Total costs to account for $75,000 $372,000 $447,000 Cost per equivalent unit$1. 00$5. 00$6. 00 Costs accounted for: Units completed (75,000 $6. 00) $450,000 Ending work in process (12,000 $1. 00) + (11,400 $5. 00) 69,000 Total costs accounted for $519,000 5–6 Weighted Average Method, FIFO, Physical Flow, Equivalent Units 1. Physical flow schedule: Units, beginning work in process12,000 Units started 20,000 Units to account for 22,000 Units completed and transferred out: Started and completed 1,200 From beginning work in process 12,000 Units, ending work in process8,800 Total units accounted for 22,000 2.
Equivalent units—Weighted average method: Direct MaterialsConversion Costs Units completed13,20013,200 Units, ending work in process: 8,800 100%8,800 8,800 25%2,200 Equivalent units of output22,00015,400 3. Equivalent units—FIFO method: Direct MaterialsConversion Costs Units started and completed1,2001,200 Units, beginning work in process: 12,000 0%0 12,000 70%8,400 Units, ending work in process: 8,800 100%8,200 8,800 25%2,200 Equivalent units of output9,40011,800 5–7FIFO Method, Valuation of Goods Transferred Out and Ending Work in Process 1. Ending work in process: Direct materials (4,000 $3. 0)$12,000 Conversion costs (3,000 $5. 00)15,000 Total ending work in process$27,000 Cost of goods transferred out: Units started and completed (11,000 $8. 00)$88,000 Units, beginning work in process: Prior-period costs60,000 Current costs to finish (5,000 $5. 00)25,000 Total cost of goods transferred out$173,000 2. Physical flow schedule: Units to account for: Units, beginning work in process5,000 Units started15,000 Total units to account for20,000 Units accounted for: Units completed: Started and completed 11,000 Units, beginning work in process5,000 Units, ending work in process4,000
Total units accounted for 20,000 5-8FIFO Method, Valuation of Goods Transferred Out and Ending Work in Process ABCD Completed18,000a22,000c40,000d50,000f Units in ending WIP800b02,000e1,000g Equivalent units18,80022,00042,00051,000 a(3,000 + 19,000 – 4,000). e(8,000 0. 25). b(4,000 0. 20). f(35,000 + 25,000 – 10,000). c(2,000 + 20,000 – 0). g(10,000 0. 10). d(48,000 – 8,000). 5–9Equivalent Units, FIFO Method ABCD Started and completeda15,00020,00040,00025,000 Beginning work in processb2,100500010,000 Ending work in processc80002,000 1,000 Equivalent units17,90020,50042,00036,000 –10Weighted Average Method, Unit Cost, Valuation of Goods Transferred Out and Ending Work in Process 1. Unit cost= Unit direct materials cost + Unit conversion costs = ($30,000 + $25,000)/11,000 + ($5,000 + $65,000)/8,000 = $5. 00 + $8. 75 = $13. 75 per equivalent unit 2. Cost of ending work in process: Direct materials ($5. 00 6,000)$30,000 Conversion costs ($8. 75 3,000)26,250 Total$56,250 Cost of goods transferred out = $13. 75 5,000 = $68,750 5–11FIFO Method, Unit Cost, Valuation of Good Transferred Out and Ending Work in Process 1. Physical flow schedule: Units to account for: Units, beginning work in process10,000
Units started12,000 Total units to account for22,000 Units accounted for: Started and completed8,000 Units, beginning work in process10,000 Units, ending work in process4,000 Total units accounted for22,000 2. Unit cost= Unit direct material costs + Unit conversion costs = $24,000/12,000 + $32,000/10,000 = $2. 00 + $3. 20 = $5. 20 per equivalent unit 3. Cost of ending work in process: Direct materials (4,000 $2. 00)$8,000 Conversion costs (1,000 $3. 20)3,200 Total cost$11,200 Cost of goods transferred out: Units started and completed (8,000 $5. 20)$41,600 Units in beginning work in process:
Prior-period costs10,000 Current cost to finish units (1,000 $3. 20)3,200 Total cost$54,800 4. Work in Process—Sewing54,800 Work in Process—Cutting54,800 5–12Weighted Average Method, Equivalent Units, Unit Cost, Multiple Departments 1. Equivalent units calculation: DirectConversionTransferred MaterialsCostsIn Units completed8,0008,0008,000 Ending WIP: 4,000 50%2,0002,000 4,000 100%4,000 Total equivalent units10,00010,00014,000 2. Costs charged to the department: DirectConversionTransferred MaterialsCostsInTotal Costs in BWIP$2,500$3,000$4,000$9,500 Costs added by department16,00025,00020,00061,000
Total costs$18,500$28,000$24,000$70,500 Unit cost= Unit direct materials cost + Unit conversion costs + Unit transferred-in cost = $18,500/10,000 + $28,000/10,000 + $24,000/14,000 = $1. 85 + $2. 80 + $2. 00 = $6. 65 5–13FIFO Method, Equivalent Units, Unit Cost, Multiple Departments Equivalent units calculation: DirectConversionTransferred MaterialsCostsIn Units started and completed6,0006,0006,000 Units to complete in BWIP: 2,000 60%1,2001,200 Units in EWIP: 4,000 100%4,000 4,000 50%2,0002,000 Total equivalent units9,2009,20010,000 Unit cost= Unit direct materials cost + Unit conversion costs +
Unit transferred-in cost =$16,000/9,200 + $25,000/9,200 + $20,000/10,000 = $1. 74 + $2. 72 + $2. 00 = $6. 46* 5–14Journal Entries, Cost of Ending Inventories 1. Journal entries: a. Work in Process—Assembly24,000 Materials Inventory24,000 b. Work in Process—Assembly4,600 Work in Process—Finishing3,200 Wages Payable7,800 c. Work in Process—Assembly5,000 Work in Process—Finishing4,000 Overhead Control9,000 d. Work in Process—Finishing32,500 Work in Process—Assembly32,500 e. Finished Goods20,500 Work in Process—Finishing20,500 f. Overhead Control10,000 Miscellaneous Accounts10,000 2. Work in Process—Assembly: 24,000 4,600 5,000 (32,500) $1,100ending inventory Work in Process—Finishing: $3,200 4,000 32,500 (20,500) $19,200ending inventory 5–15Weighted Average Method, Physical Flow, Equivalent Units, Unit Costs, Cost Assignment 1. Physical flow schedule: Units to account for: Units, beginning work in process3,000 Units started7,000 Total units to account for10,000 Units accounted for: Units completed and transferred out9,000 Units, ending work in process1,000 Total units accounted for10,000 2. Equivalent Units Direct MaterialsConversion Costs Transferred out9,0009,000 Ending WIP1,000250 Total10,0009,250 3.
Unit direct materials cost= ($90,000 + $190,000)/10,000 = $28 Unit conversion costs= ($27,600 + $434,900)/9,250 = $50 Total unit cost= $28 + $50 = $78 4. Cost of goods transferred out: 9,000 $78 = $702,000 Ending WIP: (1,000 $28) + (250 $50) = $40,500 Reconciliation: Costs to account for:Costs accounted for: BWIP ($90,000 + $27,600)$117,600Transferred out$702,000 July ($190,000 + $434,900)624,900EWIP40,500 Total$742,500Total$742,500 5. Work in Process—Drilling40,500 Work in Process—Molding40,500 5–16FIFO Method, Physical Flow, Equivalent Units, Unit Costs, Cost Assignment 1. Physical flow schedule: Units to account for:
Units, beginning work in process3,000 Units started7,000 Total units to account for10,000 Units accounted for: Units completed and transferred out9,000 Units, ending work in process1,000 Total units accounted for10,000 2. Direct MaterialsConversion Costs Started and completed6,0006,000 Beginning WIP to complete02,400 Ending WIP9,000 2,250 Equivalent units15,00010,650 3. Unit direct materials ($190,000/15,000)$12. 667* Unit conversion costs ($434,900/10,650)40. 836* Total unit cost$53. 503* * Rounded. 4. Cost of goods transferred out: From beginning WIP ($90,000 + $27,600)$117,600 To complete beginning WIP (2,400 $40. 36) 98,006* Started and completed (6,000 $53. 503) 321,018 Total$536,624 Cost of ending WIP= ($12. 667 9,000) + ($40. 836 2,250) = $114,003 + $91881 = $205,884 Reconciliation: Costs to account for:Costs accounted for: Beginning WIP$117,600Transferred out$536,624 July624,900Ending WIP205,884 $742,500$742,528* * Difference due to rounding. 5–17Operation Costing: Bread Manufacturing 1. Operation costing is a combination of 1. ) job costing (costs can be traced directly to a specific product) and 2. ) process costing (production costs can be allocated to a large group of identical products). . Job Costing – the flour, sugar, salt, butter, etc. , on each batch of dinner rolls or whole wheat loaves can easily be accounted for. Expenses during the mixing process can be directly traced to each batch of bread. Process Costing – the overhead (electricity, machine hours, depreciation, etc. ) and labor costs will be based on this costing method. The differentiation of the products begin at the Shaping stage, from this stage, it is hard to directly account for the expenses/cost. 5–19Weighted Average Method, Single Department Analysis, Uniform Costs Peterson Company Assembly Department ------------------------------------------------ Production Report for April 2001 Unit Information Units to account for: Units, beginning work in process10,000 Units started15,000 Units to account for25,000 Units accounted for: Physical FlowEquivalent Units Units completed20,00020,000 Units, ending work in process5,0004,000 Total units accounted for25,00024,000 Cost Information Costs to account for: Manufacturing Costs Costs, beginning work in process$24,000 Costs added by department52,000 Total costs to account for$76,000 Cost per equivalent unit ($76,000/24,000)$3. 167*
Costs accounted for: Units completed (20,000 $3. 167)$63,340 Units, ending work in process (4,000 $3. 167)12,668 Total costs accounted for$76,008* * Rounded 5–20FIFO Method, Single Department Analysis, One Cost Strategy Peterson Company Assembly Department ------------------------------------------------- Production Report for April 2001 Unit Information Units to account for: Units, beginning work in process10,000 Units started15,000 Total units to account for25,000 Units accounted for: Physical FlowEquivalent Units Started and completed10,00010,000 From beginning work in process10,0006,000
Units, ending work in process5,0004,000 Total units accounted for25,00020,000 Cost Information Costs to account for: Manufacturing Costs Costs, beginning work in process$24,000 Costs added by department52,000 Total costs to account for$76,000 Cost per equivalent unit ($52,000/20,000)$2. 60 Costs accounted for: Transferred out: Units started and completed (10,000 $2. 60)$26,000 Units, beginning work in process: Prior-period costs24,000 Current costs to finish units (6,000 $2. 60)15,600 Total cost transferred out$65,600 Units, ending work in process (4,000 $2. 60)10,400 1Total costs accounted for$76,000
