Compute the cost of goods transferred out in August and the cost of work-in-process ending inventory.
Explanation of Solution
Cost of units in ending work-in-
Cost of ending units in work-in-process is found out by multiplying equivalent unit in ending inventory by equivalent cost of ending inventory with respect to materials cost and conversion costs.
Conversion costs:
The total production cost or converting the product from raw material to final product that is ready to be transferred as finished goods, work-in-process or has started are taken into consideration for conversion costs.
Compute the total units for prior department, materials and conversion costs:
Particulars | Physical units | Prior department | Materials | Conversion costs |
Beginning work-in-process inventory | 12,500 | |||
Units started this period | 127,500 | |||
Total units | 140,000 | |||
Completed and transferred out | ||||
Beginning work-in-process inventory | 12,500 | 0 | 5,000 (1) | 7,500(2) |
Started and currently completed | 107,500 | 107,500 | 107,500 | 107,500 |
Units in ending work-in-process inventory | 20,000 | 20,000 | 18,000 (3) | 10,000 (4) |
Total units | 140,000 | 127,500 | 130,500 | 125,000 |
Table: (1)
Compute the cost per equivalent unit for prior department, materials and conversion costs:
Particulars | Total | Prior department | Materials | Conversion costs |
Costs in beginning work-in-process inventory | $ 323,400 | $ 98,000 | $ 164,400 | $ 61,000 |
Current period costs | $ 3,306,600 | $ 2,142,000 | $ 939,600 | $ 225,000 |
Total costs | $ 3,630,000 | $ 2,240,000 | $ 1,104,000 | $ 286,000 |
Cost per equivalent unit | ||||
Prior department | $ 16.80(5) | |||
Materials | $ 7.20(6) | |||
Conversion | $ 1.80(7) | |||
Table: (2)
Compute the total costs for prior department, materials and conversion costs:
Particulars | Total | Prior department | Materials | Conversion costs |
Transferred out: | ||||
Costs from beginning inventory | $ 323,400 | $ 98,000 | $ 164,400 | $ 61,000 |
Current costs beginning work-in-process inventory | ||||
Prior department | $ 0 | $ 0 | ||
Materials | $ 36,000 | $ 36,000(8) | ||
Conversion | $ 13,500 | $ 13,500(9) | ||
Total costs | $ 372,900 | |||
Current costs of units started and completed | ||||
Prior department | $ 1,806,000 | $ 1,806,000(10) | ||
Materials | $ 774,000 | $ 774,000(11) | ||
Conversion | $ 193,500 | $ 193,500(12) | ||
Total costs of units started and completed | $ 2,773,500 | |||
Total costs | $ 3,146,400 | $ 1,806,000 | $ 810,000 | $ 207,000 |
Current costs work-in-process ending inventory | ||||
Prior department | $ 336,000 | $ 336,000(13) | ||
Materials | $ 129,600 | $ 129,600(14) | ||
Conversion | $ 18,000 | $ 18,000(15) | ||
Total ending work-in-process inventory | $ 483,600 | |||
Total costs accounted for | $ 3,630,000 | $ 2,240,000 | $ 1,104,000 | $ 286,000 |
Table: (3)
Working note 1:
Compute the units completed and transferred out from beginning inventory of materials:
Working note 2:
Compute the units completed and transferred out from beginning inventory of conversion costs:
Working note 3:
Compute the units in ending work-in-process inventory for materials:
Working note 4:
Compute the units in ending work-in-process inventory for conversion costs:
Working note 5:
Compute the cost per equivalent unit for prior department costs:
Working note 6:
Compute the cost per equivalent unit for prior department costs:
Working note 7:
Compute the cost per equivalent unit for prior department costs:
Working note 8:
Compute the current costs added to complete beginning work-in-process inventory:
Working note 9:
Compute the current costs added to complete beginning work-in-process inventory:
Working note 10:
Compute the current costs of units started and completed:
Working note 11:
Compute the current costs of units started and completed:
Working note 12:
Compute the current costs of units started and completed:
Working note 13:
Compute the costs assigned to ending work-in-process inventory for materials:
Working note 14:
Compute the costs assigned to ending work-in-process inventory for materials:
Working note 15:
Compute the costs assigned to ending work-in-process inventory for materials:
Want to see more full solutions like this?
Chapter 8 Solutions
Fundamentals Of Cost Accounting (6th Edition)
- Precision Inc. manufactures wristwatches on an assembly line. The work in process inventory as of March 1 consisted of 1,000 watches that were complete as to materials and 75% complete as to labor and overhead. The March 1 work in process costs were as follows: During the month, 10,000 units were started and 9,500 units were completed. The 1,500 units of ending inventory were complete as to materials and 25% complete as to labor and overhead. The costs for March were as follows: Calculate: a. Equivalent units for material, labor, and overhead, using the weighted average cost method b. Unit costs for materials, labor, and overhead c. Cost of the units completed and transferred d. Detailed cost of the ending inventory e. Total of all costs accounted forarrow_forwardNarwhal Swimwear has a beginning work in process inventory of 13,500 units and transferred in 130,000 units before ending the month with 14,000 units that were 100% complete with regard to materials and 30% complete with regard to conversion costs. The cost per unit of material is $5.80 and the cost per unit for conversion is $8.20 per unit. Using the weighted-average method, what is the amount of material and conversion costs assigned to the department for the month?arrow_forwardKokomo Kayak Inc. uses the process cost system. The following data, taken from the organizations books, reflect the results of manufacturing operations during the month of March: Production Costs Work in process, beginning of period: Costs incurred during month: Production Data: 18,000 units finished and transferred to stockroom. Work in process, end of period, 3,000 units, two-thirds completed. Required: Prepare a cost of production summary for March.arrow_forward
- Kimbeth Manufacturing uses a process cost system to manufacture dust density sensors for the mining industry. The following information pertains to operations for the month of May: The beginning inventory was 60% complete for materials and 20% complete for conversion costs. The ending inventory was 90% complete for materials and 40% complete for conversion costs. Costs pertaining to the month of May are: Beginning inventory costs: materials, 54,560; direct labor, 20,320; and factory overhead, 15,240. Costs incurred during May: materials used, 468,000; direct labor, 182,880; and factory overhead, 391,160. Using the first-in, first-out (FIFO) method, the equivalent units of production for conversion costs are: a. 101,600 units. b. 85,600 units. c. 98,400 units. d. 88,800 units.arrow_forwardDublin Brewing Co. uses the process cost system. The following data, taken from the organizations books, reflect the results of manufacturing operations during October: Production Costs Work in process, beginning of period: Costs incurred during month: Production Data: 13,000 units finished and transferred to stockroom Work in process, end of period, 2,000 units one-half completed Required: Prepare a cost of production summary for October.arrow_forwardHolmes Products, Inc., produces plastic cases used for video cameras. The product passes through three departments. For April, the following equivalent units schedule was prepared for the first department: Costs assigned to beginning work in process: direct materials, 90,000; conversion costs, 33,750. Manufacturing costs incurred during April: direct materials, 75,000; conversion costs, 220,000. Holmes uses the weighted average method. Required: 1. Compute the unit cost for April. 2. Determine the cost of ending work in process and the cost of goods transferred out.arrow_forward
- During March, the following costs were charged to the manufacturing department: $14886 for materials; $14,656 for labor; and $13,820 for manufacturing overhead. The records show that 30,680 units were completed and transferred, while 2,400 remained in ending inventory. There were 33,080 equivalent units of material and 31,640 of conversion costs. Using the weighted-average method, what is the cost of inventory transferred and the balance in work in process inventory?arrow_forwardPetrini Products Co. has two departments: Mixing and Cooking. At the beginning of the month, Cooking had 4,000 units in process with costs of 8,600 from Mixing, and its own departmental costs of 500 for materials, 1,000 for labor, and 2,500 for factory overhead. During the month, 10,000 units were received from Mixing with a cost of 25,000. Cooking incurred costs of 4,250 for materials, 8,500 for labor, and 21,250 for factory overhead, and finished 12,000 units. At the end of the month, there were 2,000 units in process, one-half completed. Required: 1. Determine the unit cost for the month in Cooking. 2. Determine the adjusted weighted average unit cost for all units received from Mixing. 3. Determine the unit cost of goods finished. 4. Determine the accumulated cost of the goods finished and of the ending work in process. (Round unit costs to three decimal places.)arrow_forwardArdt-Barger has a beginning work in process inventory of 5.500 units and transferred in 25,000 units before ending the month with 3.000 u flits that were 100% complete with regard to materials and 80% complete with regard to conversion costs. The cost per unit of material is $5.45, and the cost per unit for conversion is $6.20 per unit, Using the weighted-average method, prepare the companys process cost summary for the month.arrow_forward
- Foamy Inc. manufactures shaving cream and uses the weighted average cost method. In November, production is 14,800 equivalent units for materials and 13,300 units for labor and overhead. During the month, materials, labor, and overhead costs were as follows: Beginning work in process for November had a cost of 11,360 for materials, 11,666 for labor, and 9,250 for overhead. Compute the following: a. Weighted average cost per unit for materials b. Weighted average cost per unit for labor c. Weighted average cost per unit for overhead d. Total unit cost for the montharrow_forwardThe cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning February 1 would be 3,150,000, and total direct labor costs would be 1,800,000. During February, the actual direct labor cost totalled 160,000, and factory overhead cost incurred totaled 283,900. a. What is the predetermined factory overhead rate based on direct labor cost? b. Journalize the entry to apply factory overhead to production for February. c. What is the February 28 balance of the account Factory OverheadBlending Department? d. Does the balance in part (c) represent over- or underapplied factory overhead?arrow_forwardKraus Steel Company has two departments, Casting and Rolling. In the Rolling Department, ingots From the Casting Department are rolled into steel sheet. The Rolling Department received 4,000 tons from the Casting Department in October. During October, the Rolling Department completed 3,900 tons, including 200 tons of work in process on October 1. The ending work in process inventory on October 31 was 300 tons. How many tons were started and completed during October?arrow_forward
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage LearningManagerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubPrinciples of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage Learning
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegeFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,