SOLUTION:
1. ANS:
Landers Company
Schedule of Equivalent Units for
Fifo and Weighted Average
May 31, 20X5
FIFO
Beginning Work In Process
10,000
Units Started
Units to Acct. For
Beginning Work In Process
Started & Completed
120,000
130,000
10,000
90,000
Ending Work in Process
Units Accounted For
30,000
130,000
(a)
BWIP
S&C
EWIP
EUP
DIF:
FIFO
Mat.
CC
0
90,000
30,000
120,000
7,500
90,000
9,000
106,500
Moderate
Weighted Average
Beginning Work In
Process
Units Started
Units to Acct. For
Transferred Out
Ending Work in
Process
Units Accounted For
(b) Weighted Average
Mat.
TO
EI
EUP
100,000
30,000
130,000
10,000
120,000
130,000
100,000
30,000
130,000
CC
100,000
9,000
109,000
OBJ: 6-3,6-4
2. ANS:
Landers Company
Schedule of Average Cost Per Unit
FIFO and Weighted Average
May 31, 20X5
(a) FIFO
Mat.
Costs $33,000
Eq Units 120,000
$.275/eq unit
Total cost/eq. unit
DIF:
Moderate
CC
$109,695
106,500
$ 1.03/eq
unit
$ 1.305/eq
unit
(b) Weighted Average
Mat.
CC
$ 35,100
$111,725
130,000
109,000
$ .27/eq
$ 1.025/eq
unit
unit
$ 1.295/eq
unit
OBJ: 6-3,6-4
Cost Accounting Foundations and Evolutions
Kinney, Raiborn
3. ANS:
Landers Company
Schedule of Assigned Costs
FIFO and Weighted Average
May 31, 20X5
(a) FIFO
Beginning Work in Process
To complete (7,500 x $1.03) =
$
Started and Completed
90,000 x $1.305 =
Total costs transferred out
117,450
$129,305
Ending Work in Process
30,000 x $ .275 =
9,000 x $1.03 =
$
Total costs accounted for
(b) Weighted Average
Completed
100,000 x $1.295 =
Ending Work in Process
30,000 x $ .27 =
9,000 x $1.025 =
Total costs accounted for
DIF:
Difficult
4,130
7,725
$ 11,855
8,250
9,270
$ 17,520
$146,825
$129,500
$
8,100
9,225
$ 17,325
$146,825
OBJ: 6-3,6-4
Cost Accounting Foundations and Evolutions
Kinney, Raiborn
4. ANS:
a. Cooking Department
Materials
Transferred Out
Ending Work in Process
TOTAL EUP
Conversion
Costs
17,100
2,400
19,500
17,100
1,440
18,540
Transferred
In
Materials.
Conversion
Costs
17,600
500
18,100
17,600
400
18,000
17,600
400
18,000
Packaging Department
Transferred Out
Ending Work in Process
TOTAL EUP
b.
Cooking Department
Materials
Beginning Work in Process
Transferred from Cooking
Ending Work in Process
TOTAL EUP
Conversion
Costs
0
12,600
2,400
15,000
3,150
12,600
1,440
17,190
Transferred
In
Materials
Conversion
Costs
0
16,600
500
17,100
100
16,600
400
17,100
200
16,600
400
17,200
Packaging Department
Beginning Work in Process
Transferred from Cooking
Ending Work in Process
TOTAL EUP
DIF:
Difficult
OBJ: 6-3,6-4
Cost Accounting Foundations and Evolutions
Kinney, Raiborn
5. ANS:
a.
Weighted average inventory
assumption
Dept 1
20,000
Complete
5,000
Eq-End WIP
25,000
EP-WA
Unit
Cost
$201,050 = $8.042
25,000
End WIP
MAT
CC
20,000
0
20,000
20,000
2,000
22,000
$34,000 = $1.70
20,000
$109,450 = $4.975
22,000
= $14.717
= $40,210
= 9,950
$50,160
Dept 1 = 5,000 x $8.042
CC = 2,000 units x $4.975
COGM = $344,500 - $50,160 = $294,340
b.
FIFO inventory assumption
Dept 1
MAT
Complete
Eq-End WIP
- Eq-Begin
20,000
5,000
(2,000)
20,000
0
0
EP-WA
23,000
20,000
Unit
Cost
$184,000 = $8.00
23,000
$34,000 = $1.70
20,000
End WIP
Dept 1 = 5,000 units x $8.00
CC = 2,000 units x $5.00
CC
20,000
2,000
(1,200)
20,800
$104,000 = $5.00
20,800
= $14.70
= $40,000
= 10,000
$50,000
COGM = $344,500 - $50,000 = $294,500
DIF:
Moderate
OBJ: 6-3,6-4
Cost Accounting Foundations and Evolutions
Kinney, Raiborn
6. ANS:
a.
b.
c.
Materials
Conversion
Costs
PD
Mat
CC
46,500
9,000
(8,000)
47,500
46,500
3,000
(6,000)
43,500
44,500
12,000
(10,000)
46,500
44,500
0
0
44,500
44,500
2,400
(3,000)
43,900
Since the material in the second department goes in at the 50 percent point and the ending WIP
inventory is only at the 20 percent point, units complete is the same as the equivalents of
material 44,500, given that units started plus units in beginning WIP are equal to units
complete plus ending WIP 10,000 + 46,500 - 44,500 = 12,000 units in ending WIP.
DIF:
Moderate
OBJ: 6-3,6-4
7. ANS:
Equivalent production
Units complete
+ Equiv. ending WIP
= Equiv. prod. average
- Equiv. begin. WIP
= Equiv. prod. FIFO
16,000
6,000
22,000
(4,000)
18,000
Unit Cost Average
Unit Cost FIFO
TI = $620 + 1,800
22,000
Mat =
$4,800
16,000
TI
= $0.11
Ma
20,000
Conv. cost
16,000
0
16,000
0
16,000
TI = $1,800
18,000
16,000
4,000
20,000
(3,000)
17,000
= $0.10
t = $4,800
= $0.30
CC = $2,000 + 10,200
End. WIP-WA
PD
CC
Material
16,000
= $0.30
CC = $10,200
= $0.61
17,000
= $0.60
End. WIP-FIFO
6,000 x $0.11 =
4,000 x $0.61 =
$
660.00
2,440.00
$3,100.00
6,000 x $0.10 =
4,000 x $0.60 =
$
600.00
2,400.00
$3,000.00
Cost of Goods Complete
WA
$19,420 - 3,100 =
FIFO
$16,320.00
$19,420 - 3,000 =
Cost Accounting Foundations and Evolutions
$16,420.00
Kinney, Raiborn
DIF:
Moderate
OBJ: 6-3,6-4
MSC: 15-20 min
8. ANS:
a.
Complete
+ Equiv WIP
+ Normal Sp
+ Abnor Sp
TI
Mat
CC
33,600
10,500
1,680
420
46,200
33,600
10,500
1,680
420
46,200
33,600
4,200
1,680
420
39,900
b. 33,600 x $9
1,680 x $9
$302,400
15,120
$317,520
c. 10,500 x $5
10,500 x $1
4,200 x $3
$52,500
10,500
12,600
$75,600
TC = 46,200 x $5
46,200 x $1
39,900 x $3
$231,000
46,200
119,700
$396,900
COGM = $396,900 - 75,600 - 3,780 = $317,520
d. $5 = $18,900 + X
46,200
X = $231,000 - 18,900 = $212,100
e. ABN = 420 x $9 = $3,780
420 x $9 = $3,780
DIF:
Moderate
OBJ: 6-3,6-8
Cost Accounting Foundations and Evolutions
Kinney, Raiborn
9. ANS:
TI
MAT
6,650
1,500
100
200
8,450
Complete
+ end
+ normal
+ abnormal
DL
6,650
0
100
0
6,750
MOH
6,650
600
100
60
7,410
6,650
300
100
30
7,080
Unit Cost
End WIP
DL
MOH
TI
600 x $3.40
300 x $8.80
1,500 x $9.00
=
=
=
Abnormal Loss
DL
MOH
TI
60 x $3.40
30 x $8.80
200 x $9.00
=
=
=
$ 2,040
2,640
13,500
$18,180
$
204
264
1,800
$ 2,268
COGM = $171,513 - 18,180 - 2,268 = $151,065
DIF:
Moderate
OBJ: 6-3,6-8
10. ANS:
Normal Sp = 11% x 61,000 = 6,710 units
Abnormal Sp = 8,000 - 6,710 = 1,290 units
Mat
CC
Complete
+ End
+ Ab Sp
- Ave
- Beg
FIFO
61,000
16,000
1,290
78,290
(11,000)
67,290
FIFO
61,000
12,000
1,290
74,290
(2,750)
71,540
Mat =
CC =
WIP
Material
CC
$1,480,000
67,290
$942,000
71,540
=
16,000 x
$22.00
12,000 x
$13.17
$352,000
Loss = 1,290 x $35.17
Cost Accounting Foundations and Evolutions
= $22.00
13.17
$35.17
158,040
$510,040
45,369
Kinney, Raiborn
COGM = $2,672,000 - 510,040 - 45,369 = $2,116,591
DIF:
Moderate
OBJ: 6-3,6-8
11. ANS:
a.
1
Mat
CC
Complete
22,000
22,000
+ End WIP
2,800
- Beg WIP
24,800
1,120
23,120
(1,000)
(650)
23,800
22,470
(2,800
x 4)
Mat =
$38,080
23,800
=
$
1.60
CC =
$78,645
=
$
3.50
=
$
4,480
22,470
(1,000
x .65)
End
WIP =
2,800 x
$1.60
1,120 x
$3.50
3.920
$ 8,400
$112,175
COGM = $120,575 - 8,400
b.
2
TI
Mat
CC
Mat =
$ 77,775
25,500
=
$
$3.05
Complete
+ End WIP
+ Normal
24,000
4,500
1,100
24,000
0
1,120
24,000
900
880
CC =
$ 15,399
26,100
=
$
$0.59
+ Abnormal
400
30,000
400
25,500
320
26,100
TI =
$154,500
=
$
5.15
30,000
End WIP
4,500 x $5.15
900 x $0.59
$23,175
531
$23,706
Abn Loss
400 x $3.05
320 x $0.59
400 x $5.15
$1,220
189
2,060
$3,469
COGM = $247,674 - 23,706 - 3,469 = $220,499
DIF:
Moderate
OBJ: 6-3, 6-8
Cost Accounting Foundations and Evolutions
Kinney, Raiborn
12. ANS:
Mat
Units Complete
+ Equivalents Ending WIP
+ Abnormal Loss
= Equivalent Production-WA
= Equivalent Begin WIP
= Equivalent Production-FIFO
Unit Costs:
WA
Mat
$915,120 = $5.05
181,200
CC
$338,688 = $1.97
171,520
Ending WIP
Material
CC
Abnormal Spoilage
Material
CC
20,000 x $5.05
14,000 x $1.97
9,200 x $5.05
5,520 x $1.97
152,000
20,000
9,200
181,200
(6,000)
175,200
FIFO
Mat
CC
CC
152,000
14,000
5,520
171,520
(1,800)
169,720
(9,200 x .6)
$885,120
175,200
= $5.05
$335,088
169,720
= $1.97
$101,000
27,580
$128,580
$ 46,460
10,874
$ 57,334
Cost of Good Transferred
1,253,808 - 128,580 - 57,334 = $1,067,894
DIF:
Moderate
OBJ: 6-3,6-8
Cost Accounting Foundations and Evolutions
Kinney, Raiborn
13. ANS:
Delightful Yogurt Company
Cost Report
October 31, 20X5
5,000
5,500
1,200
11,700
BWIP
Trans. In
Fruit
Acctble. For
TI
9,000
1,700
1,000
11,700
Transferred Out
EWIP
Abnormal Spoilage
Fruit
9,000
1,700
1,000
11,700
Container
9,000
0
0
9,000
CC
9,000
1,020
980
11,000
Costs:
BWIP
Current
EUP
Per unit
TI
Fruit
$ 9,700
12,400
$22,100
11,700
$1.89
$10,500
54,000
$64,500
11,700
$5.51
Container
$ 0
11,000
$11,000
9,000
$1.22
$ 3,213
9,367
10,475
$ 23,055
$ 1,890
5,510
10,065
17,465
CC
$ 15,000
98,000
$113,000
11,000
$10.27
Cost Assignment:
EWIP
1,700 x $1.89 =
1,700 x $5.51 =
1,020 x $10.27 =
Spoilage
1,000 x $1.89 =
1,000 x $5.51 =
980 x $10.27 =
Transferred Out
$210,600 - 23,055 - 17,465 =
$210,600
Total accounted for
DIF:
Moderate
170,080
OBJ: 6-3,6-8
Cost Accounting Foundations and Evolutions
Kinney, Raiborn
14. ANS:
BI 8,000 + Started 35,000 = Accountable for 43,000
Hocking Company
Cost Report
March 31, 20X8
Material
8,000
11,500
15,000
6,000
2,500
43,000
BWIP
S&C
EWIP
Norm
Abnorm.
Acctd. For
0
11,500
15,000
0
2,500
29,000
CC
1,600
11,500
8,250
0
23,850
Material: $50,000/29,000 = $1.72
Conversion Costs: $175,000/23,850 = $7.34
Cost Assignment:
Ending Work in Process
15,000 x $1.72 =
8,250 x $7.34 =
Abnormal Spoilage
2,500 x $9.06 =
Cost Transferred Out
$284,000 - 86,355 - 22,650 =
Total costs accounted for
DIF:
Moderate
$ 25,800
60,555
$ 86,355
22,650
174,995
$ 284,000
OBJ: 6-4,6-8
Cost Accounting Foundations and Evolutions
Kinney, Raiborn
15. ANS:
BI 8,000 + Started 35,000 = Accountable for 43,000
Hocking Company
Cost Report
March 31, 20X8
Material
Transferred Out
Ending Work In Process
Normal Spoilage
Abnormal Spoilage 2,500
Accounted For
19,500
15,000
6,000
2,500
43,000
19,500
15,000
0
2,500
37,000
CC
19,500
8,250
0
30,250
Material: $64,000/37,000 = $1.73
Conversion Costs: $220,000/30,250 = $ 7.27
Cost Assignment:
Ending Work in Process
15,000 x $1.73 =
8,250 x $7.27 =
Abnormal Spoilage
2,500 x $9.00 =
Transferred Out
$284,000 - 85,928 - 22,500 =
Total costs accounted for
DIF:
Moderate
$25,950
59,978
$ 85,928
22,500
175,572
$ 284,000
OBJ: 6-3,6-8
Cost Accounting Foundations and Evolutions
Kinney, Raiborn