Valuation of Ending Work-in Process using process costing.
The following information is available for Department A for the month of July
|
|
Units
|
Cost
|
|
Work in process, July 1 (60% complete)
|
5,000
|
|
|
Direct materials
|
|
$12,000
|
|
Conversion
|
|
18,000
|
|
Total work in process, July 1
|
|
$30,000
|
|
Started in production during July
|
20,000
|
|
|
Costs added:
|
|
|
|
Direct materials
|
|
$36,000
|
|
Conversion
|
|
52,000
|
|
Total costs added during July
|
|
$88,000
|
Work in process, July 31, (40% complete) 2,000
Materials are added at the beginning of the process. (Round to two decimal places.)
|
PARTICULARS
|
MATERIALS
|
CONVERSION
|
|
Opening
|
12000
|
18000
|
|
Cost incurred
|
36000
|
52000
|
|
Total Cost
|
48000
|
70000
|
|
EQUIVALENT UNITS OF PRODUC TION
|
|
|
|
Transferred out
|
23000
|
23000
|
|
Work-in-process
|
2000
|
(2000*40%)= 800
|
|
25000
|
23800
|
|
|
Cost per equivalent production
|
=48000/25000=1.92
|
=70000/23800=2.94
|
|
COST OF GOODS TRANSFERRED OUT
|
(1.92+2.94)*23000
|
=111780
|
|
Ending work-in-process
|
=(2000*1.92)+(800*2.94)
|
=6192
|
Work in process, July 31, (40% complete) 2,000
Materials are added at the beginning of the process. (Round to two decimal places.)
1. Refer to Figure 6-6. Department A's cost per equivalent unit of production for materials using the weighted average method would be
a. $2.40
b. $2.08
c. $1.92
d. $1.80
2. Refer to Figure 6-6. Department A's cost per equivalent unit of production for conversion using the weighted average method would be
a. $2.60
b. $2.94
c. $3.04
d. $3.50
3. Refer to Figure 6-6. Department A's cost of goods transferred out using the weighted average method would be
a. $97,200
b. $80,500
c. $111,780
d. $118,000
4. Refer to Figure 6-6. Department A's cost of ending work in process using the weighted average method would be
a. $8,741
b. $6,192
c. $3,840
d. $10,261
The following information is available for Department Z for the month of July:
|
|
Units
|
Cost
|
|
Work in process, July 1 (70% complete)
|
5,000
|
|
|
Direct materials
|
|
$ 6,000
|
|
Direct labor
|
|
3,000
|
|
Manufacturing overhead
|
|
4,000
|
|
Total work in process, July 1
|
|
$13,000
|
|
Started in production during July
|
20,000
|
|
|
Costs added:
|
|
|
|
Direct materials
|
|
$18,000
|
|
Direct labor
|
|
8,000
|
|
Manufacturing overhead
|
|
10,000
|
|
Total costs added during July
|
|
$36,000
|
|
Work in process, July 31, (80% complete)
|
2,000
|
|
Materials are added at the beginning of the process. (Round unit costs to two decimal places.)
Materials are added at the beginning of the process. (Round unit costs to two decimal places.)
|
PARTICULARS
|
MATERIALS
|
CONVERSION
|
|
Opening WIP
|
-
|
(5000*(100-70)%)=1500
|
|
Units completed in this process
(20000-2000)
|
18000
|
18000
|
|
Closing WIP
|
2000
|
(2000*80%)=1600
|
|
Equivalent production
|
20000
|
21100
|
|
cost
|
$18,000
|
$18,000
|
|
Cost Per Equivalent units
|
=18000/20000=$0.90
|
=18000/21100=$0.85
|
|
Cost of goods transferred:
|
|
|
|
Opening
Completed and transferred
|
(13000)+(1500*0.85)=14275
(18000)*(0.90+0.85)=31500
|
=45775
|
|
Closing WIP
|
(2000*0.90)+(1600*0.85)
|
=3160
|
5. Refer to Figure 6-7. Department Z's cost per equivalent unit of production for conversion costs using the FIFO method would be
a. $1.18
b. $1.02
c. $0.85
d. $0.73
6. Refer to Figure 6-7. Department Z's cost of goods transferred out using the FIFO method would be
a. $45,775
b. $45,540
c. $44,500
d. $40,250
7. Refer to Figure 6-7. Department Z's cost of ending work in process using the FIFO method would be
a. $3,960
b. $3,552
c. $3,500
d. $3,160