Exercise 17-24, 25, 26 (14th edition)
Given:
Tomlinson Corporation is a biotech company based in Milpitas. It makes a cancer-treatment drug in a single processi
department . Direct materials are added at the start of the process. Conversion costs are added evenly during the pr
Tomlinson Corporation uses the weighted-average method of process costing. The following information for July 201
available.
Equivalent Units
Physical
Direct
Conversion
Units
Materials
Costs
Work-in-process, July 1 (DM -- 100%; CC -- 25%)
8,700
8,700
2,175
Started during July
34,500
Completed and transferred out during July
32,000
32,000
32,000
Work-in-process, July 31 (DM -- 100%; CC -- 70%)
11,200
11,200
7,840
Total Costs for July 2014
Work in process, beginning
Direct materials
Conversion costs
Direct materials added during July
Conversion costs added during July
Total costs to account for
$61,500
43,200
$104,700
301,380
498,624
$904,704
Exercise 17-24 Weighted-average Method, assigning costs
Required:
1. Calculate cost per equivalent unit for direct materials and conversion costs.
2. Summarize the total costs to account for, and assign total costs to units completed (and transferred out) and to un
Exercise 17-25
1. Do Exercise 17-24 using the Fifo method.
2. Tomlinson's management seeks to have a more consistent cost per equivalent. Which method of process costing
company choose and why?
W/A because the cost of the BI is mixed together with the costs added each per
Exercise 17-26 (14th edition)
Refer to the information in Exercise 17-24. Suppose Tomlinson determines standard cost of $8.60 per equivalent unit
materials and $13.50 per equivalent unit for conversion costs for both beginning work in process and work done in th
period.
Tomlinson Corporation
Equivalent Units
Tomlinson Corporation Cost of Production Report
Physical Flow
D/M
Degree of Completion
Added
Beginning
Evenly
Units to Account for:
D/M
Conversion
BWIP (7/1/14)
100%
25%
8,700
Started during July
34,500
Total
43,200
Units Accounted for:
Work Done This Period
Completed Units
32,000
From BWIP
0%
75%
8,700
0
Started And Completed
100%
100%
23,300
23,300
EWIP
100%
70%
11,200
11,200
Total
43,200
Calculation of Equivalent Units
FIFO Equivalent Units
Plus BWIP EU from previous period
Weighted Average Equivalent Units
Costs to Account for:
BWIP
Current Costs Added This Period
Total
Cost per Equivalent Unit:
FIFO
Weighted Average
Standard Cost
Costs Accounted for: Fifo Method
Costs Associated with Completed Units
From BWIP
Costs Assigned to BWIP
D/M
Conversion Costs
Total
From Units Started & Completed
Total Cost Associated with Units Transferred-out
Cost Assigned to EWIP Units
D/M Costs
Conversion Costs
Total Cost Assigned to EWIP
Total Costs Accounted for
Costs Accounted for: Weighted Average Method
Costs Associated with Completed Units
Cost Assigned to EWIP Units
D/M Costs
Conversion Costs
Total
Total Costs Accounted for
Costs Accounted for: Standard Cost Method
Costs Associated with Completed Units
From BWIP
Costs Assigned to BWIP (assuming same std. costs values)
D/M
Conversion Costs
Total
From Units Started & Completed
Total Cost Associated with Units Transferred-out
Cost Assigned to EWIP Units
D/M Costs
Conversion Costs
Total Cost Assigned to EWIP
Total Standard Costs Accounted for
Standard Cost Variances
(A)
(B)
34,500
8,700
43,200
(1)
(2)
D/M
$61,500
301,380
$362,880
(1) / (A)
(2) / (B)
$8.736
$8.400
$8.600
$61,500
$0
$61,500
$203,541
$265,041
$97,839
$97,839
$362,880
32,000
$268,800
$94,080
$94,080
$362,880
$74,820
$0
$74,820
$200,380
$275,200
$96,320
$96,320
$371,520
Associated with BWIP and recognized last time period (favorable)
Associated with current period (favorable)
Total cost accounted for
(13,320)
4,680
$362,880
Journal Entries for FIFO, W/A, and Standard Cost Methods
Work-in-Process
DM Variances
Direct Materials Inventory
To record direct material usage.
Fifo Method
Dr
Cr
301,380
301,380
Work-in-Process
Conversion Variances
Various Accounts
To record direct labor and MOH usage.
498,624
Finished Goods
Work-in-Process
To record the transfer production costs of completed
units to finished goods.
703,076
498,624
703,076
FIFO
WIP
104,700
301,380
498,624
201,628
703,076
nt drug in a single processing
added evenly during the process.
ng information for July 2014 is
Started & Completed
23,300
23,300
d transferred out) and to units in EWIP.
method of process costing should the
h the costs added each period.
of $8.60 per equivalent unit for direct
rocess and work done in the current
Tomlinson Corporation
Equivalent Units
Conversion
6,525 B
23,300 C
7,840 D
37,665 B+C+D
2,175 A
39,840 A+B+C+D
Conversion
$43,200
498,624
$541,824
$13.238
$13.600
$13.500
$43,200
Total
$104,700 A
800,004 B,C,D
$904,704 A,B,C,D
$21.974
$22.000
$22.100
$86,381
$129,581
$308,455
$438,035
$104,700 A
$0 B
$86,381 B
$191,081
$21.963
$511,995
$21.974
$703,076
$21.971
$103,789
$103,789
$541,824
$97,839
$103,789
$201,628
$904,704
$435,200
$704,000
$106,624
$106,624
$541,824
$94,080
$106,624
$200,704
$904,704
$29,363
$88,088
$117,450
$314,550
$432,000
$104,183
$0
$88,088
$192,270
$514,930
$707,200
$105,840
$105,840
$537,840
$96,320
$105,840
$202,160
$909,360
$22.00
$704,000
$22.10
$22.10
$22.10
$192,270
$514,930
$707,200
$275,200
$432,000
$707,200
13,838
(9,854)
$541,824
518
(5,174)
$904,704
Weighted Average Method
Dr
Cr
301,380
Standard Cost Method
Dr
Cr
296,700
4,680
301,380
301,380
$296,700
508,478
$508,478
498,624
9,854
498,624
498,624
704,000
707,200
704,000
707,200
Weighted Average
WIP
104,700
301,380
704,000
498,624
200,704
Std. Cost
WIP
104,183
296,700
707,200
508,478
202,160
Exercise 17-26
Given:
Tomlinson Corporation is a biotech company based in Milpitas. It makes a cancer-treatment drug in a single processi
department . Direct materials are added at the start of the process. Conversion costs are added evenly during the pr
Tomlinson Corporation uses the weighted-average method of process costing. The following information for July 201
available.
Equivalent Units
Physical
Direct
Conversion
Units
Materials
Costs
Work-in-process, July 1 (DM -- 100%; CC -- 25%)
8,700
8,700
2,175
Started during July
34,500
Completed and transferred out during July
32,000
32,000
32,000
Work-in-process, July 31 (DM -- 100%; CC -- 70%)
11,200
11,200
7,840
Total Costs for July 2011
Work in process, beginning
Direct materials
Conversion costs
Direct materials added during July
Conversion costs added during July
Total costs to account for
$61,500
43,200
$104,700
301,380
498,624
$904,704
Required:
Refer to the information in Exercise 17-24. Suppose Tomlinson determines standard cost of $8.60 per equivalent unit
materials and $13.50 per equivalent unit for conversion costs for both beginning work in process and work done in th
period.
Tomlinson Corporation
Equivalent Units
Tomlinson Corporation Cost of Production Report
Physical Flow
D/M
Degree of Completion
Added
Beginning
Evenly
Units to Account for:
D/M
Conversion
BWIP (7/1/14)
100%
25%
8,700
Started during July
34,500
Total
43,200
Units Accounted for:
Completed Units
32,000
From BWIP
0%
75%
8,700
0
Started And Completed
100%
100%
23,300
23,300
EWIP
100%
70%
11,200
11,200
Total
43,200
Calculation of Equivalent Units
FIFO Equivalent Units
34,500
Plus BWIP EU from previous period
8,700
Weighted Average Equivalent Units
43,200
Costs to Account for:
BWIP
Standard Costs Added This Period
D/M
$74,820
296,700
Total
Standard Cost per Equivalent Unit:
Costs Accounted for: Standard Cost Method
Costs Associated with Completed Units
From BWIP
Costs Assigned to BWIP (assuming same std. costs values)
D/M
Conversion Costs
Total
From Units Started & Completed
Total Cost Associated with Units Transferred-out
Total Cost Associated with Units Transferred-out
Cost Assigned to EWIP Units
D/M Costs
Conversion Costs
Total Cost Assigned to EWIP
Total Standard Costs Accounted for
2. Calculate the Standard Cost Variances
Associated with BWIP and recognized last time period
Actual costs assigned to BWIP under FIFO and weighted average methods
Standard Costs assigned to BWIP (assuming standards have not changed)
Total standard cost variances recognized in previous period (favorable)
Associated with current period (unfavorable)
Actual costs assigned this period
Standard costs assigned to production this period
Total standard cost variances recognized this period (favorable)
$371,520
$8.600
$8.600
$8.600
$74,820
$0
$74,820
$200,380
$275,200
$275,200
$96,320
$96,320
$371,520
D/M
$61,500
74,820
($13,320)
$301,380
296,700
$4,680
Journal Entries for Standard Cost Method:
Work-in-Process
DM Variances
Direct Materials Inventory
To record direct material usage.
Standard Cost Method
Dr
296,700
4,680
Work-in-Process
Conversion Variances
Various Accounts
To record direct labor and MOH usage.
508,478
Finished Goods
Work-in-Process
To record the transfer production costs of completed
units to finished goods.
707,200
Standard Cost Method
WIP
104,183
296,700
508,478
202,160
drug in a single processing
ded evenly during the process.
g information for July 2014 is
Started & Completed
23,300
23,300
$8.60 per equivalent unit for direct
cess and work done in the current
Tomlinson Corporation
Equivalent Units
Conversion
6,525 b
23,300 c
7,840 d
37,665 b+c+d
2,175 a
39,840 a+b+c+d
Conversion
$29,363
508,478
Total
$104,183
805,178
$537,840
$13.500
$13.500
$13.500
$909,360
$22.100
$29,363
$88,088
$117,450
$314,550
$432,000
$432,000
$104,183
$0
$88,088
$192,270
$514,930
$707,200
$707,200
$105,840
$105,840
$537,840
$96,320
$105,840
$202,160
$909,360
Conversion
Total
$43,200
29,363
$13,838
$104,700
104,183
$518
$498,624
508,478
($9,854)
$800,004
805,178
($5,174)
Standard Cost Method
Cr
$296,700
$296,700
301,380
$508,478
$508,478
9,854
498,624
707,200
Standard Cost Method
$22.10
$22.10
$22.10
WIP
707,200
Problem 17- 38 Modified (Transferred-in costs, weighted-average method)
Given:
Publishers, Inc., has two departments: printing and binding. Each department has one direct-cost category (DM) and
indirect-cost category (conversion costs). This problem focuses on the binding department. Books that have underg
the printing process are immediately transferred to the binding department. Direct material is added when the binding
process is 70% complete. Conversion costs are added evenly during binding operations. When those operations are
the books are immediately transferred to finished goods. Publishers, Inc., uses the weighted average method of proc
costing. The following is a summary of the April, 2014 operations of the binding department.
When are costs incurred
Beginning work-in-process inventory
Transferred in during April from printing
Completed and T/O during April
Ending work-in-process April 30
Total costs added during April
Degree of Completion
Trans-in
D/M
Conversion
70%
Uniformly
Beginning
100%
0%
60%
100%
100%
100%
100%
Physical Units
(Cases)
1,260
2,880
3,240
900
100%
75%
Required:
1. Using the weighted-average method, summarize the total Drying and Packaging Department costs for week 37, and
total costs to units completed (and transferred out) and to units in ending work-in-process inventory.
Binding Department Cost of Production Report: April 2014 (WA)
Physical Flow
Degree of Completion
Units to Account for:
Trans-in
D/M
Conversion
BWIP
100%
0%
60%
1,260
Transferred-in from printing during April
2,880
Total
4,140
Units Accounted for:
Units completed
3,240
1,980
From BWIP
1,980
0%
100%
40%
1,260
Started And Completed
100%
100%
100%
1,980
EWIP
100%
100%
75%
900
Total
4,140
Calculation of Equivalent Units
FIFO Equivalent Units
(A)
Plus BWIP EU from previous period
Weighted Average Equivalent Units
(B)
Costs to Account for:
BWIP
Current Costs Added This Period
Total
Cost per Equivalent Unit:
Weighted Average
Costs Accounted for: Weighted Average Method
Costs Associated with Completed Units
Cost Assigned to EWIP Units
(1)
(2)
(2) / (B)
Transferred-in Costs
D/M Costs
Conversion Costs
Total
Total Costs Accounted for
Journal Entries
Work-in-Process -- Binding Department
Work-in-Process -- Printing Department
To record the transfer of partially completed units from
the Printing Department to the Binding Department.
Weighted Average Method
Dr
155,520
Cr
155,520
Work-in-Process -- Binding Department
Direct Materials Inventory
To record direct material usage during April
28,188
Work-in-Process -- Binding Department
Various Accounts
To record conversion costs during April
84,240
Finished Goods Inventory
Work-in-Process -- Binding Department
To record the transfer of finished units to
finishing goods inventory.
257,612
28,188
84,240
257,612
Weighted Average
WIP - Binding
55,440.00
155,520.00
28,188.00
84,240.00
65,776.10
257,611.90
ect-cost category (DM) and one
nt. Books that have undergone
l is added when the binding
When those operations are done,
ed average method of process
Trans-in
Costs
Direct
Material
Conversion
Costs
$39,060
$0
$16,380
$155,520
$28,188
$84,240
ment costs for week 37, and assign
ess inventory.
Trans-in
Equivalent Units
D/M
Conversion
0
1,980
900
1,260
1,980
900
504 b
1,980 c
675 d
2,880
1,260
4,140
4,140
0
4,140
3,159 b,c,d
756 a
3,915 a,b,c,d
Trans-in
$39,060.00
$155,520.00
$194,580.00
D/M
$0.00
$28,188.00
$28,188.00
Conversion
$16,380.00
$84,240.00
$100,620.00
$47.0000
$6.8087
$25.7011
$79.5098
$152,280.00
$22,060.17
$83,271.72
$257,611.90
Total
$55,440.00 a
$267,948.00 b,c,d
$323,388.00 a.b.c.d
$257,612
$42,300.00
$6,127.83
$42,300.00
$194,580.00
$6,127.83
$28,188.00
$17,348.28
$17,348.28
$100,620.00
$42,300.00
$6,127.83
$17,348.28
$65,776.10
$323,388.00
Problem 17- 39 Modified (Transferred-in costs, FIFO method)
Given:
Publishers, Inc., has two departments: printing and binding. Each department has one direct-cost category (DM) and
indirect-cost category (conversion costs). This problem focuses on the binding department. Books that have undergo
the printing process are immediately transferred to the binding department. Direct material is added when the binding
process is 70% complete. Conversion costs are added evenly during binding operations. When those operations are
the books are immediately transferred to finished goods. Publishers, Inc., uses the FIFO method of process costing.
The following is a summary of the April, 2014 operations of the binding department.
When are costs incurred
Beginning work-in-process inventory
Transferred in during April from printing
Completed and T/O during April
Ending work-in-process April 30
Total costs added during April
Degree of Completion
Physical Units
Trans-in
D/M
Conversion
(Cases)
70%
Uniformly
Beginning
100%
0%
60%
1,260
2,880
100%
100%
100%
3,240
100%
100%
75%
900
Required:
1. Using the weighted-average method, summarize the total Drying and Packaging Department costs for week 37, and
total costs to units completed (and transferred out) and to units in ending work-in-process inventory.
Binding Department Cost of Production Report: April 2014 (FIFO)
Physical Flow
Degree of Completion
Units to Account for:
Trans-in
D/M
Conversion
BWIP
100%
0%
60%
1,260
Transferred-in from printing during April
2,880
Total
4,140
Units Accounted for:
Units completed
3,240
1,980
From BWIP
1,980
0%
100%
40%
1,260
Started And Completed
100%
100%
100%
1,980
EWIP
100%
100%
75%
900
Total
4,140
Calculation of Equivalent Units
FIFO Equivalent Units
(A)
Plus BWIP EU from previous period
Weighted Average Equivalent Units
(B)
Costs to Account for:
BWIP
Current Costs Added This Period
Total
Cost per Equivalent Unit:
FIFO
Costs Accounted for: FIFO
Costs Associated with Completed Units
From BWIP
Costs Assigned to BWIP
Transferred-in costs
D/M
(1)
(2)
(1) / (A)
Conversion Costs
Total
From Units Started & Completed
Total Cost Associated with Units Transferred-out
Cost Assigned to EWIP Units
Transferred-in Costs
D/M Costs
Conversion Costs
Total
Total Costs Accounted for
Journal Entries
Work-in-Process -- Binding Department
Work-in-Process -- Printing Department
To record the transfer of partially completed units from
the Printing Department to the Binding Department.
FIFO Method
Dr
$149,760
Cr
$149,760
Work-in-Process -- Binding Department
Direct Materials Inventory
To record direct material usage during April
28,188
Work-in-Process -- Binding Department
Various Accounts
To record conversion costs during April
84,240
Finished Goods Inventory
Work-in-Process -- Binding Department
To record the transfer of finished units to
finishing goods inventory.
251,740
28,188
84,240
251,740
FIFO Method
WIP - Binding
60,480.00
149,760.00
28,188.00
84,240.00
70,927.83
251,740.17
322,668.00
322,668.00
irect-cost category (DM) and one
ent. Books that have undergone
al is added when the binding
When those operations are done,
method of process costing.
Trans-in
Costs
Direct
Material
Conversion
Costs
$44,100
$0
$16,380
$149,760
$28,188
$84,240
tment costs for week 37, and assign
cess inventory.
Trans-in
Equivalent Units
D/M
Conversion
0
1,980
900
1,260
1,980
900
504 b
1,980 c
675 d
2,880
1,260
4,140
4,140
0
4,140
3,159 b,c,d
756 a
3,915 a,b,c,d
Trans-in
$44,100
$149,760
$193,860
D/M
$0
28,188
$28,188
Conversion
$16,380
84,240
$100,620
$52.000
$6.809
$26.667
$85.475
$44,100.00
$0.00
$0.00
$16,380.00
$60,480.00
$0.00
$8,578.96
$8,578.96
Total
$60,480 a
262,188 b,c,d
$322,668 a.b.c.d
$44,100.00
$102,960.00
$147,060.00
$8,578.96
$13,481.22
$22,060.17
$13,440.00
$29,820.00
$52,800.00
$82,620.00
$46,800.00
$6,127.83
$46,800.00
$193,860.00
$6,127.83
$28,188.00
$18,000.00
$18,000.00
$100,620.00
$13,440.00
$82,498.96
$169,241.22
$251,740.17
$46,800.00
$6,127.83
$18,000.00
$70,927.83
$322,668.00
$322,668.00
$65.475
$85.475
$77.698
Problem 17-42 Operation Costing
Given:
Gregg Industries manufactures plastic molded chairs. The three models of molded chairs, all variations of the same d
Standard, Deluxe, and Executive. The company uses an operation-costing system.
Gregg has extrusion, form, trim, and finish operations. Plastic sheets are produced by the extrusion operation. Durin
operation, the plastic sheets are molded into chair seats and the legs are added. The Standard model is sold after thi
During the trim operation, the arms are added to the Deluxe and Executive models and the chair edges are smoothed.
Executive model enters the finish operation, in which padding is added. All of the units produced receive the same st
each operation.
The May units of production and direct material costs incurred are as follows:
Standard model
Deluxe model
Executive model
Units
Produced
6,000
3,000
2,000
11,000
Extrusion
Materials
$72,000
36,000
24,000
$132,000
Form
Materials
$24,000
12,000
8,000
$44,000
The total conversion costs for the month of May are:
Total conversion costs
Extrusion
Operation
$269,500
Trim
Materials
$0
9,000
6,000
$15,000
Finish
Materials
$0
0
12,000
$12,000
$203,000
Form
Trim
Finish
Operation
Operation Operation
$132,000
$69,000
$42,000
Required:
1.
Calculate the costs of each product type in total and on a per unit basis.
Number of plastic molded chairs produced
Cost Assignment
Direct Material Costs -- Directly Traced to Product
Required Operations
Operation
Standard Deluxe Executive Directly Traced
Extrusion
Yes
Yes
Yes
Yes
Form
Yes
Yes
Yes
Yes
Trim
No
Yes
Yes
Yes
Finish
No
No
Yes
Yes
Direct Material Costs -- Directly Traced to Product
Conversion Costs Assigned by Operation
Required Operations
Operation
Standard Deluxe Executive Charging Rate
Extrusion
Yes
Yes
Yes
$24.50
Form
Yes
Yes
Yes
$12.00
Trim
No
Yes
Yes
$13.80
Finish
No
No
Yes
$21.00
Standard
6,000
Per Unit
Type of Product
Deluxe
3,000
$72,000
24,000
$12.00
4.00
$36,000
12,000
9,000
$96,000
$16.00
$57,000
$147,000
72,000
$24.50
12.00
$73,500
36,000
41,400
Conversion Costs Assigned by Operation
Total costs assigned to products
Total costs per unit
2.
$219,000
$315,000
$52.50
$36.50
$52.50
$150,900
$207,900
$69.30
Calculate the costs assigned to 1,000 units of Deluxe EWIP which are 100% complete except for trim operations
Cost Assignment
Direct Material Costs -- Directly Traced to Product
Required Operations
Operation
Standard Deluxe Executive Directly Traced
Extrusion
Yes
Yes
Yes
Yes
Form
Yes
Yes
Yes
Yes
Trim
No
Yes
Yes
Yes
Finish
No
No
Yes
Yes
Direct Material Costs -- Directly Traced to Product
Conversion Costs Assigned by Operation
Required Operations
Operation
Standard Deluxe Executive Charging Rate
Extrusion
Yes
Yes
Yes
$24.50
Form
Yes
Yes
Yes
$12.00
Trim
No
Yes
Yes
$13.80
Finish
No
No
Yes
$21.00
Conversion Costs Assigned by Operation
Total costs assigned to Deluxe EWIP
Deluxe
1,000
$12,000
$4,000
$3,000
$19,000
600
$8,280
$24,500
12,000
8,280
$44,780
$63,780
all variations of the same design, are
extrusion operation. During the forming
dard model is sold after this operation.
chair edges are smoothed. Only the
duced receive the same steps within
Type of Product
Deluxe
Executive
Per Unit
2,000
Per Unit
$12.00
4.00
3.00
$19.00
$24.50
12.00
13.80
Total
11,000
$24,000
8,000
6,000
12,000
$50,000
$12.00
4.00
3.00
6.00
$25.00
$132,000
44,000
15,000
12,000
$203,000
$49,000
24,000
27,600
42,000
$24.50
12.00
13.80
21.00
$269,500
132,000
69,000
42,000
$50.30
$69.30
$142,600
$192,600
$96.30
$71.30
$96.30
except for trim operations which are 60% complete.
Deluxe
Per Unit
$12.00
4.00
3.00
$19.00
$24.50
12.00
13.80
$8,280
$512,500
$715,500
Problem 17-35, 36, 37
Ashworth Handcraft is a manufacturer of picture frames for large retailers. Every picture frame passes
through two departments: the Assembly Department and the Finishing Department. This problem
focuses on the Assembly Department. The process-costing system at Ashworth has a single direct-cost
category (direct materials) and single indirect-cost category (conversion costs). Direct materials are
added when the Assembly Department process is 10% complete. Conversion costs are added evenly
during the Assembly Department's process.
Ashworth uses the weighted-average method of process costing. Consider the following data for the
Assembly Department in April 2012:
Degree of Completion Physical Units
Direct
Conversion
D/M
Conversion
(Frames)
Materials
Costs
Work-in-Process, April 1
100%
40%
95
$1,665
$988
Started during April 2012
490
Completed during April 2012
455
Work-in-Process, April 30
100%
30%
130
Total costs added during April 2012
$17,640
$11,856
Problem 17-35: Weighted average method; Problem 17-37: FIFO method
Required:
Summarize total Assembly Department costs for April 2012, and assign total costs to units completed (and
transferred out) and to units in ending work-in-process.
Equivalent Units
Forming Department Cost of Production Report
Physical Flow
D/M
Conversion
Degree of Completion
Units to Account for:
D/M
Conversion
BWIP (4/1/12)
100%
40%
95
Started during April
490
Total
585
Units Accounted for:
Completed Units
455
From BWIP
0%
60%
95
0
57
Started And Completed
360
100%
100%
360
360
360
EWIP
100%
30%
130
130
39
Total
585
Calculation of Equivalent Units
FIFO Equivalent Units
(A)
490
456
Plus BWIP EU from previous period
95
38
Weighted Average Equivalent Units
(B)
585
494
Costs to Account for:
D/M
Conversion
b
c
d
b+c+d
a
a+b+c+d
Total
BWIP
$17.53
$26.00
Current Costs Added This Period
Total
Cost per Equivalent Unit:
FIFO
Weighted Average
Costs Accounted for: Fifo Method
Costs Associated with Completed Units
From BWIP
Costs Assigned to BWIP
D/M
Conversion Costs
Total
From Units Started & Completed
Total Cost Associated with Units Transferred-out
Cost Assigned to EWIP Units
D/M Costs
Conversion Costs
Total Cost Assigned to EWIP
Total Costs Accounted for
Costs Accounted for: Weighted Average Method
Costs Associated with Completed Units
Cost Assigned to EWIP Units
D/M Costs
Conversion Costs
Total
Total Costs Accounted for
$43.53
(1)
(2)
(1) / (A)
(2) / (B)
$1,665
17,640
$19,305
$988
11,856
$12,844
$2,653 a$
29,496 b$,c$,d$
$32,149
$36.000
$33.000
$26.000
$26.000
$62.000
$59.000
$1,665
$0
$988
$1,482
$2,470
$9,360
$11,830
$2,653
$0
$1,482
$4,135
$22,320
$26,455
$4,680
$19,305
$1,014
$1,014
$12,844
$4,680
$1,014
$5,694
$32,149
$15,015
$11,830
$26,845
$1,014
$1,014
$12,844
$4,290
$1,014
$5,304
$32,149
$1,665
$12,960
$14,625
$4,680
$4,290
$4,290
$19,305
Problem 17-36 Journal Entries for both FIFO and Weighted Average Methods
Work-in-Process -- Assembly Department
Direct Materials Inventory
To record direct materal usage for April
Fifo Method
Weighted Average Method
Dr
Cr
Dr
Cr
17,640
17,640
17,640
17,640
Work-in-Process -- Assembly Department
Various Accounts
To record direct labor and MOH usage for April
11,856
Work-in-Process -- Finishing Department
26,455
11,856
11,856
11,856
26,845
$43.53
$62.00
$58.14
$59.00
Work-in-Process -- Assembly Department
To record the transfer of partially completed units to the
finishing department for additional production activities.
26,455
26,845
FIFO
Weighted Average
WIP - Assembly Department
WIP - Assembly Department
2,653
17,640
11,856
5,694
26,455
2,653
17,640
11,856
5,304
26,845
Problem 17-29 Operation Costing
Given:
Feather Light Shoe Company manufactures two styles of men's shoes: Designer and Regular.
Designer style is made from leather, and Regular style uses synthetic materials. Three
operations -- cutting, sewing, and packing -- are common to both styles, but only Designer
style passes through a lining operation. The conversion cost rates for 2007 are:
Rate per unit (pair)
Cutting
$10
Sewing
$15
Lining
$8
Details of two work orders processed in August are:
Number of units
Direct materials costs
Style
Work
Order
#815
1,000
$30,000
Designer
Work
Order
#831
5,000
$50,000
Regular
Required:
Calculate the costs of work orders #815 and #831 using Operation Costing.
Number of units (pairs of shoes)
Style of shoe
Cost Assignment
Direct Material Costs -- directly traced
Conversion Costs Assigned by Operation
Required Operations
Operation
Designer Regular Charging Rate
Cutting
Yes
Yes
$10
Sewing
Yes
Yes
$15
Lining
Yes
No
$8
Packing
Yes
Yes
$2
Total costs assigned to work orders
Total costs per unit
Work Order Number
815
831
1,000
5,000
Designer
Regular
$30,000
$50,000
10,000
15,000
8,000
2,000
$65,000
$65
50,000
75,000
10,000
$185,000
$37
Packing
$2
In-class Group Quiz on Process Costing
Star Toys manufactures one type of wooden toy figure. It buys wood as its direct material for the
Forming Department. Semi-completed toys are transferred from the Forming Department to the
Finishing Department where the manufacturing process is completed. The accounting system at
Star Toys has a single direct-cost category (direct materials) and a single indirect-cost category
(conversion costs). Direct materials are added at the beginning of the Forming Department's
process. Conversion costs are added evenly during production operations. The chief accountant
has collected the following data concerning the Forming Department's operations during April 2007:
WIP, April 1
Started during April
Completed during April
WIP, April 30
New costs added in April
Degree of Completion
DM
Conversion
100%
40%
100%
25%
Physical
Direct
Units
Materials Conversion
(Toys)
Costs
Costs
300
$7,500
$2,125
2,200
2,000
500
$70,000
$42,500
Star Toys uses a process costing system to record operation.
Required: Answer the following questions in the space allotted.
1. Prepare a schedule which displays the physical flow of operations for April 2007.
Physical Flow
Units to Account for:
BWIP (4/1/07)
Started during April
Total
300
2,200
2,500
Units Accounted for:
Completed Units
From BWIP (4/30/07)
Started and completed
300
1,700
1,700
1,700
EWIP
Total
2.
500
2,500
Prepare a schedule which displays the production costs to be accounted for during April 2007.
Costs to Account for:
D/M
Conversion
Total
BWIP
$7,500
$2,125
$9,625
Current Costs Added This Period
70,000
42,500
112,500
$77,500
$44,625
$122,125
Total
3.
Prepare a schedule which displays the equivalent units of production using the FIFO method.
Degree of Completion
D/M
Conversion
Physical
Equivalent Units
Flow
D/M
Conversion
Units to Account for:
BWIP (4/1/07)
100%
40%
Started during April
300
2,200
Total
2,500
Units Accounted for:
Completed Units
2,000
From BWIP
Started And Completed
EWIP (4/30/07)
100%
25%
Total
300
0
180
1,700
1,700
1,700
500
500
125
2,200
2,005
2,500
Calculation of FIFO Equivalent Units
4.
Prepare a schedule which displays the equivalent unit conversion from the FIFO method of
calculating equivalent units to the weighted-average method of calculating equivalent units.
FIFO Equivalent Units
2,200
2,005
Plus BWIP EU from previous period
300
120
Weighted Average Equivalent Units
2,500
2,125
5. Show how the cost per equivalent unit is determined for both direct materials and conversion
costs under both the FIFO and the weighted average methods.
Costs to Account for:
D/M
BWIP
$7,500
Current Costs Added This Period
Conversion
$2,125
Total
$9,625
70,000
42,500
112,500 (1)
$77,500
$44,625
$122,125 (2)
FIFO Equivalent Units
2,200
2,005
(A)
Weighted Average Equivalent Units
2,500
2,125
(B)
Total
Cost per Equivalent Unit:
FIFO
(1) / (A)
$31.818
$21.197
$53.015
Weighted Average
(2) / (B)
$31.000
$21.000
$52.000
6. Prepare a schedule which displays the costs of production accounted for using the weighted
average method.
D/M
Costs Associated with Units Completed
$62,000
Conversion
$42,000
Total
$104,000
Cost Assigned to EWIP Units
D/M Costs
$15,500
Conversion Costs
Total
Total Costs Accounted for
$15,500
$2,625
$2,625
$15,500
$2,625
$18,125
$77,500
$44,625
$122,125
7. Prepare a schedule which displays the costs of production accounted for using the FIFO method.
Costs Associated with Units Completed
D/M
Conversion
Total
From BWIP
Costs Assigned to BWIP
$7,500.00
D/M
Conversion Costs
Total
From Units Started & Completed
Total cost associated with units transferred-out
$2,125.00
$9,625.00
3,815.46
3,815.46
$5,940.46
$13,440.46
0.00
$7,500.00
0.00
54,090.91
36,034.91
90,125.82
$61,590.91
$41,975.37
$103,566.28
Cost Assigned to EWIP Units
D/M Costs
$15,909.09
Conversion Costs
Total Cost Assigned to EWIP
Total Costs Accounted for
$15,909.09
$2,649.63
2,649.63
$15,909.09
$2,649.63
$18,558.72
$77,500.00
$44,625.00
$122,125.00
8. Prepare the general journal entry to record the transfer of partially completed units from the
Forming Department to the Finishing Department assuming that the FIFO method of process
costing is used.
Fifo Method
Dr
Work-in-Process -- Finishing Department
Cr
103,566
Work-in-Process -- Forming Department
103,566
To record the transfer of partially completed units to the
finishing department for additional production activities.
9. Prepare the general journal entry to record the transfer of partially completed units from the
Forming Department to the Finishing Department assuming that the weighted-average method
of process costing is used.
Weighted Average Method
Dr
Work-in-Process -- Finishing Department
Work-in-Process -- Forming Department
To record the transfer of partially completed units to the
finishing department for additional production activities.
Cr
104,000
104,000
B
C
D
B+C+D
Problem 17-38 (Weighted Average Method)
Finishing Department Cost of Production Report
Units to Account for:
BWIP (4/1/04) (D/M 100% C; CC 40% C)
Transferred-in from Forming during April
Total
Units Accounted for:
From BWIP
Started And Completed
EWIP
Total
Calculation of Equivalent Units
FIFO Equivalent Units
Plus BWIP EU from previous period
Weighted Average Equivalent Units
Physical Flow
Trans-in
100%
Degree of Completion
D/M
Conversion
0%
60%
100%
0%
500
2,000
2,500
500
1,600
400
2,500
30%
(A)
(B)
Costs to Account for:
BWIP
Current Costs Added This Period
Total
Cost per Equivalent Unit:
Weighted Average
Costs Accounted for: Weighted Average Method
Costs Associated with Completed Units
Cost Assigned to EWIP Units
Transferred-in Costs
D/M Costs
Conversion Costs
Total
Total Costs Accounted for
(1)
(2)
(2) / (B)
Problem 17-38 Journal Entries for Weighted Average Methods
Weighted Average Method
Work-in-Process -- Finishing Department
Work-in-Process -- Forming Department
To record the transfer of partially completed units to the
finishing department for additional production activities.
Dr
104,000
Cr
104,000
Work-in-Process -- Finishing Department
Direct Materials Inventory
To record direct materal usage for the month of April
23,100
Work-in-Process -- Finishing Department
Various Accounts
To record conversion costs usage for the month of April
38,400
23,100
38,400
Finished Goods Inventory
Work-in-Process -- Finishing Department
To record the transfer of finished units to the
finishing goods inventory.
168,552
168,552
Weighted Average
WIP - Finishing Department
25,000
104,000
23,100
38,400
21,948
168,552
Trans-in
Equivalent Units
D/M
Conversion
0
1,600
400
500
1,600
0
200
1,600
120
2,000
500
2,500
2,100
0
2,100
1,920
300
2,220
Trans-in
$17,750
104,000
$121,750
D/M
$0
23,100
$23,100
Conversion
$7,250
38,400
$45,650
Total
$25,000
165,500
$190,500
$48.700
$11.000
$20.563
$80.263
$102,270.00
$23,100.00
$43,182.43
$168,552.43
$2,467.57
$2,467.57
$45,650.00
$19,480.00
$0.00
2,467.57
$21,947.57
$190,500.00
$19,480.00
$0.00
$19,480.00
$121,750.00
$0.00
$23,100.00
Problem 17-39
Finishing Department Cost of Production Report
Units to Account for:
BWIP (4/1/04) (D/M 100% C; CC 40% C)
Transferred-in from Forming during April
Total
Units Accounted for:
From BWIP
Started And Completed
EWIP
Total
Calculation of Equivalent Units
FIFO Equivalent Units
Plus BWIP EU from previous period
Weighted Average Equivalent Units
Physical Flow
Trans-in
100%
Degree of Completion
D/M
Conversion
0%
60%
100%
0%
Costs to Account for:
BWIP
Current Costs Added This Period
Total
Cost per Equivalent Unit:
FIFO
Costs Accounted for: Fifo Method
Costs Associated with Completed Units
From BWIP
Costs Assigned to BWIP
Transferred-in costs
D/M
Conversion Costs
Total
From Units Started & Completed
Total Cost Associated with Units Transferred-out
Cost Assigned to EWIP Units
D/M Costs
Conversion Costs
Total Cost Assigned to EWIP
Total Costs Accounted for
30%
500
2,000
2,500
500
1,600
400
2,500
(A)
(B)
(1)
(2)
(1) / (A)
Problem 17-39 Journal Entries for both FIFO and Weighted Average Methods
Work-in-Process -- Finishing Department
Work-in-Process -- Forming Department
To record the transfer of partially completed units to the
finishing department for additional production activities.
FIFO Method
Dr
103,566
Work-in-Process -- Finishing Department
Direct Materials Inventory
To record direct materal usage for the month of April
23,100
Work-in-Process -- Finishing Department
Various Accounts
To record conversion costs for the month of April
38,400
Finished Goods Inventory
Work-in-Process -- Finishing Department
To record the transfer of finished units to the
finishing goods inventory.
166,723
FIFO
WIP - Finishing Department
24,770
103,566
23,100
38,400
23,113
Trans-in
Equivalent Units
D/M
Conversion
0
1,600
400
500
1,600
0
200
1,600
120
2,000
500
2,500
2,100
0
2,100
1,920
300
2,220
Trans-in
$17,520
103,566
$121,086
D/M
$0
23,100
$23,100
Conversion
$7,250
38,400
$45,650
Total
$24,770
165,066
$189,836
$51.783
$11.000
$20.000
$82.783
$17,520.00
0.00
$0.00
$7,250.00
$24,770.00
4,000.00
$11,250.00
32,000.00
$43,250.00
5,500.00
4,000.00
$34,270.00
132,452.80
$166,722.80
$2,400.00
$2,400.00
$45,650.00
$20,713.20
2,400.00
$23,113.20
$189,836.00
5,500.00
$17,520.00
82,852.80
$100,372.80
$5,500.00
17,600.00
$23,100.00
$20,713.20
$0.00
$20,713.20
$121,086.00
FIFO Method
Cr
103,566
$0.00
$23,100.00
23,100
38,400
166,723
FIFO
WIP - Finishing Department
166,723