PROBLEM Landers Company
Landers Company has the following information available for May: Beginning Work Work in Process Inventory (!" complete as to conversion# %tarted &nding Work in Process Inventory ('" complete as to conversion#
10,000
120,000 30,000
Beginning Work in Process Inventory Costs: $ Material Conversion Current Period Costs: Material Conversion
$nits $nits
$nits
2,100 2,030
$ 33,000 109,695
)ll material is added at the start of prod$ction and all prod$cts completed are transferred o$t* +* ,efer to Landers Company* Prepare an e-$ivalent $nits sched$le $sing the (a# .I./ and (b# weighted weighted average method*
* ,efer to Landers Landers Company* Company* Prepare a sched$le showing the the comp$tation comp$tation for cost per e-$ivalent $nit ass$ming the (a# .I./ and (b# weighted average method*
'* ,efer to Landers Landers Company* Company* Prepare a sched$le showing the the assignment of costs ass$ming the the (a# .I./ and (b# weighted average method* 0* 1he %weet 1em 1emptati ptations ons Company Company has two processin processing g departments2 departments2 Cooking Cooking and Packaging Packaging** Ingredients are placed into prod$ction at the beginning of the process in Cooking2 where the y are formed into vario$s shapes* When finished2 they are transferred into Packaging2 where the cand y is placed into heart and t$3edo t$3edo bo3es and covered with foil* )ll )ll material added in Packaging Packaging is considered as one material for convenience* %ince the bo3es contain a variety of candies2 they are considered partially complete $ntil filled with the appropriate assortment* 1he following information relates to the two departments for .ebr$ary 45: Cooking Department: 4,500 $nits Beginning WIP ('" complete as to conversion# 15,000 6nits started this period $nits 2,400 &nding WIP (7" complete as to conversion# $nits Packaging Department: 1,000 $nits Beginning WIP (8" (8" complete as to material2 9" complete as to conversion# ? 6nits started d$ring period 500 $nits &nding WIP (9" complete as to material and 9" complete as to conversion# a* etermine e-$ivalent $nits of prod$ction for both departments $sing the weighted average method* b* etermine e-$ivalent e-$ivalent $nits of prod$ction prod$ction for both departments $sing $sing the .I./ method*
+9
I.:
iffic$lt
/B;: 7<'27<0
!* 1he following costs were acc$m$lated by epartment of =$ghes Company d$ring )pril: Cost 1ransferred from ept* + Beginning Inventory C$rrent Period Cost
Material
$ 17,050
Conversion Costs
1otal
$ 5,450
$ 22,500
184,000
$ 34,000
104,000
322,000
$ 201,050
$ 34,000
$ 109,450
$344,500
Prod$ction for )pril in epartment (in $nits#: WIP<)pril + Complete period transferred WIP<)pril '
2 7" complete 2 !2 0" complete
Materials are not added in epartment $ntil the very end of processing epartment * Required: Comp$te the cost of $nits completed and the val$e of ending WIP for:
a*
Weighted average inventory ass$mption
b*
.I./ inventory ass$mption
7* 1he form$la for a chemical compo$nd re-$ires one po$nd of Chemical 4 and one po$nd of Chemical >* In the simplest sense2 one po$nd of Chemical 4 is processed in epartment ) and transferred to epartment B for f$rther processing where one po$nd of Chemical > is added when the process is ! percent complete* When the processing is complete in epartment B2 the finished compo$nd is transferred to finished goods* 1he process is contin$o$s2 operating 0 ho$rs a day* ?ormal spoilage occ$rs in epartment )* .ive percent of material is lost in the first few seconds of processing* ?o spoilage occ$rs in epartment B* 1he following data are available for the month of )$g$st 47: ept* ) 6nits in process2 )$g$st + %tage of completion of beginning inventory 6nits started or transferred in 6nits transferred o$t 6nits in process2 )$g$st '+ %tage of completion of ending inventory 6nits of Chemical > added in epartment B
ept* B
8,000
10,000
3/4
3/10
50,000
?
46,500
?
?
?
1/3
1/5 44,500
Required: a* Prepare a sched$le showing finished e-$ivalents for Chemical 4 and for conversion cost for epartment ) $sing the .I./ method* b* etermine for epartment B the n$mber of $nits of good prod$ct completed d$ring )$g$st and the n$mber of $nits in process on )$g$st '+* c* Prepare a sched$le for epartment B showing finished e-$ivalents for preceding department cost2 cost of Chemical >2 and conversion cost $sing the .I./ method*
+9+
+9
5* @$igley Company man$fact$res a specialiAed prod$ct* epartment adds new material to the $nits received from epartment + at the end of process* ) normal loss occ$rs early in processing* Prod$ction and cost data for epartment for the month of %eptember are as follows: Prod$ction record (in $nits#: In process2 %eptember +<5!" complete for processing cost ,eceived from epartment + Completed and transferred to finished goods Lost in processing (normal# In process2 %eptember '<' complete for process cost
Cost ,ecord: Work in process inventory2 %eptember +: Preceding department cost Processing cost Cost from preceding department in %eptember Material cost for %eptember Processing cost for %eptember
4,000 20,000 16,000 2,000 6,000
$
620
2,000
$2,620 1,800 4,800 10,200
Required: etermine the following for epartment $nder (a# weighted average the method of costing and (b# the .I./ method of costing: (+# $nit costs for each cost component2 (# cost of prod$ction transferred to finished goods2 ('# cost of work in process inventory of %eptember '*
9* Copperfield Man$fact$ring employs a weighted average process costing system for its prod$cts* /ne prod$ct passes thro$gh three departments (Molding2 )ssembly2 and .inishing# d$ring prod$ction* 1he following activity took place in the .inishing epartment d$ring )pril 37* 4,200
6nits in beginning inventory 6nits transferred in from )ssembly 6nits spoiled ood $nits transferred o$t
42,000 2,100 33,600
1he costs per e-$ivalent $nit of prod$ction for each cost fail$re area as follows: $5.00
Cost of prior departments ,aw material Conversion 1otal cost per &6P
1.00 3.00 $9.00
,aw material is added at the beginning of the .inishing process witho$t changing the n$mber of $nits being processed* Work in process inventory was 0 percent complete as to conversion on )pril '* )ll spoilage was discovered at final inspection* /f the total $nits spoiled2 +279 were within normal limits* Required: a* Calc$late the e-$ivalent $nits of prod$ction b* etermine the cost of $nits transferred o$t of .inishing c* etermine the cost of ending Work in Process Inventory d* 1he portion of the total transferred in cost associated with beginning Work in Process Inventory amo$nted to D+928* What is the c$rrent period cost that was transferred in from )ssembly to .inishingE e* etermine the cost associated with abnormal spoilage for the month*
+9'
8* )shcroft Ind$stries man$fact$res wood f$rnit$re* In the Lamination epartment2 varnish is added when the goods are 7 percent complete as to overhead* 1he $nits that are spoiled d$ring processing are fo$nd $pon inspection at the end of prod$ction* %poilage is considered discrete* Production Data or May !"#$ Beginning inventory (9" complete as to labor2 5" complete as to overhead# 1ransferred in d$ring month &nding inventory (0" complete as to labor2 " complete as to overhead# ?ormal spoilage (fo$nd d$ring final -$ality inspection# )bnormal spoilage
1,000
$nits
7,450
$nits $nits $nits $nits
1,500 100 200
)ll other $nits were transferred to finished goods Cost Data or May !"#$ Beginning work in process inventory: Prior department costs Garnish irect labor /verhead C$rrent period costs: Prior department costs Garnish irect labor /verhead
$7,510 950 2,194 5,522
$ 16,176
$68,540 7,015 23,000 56,782
155,337 $171,513
1otal costs to acco$nt for
Required: etermine the proper disposition of the May 49 costs for the Laminating epartment $sing the weighted average method*
+90
+* Consider the following data for a cooking department for the month of ;an$ary: Physical 6nits 11,000
Work in process2 beginning inventoryH %tarted d$ring c$rrent period 1o acco$nt for ood $nits completed and transferred o$t d$ring c$rrent period: .rom beginning work in process %tarted and completed ood $nits completed %poiled $nits Work in process2 ending inventory )cco$nted for
74,000 85,000
11,000 50,000 61,000 8,000 16,000 85,000
Hirect material2 +" completeF conversion costs2 !" complete irect material2 +" completeF conversion costs2 5!" complete Inspection occ$rs when prod$ction is + percent completed* ?ormal spoilage is ++ percent of good $nits completed and transferred o$t d$ring the c$rrent period* 1he following cost data are available: Work in process2 beginning inventory: irect material Conversion costs Costs added d$ring c$rrent period: irect material Conversion costs Costs to acco$nt for
$220,000 30,000
$
250,000
1,480,000
942,000
$2,672,000
Required: Prepare a detailed cost of prod$ction report* 6se the .I./ method* isting$ish between normal and abnormal spoilage*
+9!
++* L$mberton Ind$stries has two departments* epartment + $ses .I./ costing and epartment $ses weighted average* 6nits are introd$ced into the process in epartment + (this is the only material added in epartment +#* %poilage occ$rs contin$o$sly thro$gh the department and normal spoilage sho$ld not e3ceed + percent of the $nits started* epartment adds material (packaging# at the 5! percent co mpletion pointF this material does not ca$se an increase in the n$mber of $nits being processed* ) -$ality control inspection takes place when the goods are 9 percent complete* %poilage sho$ld not e3ceed ! percent of the $nits transferred in from epartment +* 1he following prod$ction cost data are applicable for operations for )$g$st 45: Department % Production Data Beginning inventory (7!" complete# 6nits started 6nits completed 6nits in ending inventory (0" complete# Department % Cost Data Beginning inventory: Material Conversion C$rrent period: Material Conversion 1otal costs to acco$nt for Department ! Production Data Beginning inventory (8" complete# 6nits transferred in 6nits completed 6nits in ending inventory (" complete# Department ! Cost Data Beginning inventory: 1ransferred in Material Conversion C$rrent period: 1ransferred in MaterialJ Conversion 1otal costs to acco$nt for
1,000 25,000 22,000 2,800
$ 1,550 2,300
$
3,850
$38,080 78,645
116,725 $120,575
8,000 22,000 24,000 4,500
$40,800 24,000 4,320
$ 69,120*
$113,700 53,775 11,079
178,554 $247,674
H1his may not be the same amo$nt determined for epartment +F ignore any difference and $se this fig$re* Required: a* Comp$te the e-$ivalent $nits of prod$ction in each department* b* etermine the cost per e-$ivalent $nit in each department and comp$te the cost transferred o$t2 the cost in ending inventory2 and the cost of spoilage (if necessary#*
+*/range Company man$fact$res a single prod$ct* )ll material is added at the beginning of the process*
+97
Costs Beginning inventory C$rrent period 1otal costs
Material
Conversion
$ 30,000
$
1otal
3,600
$
33,600
885,120
335,088
1,220,208
$915,120
$338,688
$1,253,808
6?I1% Beginning inventory ('" complete< conversion# %tarted Completed &nding inventory (5" complete
6,000
$nits
180,000
$nits $nits $nits $nits
152,000 20,000 4,800
Required: .ind ending WIP inventory2 abnormal loss2 and C/M* )ss$me that2 for conversion costs2 abnormal shrinkage is 7 percent*
+'*elightf$l >og$rt Company prod$ces yog$rt in two departments
BWIP (+" fr$it2 " container2 '" CC# allons transferred in allons of fr$it added &WIP (+" fr$it2 " container2 7" CC# allons transferred o$t )bnormal spoilage BWIP Costs: 1ransferred In .r$it CC Current Costs: 1ransferred In .r$it Containers CC 1otal Costs
gallons
5,500 1,200 1,700
gallons
9,000 1,000
$
9,700 10,500 15,000
12,400 54,000 11,000
98,000
$ 210,600
Prepare a cost of prod$ction report for /ctober 4!* 1he company $ses weighted average* (ocking Company
1he following information is available for =ocking Company for March 49* )ll materials are added at the start of prod$ction* 8,000
Beginning Work in Process: (9" complete#
+95
$nits
35,000
%tarted ?ormal spoilage (contin$o$s# )bnormal spoilage &nding Work in Process: (!!" complete# 1ransferred o$t Beginning Work in Process Costs: Material Conversion C$rrent Costs: Material Conversion 1otal Costs
6,000 2,500 15,000 19,500
$
$nits $nits $nits $nits $nits
14,000 45,000 50,000
175,000 $ 284,000
+0* ,efer to =ocking Company* Prepare a cost of prod$ction report for March $sing .I./*
+!* ,efer to =ocking Company* Prepare the cost of prod$ction report ass$ming the weighted average method*
+99
