Financial and Managerial Accounting (Looseleaf) (Custom Package)
Financial and Managerial Accounting (Looseleaf) (Custom Package)
6th Edition
ISBN: 9781259754883
Author: Wild
Publisher: MCG
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Chapter 16, Problem 6PSB

1.

To determine

To compute: Number of units transferred to finished goods inventory.

1.

Expert Solution
Check Mark

Explanation of Solution

Given,
Work in process (opening) is 62,500 units.
Units started and completed this month are 175,000 units.

Formula to calculate units transferred to finished goods,

    Unitstransferredtofinishedgoods=( Workinprocess(opening) +Unitsstartedandcompletedthismonth )

Substitute 62,500 units for work in process (opening) and 175,000 units for units started and completed this month.

    Unitstransferredtofinishedgoods=62,500+175,000 =237,500

Hence, units transferred to finished goods are 237,500 units.

2.

To determine

To compute: Equivalent unit of production according to FIFO method.

2.

Expert Solution
Check Mark

Explanation of Solution

For direct material,

Given,
Work in progress (beginning) is 37,500 units.
Completed goods are 175,000 units.
Work in progress (end) is 61,000 units.

Formula to calculate equivalent unit of production (direct material),

    Equivalentunitofproduction( direct material )=( Workinprogress(beginning) +Completedgoods +Workinprogress(end) )

Substitute 37,500 units for work in progress (beginning), 175,000 units for completed goods and 61,000 units for work in progress (end).

    Equivalentunitofproduction( direct material )=37,500+175,000+61,000 =273,500

Hence, equivalent unit of production (direct material) is 273,500 units.

Working notes:

Calculation for work in progress (beginning),

    Workinprogress( beginning )=Unfinsihedgoods×Finishedpercentage =62,500× 60 100 =37,500

Calculation for work in progress (end),

    Workinprogress( end )=Unfinsihedgoods×Finishedpercentage =76,250× 80 100 =61,000

For Conversion:

Given,
Work in progress (beginning) is 12,500 units.
Completed goods are 175,000 units.
Work in progress (end) is 15,250 units.

Formula to calculate equivalent unit of production (Conversion),

    Equivalentunitofproduction( Conversion )=( Workinprogress(beginning) +Completedgoods +Workinprogress(end) )

Substitute 12,500 units for work in progress (beginning), 175,000 units for completed goods and 15,250 units for work in progress (end).

    Equivalentunitofproduction(Conversion)=12,500+175,000+15,250 =202,750

Hence, equivalent unit of production (conversion) is 202,750 units.

Working notes:

Calculation for work in progress (beginning),

    Workinprogress( beginning )=Unfinsihedgoods×Finishedpercentage =62,500× 20 100 =12,500

Calculation for work in progress (end),

    Workinprogress( end )=Unfinsihedgoods×Finishedpercentage =76,250× 20 100 =15,250

3.

To determine

To compute: Cost per equivalent unit of production.

3.

Expert Solution
Check Mark

Explanation of Solution

For direct material:

Given,
Total direct material cost is $683,750.
Total EUP (Direct Material) is 273,500 units.

Formula to calculate cost per equivalent unit of production,

    CostperEUP(directmaterial)= Totaldirectmaterialcost TotalEUP(directmaterial)

Substitute, $683,750 for total direct material cost and 273,500 units for total EUP (direct material) in the above equation.

    CostperEUP(directmaterial)= $683,750 273,500 =$2.5

Hence, cost per EUP (direct material) is $2.5.

For conversion:

Given,
Total conversion cost is $446,050.
Total EUP (Conversion) is 202,750 units.

Formula to calculate cost per equivalent unit of production,

    CostperEUP(conversion)= Totaldirectconversioncost TotalEUP(conversion)

Substitute, $446,050 for total conversion cost and 202,750 units for total EUP (Conversion) in the above equation.

    CostperEUP(conversion)= $446,750 202,750 =$2.20

Hence, cost per EUP (conversion) is $2.20.

4.

To determine

To prepare: Cost assigned to finished and work in process (ending).

4.

Expert Solution
Check Mark

Explanation of Solution

Prepare production cost summary:

T. Company-Production Department

Assign Cost (FIFO method)

For the month ended May 31, 20XX

Cost Assignment

Amount

($)

Amount

($)

Cost of units completed and transferred out

Cost of work in process (beginning)

Direct Material

99,075

Conversion

53,493

152,568

Cost to complete work in process (beginning)

Direct Material

93,750

Conversion

27,500

121,250

Cost of started and completed units

Direct materials

437,500

Conversion

385,000

822,500

Total cost of units finished during this period

1,096,318

Cost of work in process (ending)

Direct materials

152,500

Conversion

33,550

186,050

Total cost

1,282,368

Table(1)

Hence, total cost of transferred goods and work in process (ending) is $1,096,318 and $186,050, respectively.

Working notes:

Calculation of complete work in process (beginning),

Calculation for direct material,

    Directmaterial=( NumberofEquivalentunitofproduction ×CostperEquivalentunitofproduction ) =37,500×$2.50 =$93,750

Calculation for conversion,

    Directlabor=( Numberofequivalentunitofproduction ×Costperequivalentunitofproduction ) =12,500×$2.20 =$27,500

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Chapter 16 Solutions

Financial and Managerial Accounting (Looseleaf) (Custom Package)

Ch. 16 - Prob. 6DQCh. 16 - Prob. 7DQCh. 16 - Prob. 8DQCh. 16 - Prob. 9DQCh. 16 - Prob. 10DQCh. 16 - Prob. 11DQCh. 16 - Prob. 12DQCh. 16 - 13. List the four steps in accounting for...Ch. 16 - 14. APPLE Companies such as Apple commonly...Ch. 16 - 15. GOOGLE Are there situations where Google can...Ch. 16 - Prob. 16DQCh. 16 - Process vs. job order operations C1 For each of...Ch. 16 - Prob. 2QSCh. 16 - Prob. 3QSCh. 16 - Physical flow reconciliation C2 The following...Ch. 16 - Prob. 5QSCh. 16 - Prob. 6QSCh. 16 - Prob. 7QSCh. 16 - Prob. 8QSCh. 16 - Prob. 9QSCh. 16 - Prob. 10QSCh. 16 - Prob. 11QSCh. 16 - Prob. 12QSCh. 16 - Prob. 13QSCh. 16 - Prob. 14QSCh. 16 - Prob. 15QSCh. 16 - Prob. 16QSCh. 16 - Prob. 17QSCh. 16 - Prob. 18QSCh. 16 - Prob. 19QSCh. 16 - Prob. 20QSCh. 16 - Prob. 21QSCh. 16 - Prob. 22QSCh. 16 - Prob. 23QSCh. 16 - Prob. 24QSCh. 16 - Prob. 25QSCh. 16 - Prob. 26QSCh. 16 - Process Cost Summary C3 Anheuser-Busch In Bev is...Ch. 16 - Prob. 1ECh. 16 - Prob. 2ECh. 16 - Prob. 3ECh. 16 - Prob. 4ECh. 16 - Prob. 5ECh. 16 - Prob. 6ECh. 16 - Prob. 7ECh. 16 - Prob. 8ECh. 16 - Prob. 9ECh. 16 - Prob. 10ECh. 16 - Prob. 11ECh. 16 - Prob. 12ECh. 16 - Exercise 16-13AFIFO: Completing a process cost...Ch. 16 - Prob. 14ECh. 16 - Prob. 15ECh. 16 - Exercise 16-16 Weighted average: Process cost...Ch. 16 - Prob. 17ECh. 16 - Prob. 18ECh. 16 - Prob. 19ECh. 16 - Prob. 20ECh. 16 - Prob. 21ECh. 16 - Prob. 22ECh. 16 - Prob. 23ECh. 16 - Prob. 24ECh. 16 - Prob. 25ECh. 16 - Prob. 26ECh. 16 - Exercise 16-27 Hybrid Costing System A2 Explain a...Ch. 16 - Prob. 1PSACh. 16 - Prob. 2PSACh. 16 - Prob. 3PSACh. 16 - Prob. 4PSACh. 16 - Problem 16-5AA FIFO: Process cost summary;...Ch. 16 - Prob. 6PSACh. 16 - Prob. 7PSACh. 16 - Prob. 1PSBCh. 16 - Prob. 2PSBCh. 16 - Prob. 3PSBCh. 16 - Problem 16-4B Weighted average: Process cost...Ch. 16 - Problem 16-5BA FIFO: Process cost summary;...Ch. 16 - Prob. 6PSBCh. 16 - Prob. 7PSBCh. 16 - Prob. 16SPCh. 16 - Prob. 16CPCh. 16 - Prob. 1GLPCh. 16 - Prob. 1BTNCh. 16 - Prob. 2BTNCh. 16 - Prob. 3BTNCh. 16 - Prob. 4BTNCh. 16 - Prob. 5BTNCh. 16 - Prob. 6BTNCh. 16 - Prob. 7BTNCh. 16 - Prob. 8BTNCh. 16 - Prob. 9BTN
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