% completed)
Started and completed in April
Transferred to finished goods in April
Inventory in process, April 30 (90% completed)
Total units to be assigned costs

Points:

0 / 1

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1(b). Calculate equivalent units for materials and conversion costs.

Explanation

COSTS	Costs
	Direct Materials	Conversion	Total
Cost per equivalent unit:
Total production costs for April in Filling Department
Total equivalent units	÷	÷
Cost per equivalent unit
Costs assigned to production:
Inventory in process, April 1
Costs incurred in April
Total costs accounted for by the Filling Department
Cost allocated to completed and
partially completed units:
Inventory in process, April 1 balance
To complete inventory in process, April 1
Cost of completed April 1 work in process
Started and completed in April
Transferred to finished goods in April
Inventory in process, April 30
Total costs assigned by the Filling Department

Points:

0 / 1

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1(b). Calculate the cost per equivalent unit for materials and conversion costs. Calculate the costs assigned to the beginning inventory, the units started and completed, and the ending inventory.

Explanation

none

X

Cost of Production Report - May

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2(b).

Construct a cost of production report, and present computations for determining i. equivalent units of production for materials and conversion ii. costs per equivalent unit* iii. cost of goods finished, differentiating between units started in the prior period and units started and finished in April* iv. work in process inventory.* * If an amount is zero, enter "0". Round your cost per unit answers to the nearest cent.

HEARTY SOUP CO.
Cost of Production Report-Filling Department
For the Month Ended May 31, 2016
UNITS	Whole Units	Equivalent Units
		Direct Materials	Conversion
Units charged to production:
Inventory in process, May 1
Received from Milling Department
Total units accounted for by the Filling Department
Units to be assigned costs:
Inventory in process, May 1 (90% completed)
Started and completed in May
Transferred to finished goods in May
Inventory in process, May 31 (35% completed)
Total units to be assigned costs

Points:

0 / 1

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2(b). Calculate equivalent units for materials and conversion costs.

Explanation

COSTS	Costs
	Direct Materials	Conversion	Total
Costs per equivalent unit:
Total costs for May in Filling Department
Total equivalent units	÷	÷
Cost per equivalent unit
Costs assigned to production:
Inventory in process, May 1
Costs incurred in May
Total costs accounted for by the Filling Department
Costs allocated to completed and
partially completed units:
Inventory in process, May 1 balance
To complete inventory in process, May 1
Cost of completed May 1 work in process
Started and completed in May
Transferred to finished goods in May
Inventory in process, May 31
Total costs assigned by the Filling Department

Points:

0 / 1

Feedback

Check My Work

2(b). Calculate the cost per equivalent unit for materials and conversion costs. Calculate the costs assigned to the beginning inventory, the units started and completed, and the ending inventory.

Explanation

none

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Final Question

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The cost per equivalent unit for direct materials selector 1

decreased

increased

from March to May. The cost per equivalent unit for conversion costs selector 2

increased

decreased

from March to May. These changes selector 3

should

need not

be investigated for their underlying causes, and any necessary corrective actions should be taken.

Answer 1

1a)

Work in Process-Filling Department ACCOUNT NO BALANCE DEBIT ACCOUNT DATE Apr. 1 Apr. 30 Apr. 30 Apr. 30 Apr. 30 Apr. 30 CREDIT CREDIT ITEM Bal., 800 units, 30% completed: Cooking Dept., 7,800 units at $4.4 Direct labor Factory overhead Finished goods Bal., 550 units, 90% completed POST. REF DEBIT 3860 34320 8562 6387 3860 38180 46742 53129 3311 3311 49818

1b)

Hearty Soup Co Cost of Production Report-Filling Department For the Month Ended April 30, 2014 Whole Units Equivalent Units Direct Materials (a) Conversion (a) Units Units charged to production Inventory in process, April 1 Received from Cooking Department Total units accounted for by the Filling Department Units to be assigned costs: Inventory in process, April 1 Started and completed in April Transferred to finished goods in April Inventory in process, April 30 Total units to be assigned c 800 7800 8600 800 7250 8050 550 8600 0 7250 7250 550 7800 560 7250 7810 495 8305 osts Costs Direct Materials Costs Costs per equivalent unit: Total costs for April in Filling Department Total equivalent units Cost per equivalent unit (b) Costs charged to production: Inventory in process, April 1 Costs incurred in April Total costs accounted for by the Filling Department Cost allocated to completed and partially completed units Inventory in process, April 1 balance (c) To complete inventory in process, April 1 (c) Cost of completed April 1 work in process Started and completed in April (c) Transferred to finished goods in April (c) Inventory in process, April 30 (d) Total costs assigned by the Filling Department Conversion Total Costs 34320 7800 4.40 14949 8305 1.80 49269 3860 49269 53129 3860 1008 4868 44950 49818 3311 53129 1008 31900 13050 2420 891

2a)

2B)

3)

Hearty Soup Co Cost of Production Report-Filling Department For the Month Ended May 31, 2014 Whole Units Equivalent Units Direct Materials (a) Conversion (a) Units Units charged to production Inventory in process, May 1 Received from Cooking Department Total units accounted for by the Filling Department Units to be assigned costs: Inventory in process, May 1 Started and completed in May Transferred to finished goods in May Inventory in process, May 31 Total units to be assigned c 550 9600 10150 550 9300 9850 300 10150 0 9300 9300 300 9600 9300 9355 105 9460 osts Costs Direct Materials Costs Costs per equivalent unit: Total costs for May in Filling Department Total equivalent units Cost per equivalent unit (b) Costs charged to production: Inventory in process, May 1 Costs incurred in May Total costs accounted for by the Filling Department Cost allocated to completed and partially completed units Inventory in process, May 1 balance (c) To complete inventory in process, May 1 (c) Cost of completed May 1 work in process Stated and completed in May (c) Transferred to finished goods in May () Inventory in process, May 31 (d) Total costs assigned by the Filling Department Conversion Total Costs 44160 9600 4.60 18920 9460 2.00 63080 3311 63080 66391 3311 110 3421 61380 64801 1590 66391 110 42780 18600 1380 210

The cost per equivalent unit for direct materials increased from March to May. The cost per equivalent unit for conversion costs increased from March to May. These changes should be investigated for their underlying causes, and any necessary corrective actions should be taken.