11-48 Weighted-Average Method; Transferred-In Costs 1.

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11-48 Weighted-Average Method; Transferred-In Costs
1.
Whole
Equivalent Units
Units
Materials Conversion
4,000
100%
80%
15,000
19,000
16,000
Beginning WIP
Units started or Trans-in
TOTAL IN Process
Units Finished or Trans-out
Normal spoilage
Abnormal spoilage
Ending WIP
TOTAL OUT Process
3,000
19,000
EQUIVALENT UNITS: Weighted Average
Transferred In
19,000
Materials
18,700
Conversion
17,800
Cost Added:
Trans-in
Beginning WIP
Current Costs
Total
Cost per EU
90%
= finished units + spoiled units + % completion x Ending WIP
= finished units + spoiled units + % completion x Ending WIP
-----This Dept----Materials Conversion
57,800
141,700
199,500
$
60%
23,400
93,475
116,875
10.500 $
COST ASSIGNMENT - WEIGHTED AVERAGE
Finished Goods
16,000 units
Good production (@ $24.25)
Total
Ending WIP
3,000 units
Trans-in (3,000 x $10.50)
Materials (3,000 x .9 x $6.25)
Conversion (3,000 x . 6 x $7.50)
Total
Total Cost to Account For
6.250 $
23,360
110,140
133,500
Total
104,560
345,315
449,875
7.500 $ 24.250
388,000
31,500
16,875
13,500
61,875
449,875
2. On March 17, 2006, the exchange rate was $1 US = 970 South Korean
Won (KRW). The dollar had fallen from a rate of $1 US = 1,200 KRW three
years earlier.
Blocher,Stout,Cokins,Chen:Cost Management,4e 11-1
© The McGraw-Hill Companies, Inc., 2008
11-50 FIFO Method
1. Quantity Schedule (not required)
Input
Work-in-process inventory, 6/1
Units started
Total units to account for
15,000
80,000
95,000
Output
Units completed
Work-in-process inventory, 6/30
Total units accounted for
70,000
25,000
95,000
Equivalent Units -- FIFO Method:
Material A
Units completed
70,000
Work-in-process inventory, 6/30 25,000 x 100% = 25,000
Total
95,000
Less: EU in WIP inventory, 6/1 15,000 x 100% = (15,000)
Total equivalent units
80,000
Material B
Units completed
70,000
Work-in-process inventory, 6/30 25,000 x 100% = 25,000
Total
95,000
Less: EU in WIP inventory, 6/1 15,000 x 0% =
(
0)
Total equivalent units
95,000
Conversion:
Units completed
Work-in-process inventory, 6/30 25,000 x 65% =
Total
Less: EU in WIP inventory, 6/1 15,000 x 40% =
Total equivalent units
Blocher,Stout,Cokins,Chen:Cost Management,4e 11-2
70,000
16,250
86,250
( 6,000)
80,250
© The McGraw-Hill Companies, Inc., 2008
.
Problem 11-50 (Continued)
2. Costs per equivalent unit:
Costs
Material A Material B Conversion
Costs incurred in June
$260,000 $403,750 $461,437.50
Divided by EU
80,000
95,000
80,250
Unit cost
$3.25
$4.25
$5.75
3. Cost of units transferred out:
Work-in-process inventory, June 1
$ 85,437.50
Cost to finish beginning WIP:
Material B 15,000 x $4.25 =
$63,750
Conversion 15,000 x 60% x $5.75 = 51,750 115,500.00
Total
$200,937.50
Cost of units started and completed:
($3.25 + $4.25 + $5.75) x (70,000 - 15,000) = 728,750.00
Cost of units transferred out
$929,687.50
4. Cost of ending work-in-process inventory:
Material A $3.25 x 25,000 =
Material B $4.25 x 25,000 =
Conversion $5.75 x 16,250 =
Blocher,Stout,Cokins,Chen:Cost Management,4e 11-3
$ 81,250.00
106,250.00
93,437.50
$280,937.50
© The McGraw-Hill Companies, Inc., 2008
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