Managerial Accounting
Managerial Accounting
7th Edition
ISBN: 9781260247886
Author: Wild
Publisher: MCG
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Chapter 3, Problem 20E

1.

To determine

To compute: Number of transferred out goods and work in process (ending).

1.

Expert Solution
Check Mark

Explanation of Solution

Number of transferred out goods is 23,000 units.

Hence, number of transferred out goods is 23,000 units.

Given,
Work in process (opening) is 2,000 units.
New started units this month are 28,000 units.
Number of transferred out goods is 23,000.

Formula to calculate work in process (ending),

    Work in process ( ending )=( Workinprocess(opening) +Newstartedduringthemonth Number of transferred out goods )

Substitute 2,000 units for work in process (opening), 28,000 units for new started this month and 23,000 units fornumber of transferred out goods.

    Work in process ( ending )=2,000+28,00023,000 =7,000

Hence, work in process (ending) is 7,000.

2.

To determine

To compute: Equivalent unit of production according to weighted average method for direct material cost.

2.

Expert Solution
Check Mark

Explanation of Solution

Given,
Completed goods are 23,000 units.
Work in progress (ending) is 7,000 units.

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

    Equivalentunitofproduction(directmaterial)=( Completedgoods +Workinprogress(ending) )

Substitute 23,000 units for completed goods and 7,000 units for work in progress (ending).

    Equivalentunitofproduction(directmaterial)=23,000+7,000 =30,000

Hence, equivalent unit of production (direct material) is 30,000 units.

Working notes:

Calculation for work in progress (ending),

    Workinprogress(ending)=Unfinsihedgoods×Finishedpercentage =7,000× 100 100 =7,000

3.

To determine

To compute: Equivalent unit of production according to weighted average method for conversion cost.

3.

Expert Solution
Check Mark

Explanation of Solution

Given,
Completed goods are 23,000 units.
Work in progress (ending) is 2,800 units.

Formula to calculate equivalent unit of production (conversion),

    Equivalentunitofproduction(conversion)=( Completedgoods +Workinprogress(ending) )

Substitute 23,000 units for completed goods and 2,800 units for work in progress (ending).

    EquivalentUnitofProduction=23,000+2,800 =25,800

Hence, equivalent unit of production (conversion) is 25,800 units.

Working notes:

Calculation for work in progress,

    Workinprogress(ending)=Unfinsihedgoods×Finishedpercentage =7,000× 40 100 =2,800

4.

To determine

To compute: Cost per equivalent unit of production for direct material.

4.

Expert Solution
Check Mark

Explanation of Solution

Given,
Total direct material cost is $420,000.
Total EUP (direct material) is 30,000 units.

Formula to calculate cost per equivalent unit of production,

    CostperEUP(directmaterial)= Totaldirectmaterialcost TotalEUP(directmaterial)

Substitute, $420,000 for total direct material cost and 30,000 units for total EUP (direct material) in the above equation.

    CostperEUP(directmaterial)= $420,000 30,000 =$14

Hence, cost per EUP (direct material) is $14.

Working notes:

Calculation for total direct material cost,

    Totaldirectmaterialcost=( Directmaterialintheopeninginventory +Directmatrialusedduringthemonth ) =$45,000+$375,000 =$420,000

5.

To determine

To compute: Cost per equivalent unit of production for conversion.

5.

Expert Solution
Check Mark

Explanation of Solution

Given,
Total conversion cost is $397,320.
Total EUP (conversion) is 25,800 units.

Formula to calculate cost per equivalent unit of production,

    CostperEUP(conversion)= Totaldirectmaterialcost TotalEUP(conversion)

Substitute $397,320 for total conversion cost and 25,800 units for total EUP (conversion).

    CostperEUP(conversion)= $397,320 25,800 =$15.4

Hence, cost per EUP (conversion) is $15.4.

Working notes:

Calculation for total direct material cost,

    TotalConversionCost=( ConversionCostIntheopeninginventory +ConversionCostusedduringthemonth ) =$56,320+$341,000 =$397,320

6.

To determine

To compute: Cost of goods transferred out.

6.

Expert Solution
Check Mark

Explanation of Solution

Given,
Direct material cost for completed goods is $322,000.
Conversion cost for completed goods is $354,200.

Formula to calculate the cost of goods transferred out,

    Costoftransferrredoutgoods=( Directmaterialcostforcompletedgoods +Conversioncostforcompletedgoods )

Substitute, $322,000 for direct material cost for completed goods and $354,200 for conversion cost for completed goods in the above equation.

    Costoftransferrredoutgoods=$322,000+$354,200 =$676,200

Hence, cost of unit completed is $676,200.

Working notes:

Calculation for direct material cost for completed goods,

    Directmaterialcostforcompletedgoods=( Completedgoods ×CostperEUP(directmaterial) ) =23,000×$14 =$322,000

Calculation for conversion cost for completed goods,

    Conversioncostforcompletedgoods=( Completedgoods ×CostperEUP(conversion) ) =23,000×$15.4 =$354,200

7.

To determine

To compute: Cost of work in process (end).

7.

Expert Solution
Check Mark

Explanation of Solution

Given,
Direct material cost for work in process (end) is $98,000.
Conversion cost for work in process (end) is $43,120.

Formula to calculate the cost of work in process (end),

    Costofwork in process ( end )=( Directmaterialcostforcompletedgoods +Conversioncostforcompletedgoods )

Substitute $98,000 for direct material cost for work in process (end) and $43,120 for conversion cost for work in process (end).

    Costofwork in process ( end )=$98,000+$43,120 =$141,120

Hence, cost of work in process (end) is $141,120.

Working notes:

Calculation for direct material cost for work in process (end),

    [ Directmaterialcostfor work in process ( end ) ]=[ EUP(directmaterial)forwork in process ( end ) ×CostperEUP(directmaterial) ] =7,000×$14 =$98,000

Calculation for conversion cost for work in process (end),

    [ Conversioncostfor work in process ( end ) ]=[ EUP(conversion)forwork in process ( end ) ×CostperEUP(conversion) ] =2,800×$15.4 =$43,120

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Chapter 3 Solutions

Managerial Accounting

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