SOLUTION: 1. ANS: Landers Company Schedule of Equivalent Units for Fifo and Weighted Average May 31, 20X5 FIFO Beginning Work In Process
10,000
Units Started Units to Acct. For Beginning Work In Process Started & Completed
120,000 130,000 10,000 90,000
Ending Work in Process Units Accounted For
30,000 130,000
(a) BWIP S&C EWIP EUP
FIFO Mat. 0 90,000 30,000 120,000
DIF: Moderate
CC 7,500 90,000 9,000 106,500
Weighted Average Beginning Work In Process Units Started Units to Acct. For Transferred Out Ending Work in Process Units Accounted For
(b) Weighted Average Mat. TO EI EUP
100,000 30,000 130,000
10,000 120,000 130,000 100,000 30,000 130,000
CC 100,000 9,000 109,000
OBJ: 6-3,6-4
2. ANS: Landers Company Schedule of Average Cost Per Unit FIFO and Weighted Average May 31, 20X5 (a) FIFO Mat. Costs $33,000 Eq Units 120,000 $.275/eq unit Total cost/eq. unit
DIF: Moderate
CC $109,695 106,500 $ 1.03/eq unit $ 1.305/eq unit
(b) Weighted Average Mat. CC $ 35,100 $111,725 130,000 109,000 $ .27/eq $ 1.025/eq unit unit $ 1.295/eq unit
OBJ: 6-3,6-4
Cost Accounting Foundations and Evolutions
Kinney, Raiborn
3. ANS: Landers Company Schedule of Assigned Costs FIFO and Weighted Average May 31, 20X5 (a) FIFO Beginning Work in Process To complete (7,500 x $1.03) =
$
Started and Completed 90,000 x $1.305 = Total costs transferred out
117,450 $129,305
Ending Work in Process 30,000 x $ .275 = 9,000 x $1.03 =
$
Total costs accounted for (b) Weighted Average Completed 100,000 x $1.295 = Ending Work in Process 30,000 x $ .27 = 9,000 x $1.025 = Total costs accounted for DIF: Difficult
4,130 7,725 $ 11,855
8,250 9,270 $ 17,520 $146,825
$129,500 $
8,100 9,225 $ 17,325 $146,825
OBJ: 6-3,6-4
Cost Accounting Foundations and Evolutions
Kinney, Raiborn
4. ANS: a. Cooking Department Materials Transferred Out Ending Work in Process TOTAL EUP
17,100 2,400 19,500
Conversion Costs 17,100 1,440 18,540
Packaging Department Transferred In Transferred Out Ending Work in Process TOTAL EUP b.
17,600 500 18,100
Materials. 17,600 400 18,000
Conversion Costs 17,600 400 18,000
Cooking Department Materials Beginning Work in Process Transferred from Cooking Ending Work in Process TOTAL EUP
0 12,600 2,400 15,000
Conversion Costs 3,150 12,600 1,440 17,190
Packaging Department Transferred In Beginning Work in Process Transferred from Cooking Ending Work in Process TOTAL EUP DIF: Difficult
0 16,600 500 17,100
Materials 100 16,600 400 17,100
Conversion Costs 200 16,600 400 17,200
OBJ: 6-3,6-4
Cost Accounting Foundations and Evolutions
Kinney, Raiborn
5. ANS: a.
Weighted average inventory assumption Dept 1 20,000 Complete 5,000 Eq-End WIP 25,000 EP-WA
Unit Cost
$201,050 = $8.042 25,000
End WIP
MAT
CC
20,000 0 20,000
20,000 2,000 22,000
$34,000 = $1.70 20,000
$109,450 = $4.975 22,000
= $14.717
= $40,210 = 9,950 $50,160
Dept 1 = 5,000 x $8.042 CC = 2,000 units x $4.975
COGM = $344,500 - $50,160 = $294,340 b.
FIFO inventory assumption
Dept 1
MAT
Complete Eq-End WIP - Eq-Begin
20,000 5,000 (2,000)
20,000 0 0
EP-WA
23,000
20,000
Unit Cost
$184,000 = $8.00 23,000
$34,000 = $1.70 20,000
End WIP
Dept 1 = 5,000 units x $8.00 CC = 2,000 units x $5.00
CC 20,000 2,000 (1,200) 20,800
$104,000 = $5.00 20,800
= $14.70
= $40,000 = 10,000 $50,000
COGM = $344,500 - $50,000 = $294,500 DIF: Moderate
OBJ: 6-3,6-4
Cost Accounting Foundations and Evolutions
Kinney, Raiborn
6. ANS: a.
c. Materials 46,500 9,000 (8,000) 47,500
b.
Conversion Costs 46,500 3,000 (6,000) 43,500
PD
Mat
44,500 12,000 (10,000) 46,500
CC
44,500 0 0 44,500
44,500 2,400 (3,000) 43,900
Since the material in the second department goes in at the 50 percent point and the ending WIP inventory is only at the 20 percent point, units complete is the same as the equivalents of material 44,500, given that units started plus units in beginning WIP are equal to units complete plus ending WIP 10,000 + 46,500 - 44,500 = 12,000 units in ending WIP.
DIF: Moderate
OBJ: 6-3,6-4
7. ANS: Equivalent production Units complete + Equiv. ending WIP = Equiv. prod. average - Equiv. begin. WIP = Equiv. prod. FIFO
16,000 6,000 22,000 (4,000) 18,000
Unit Cost Average
Unit Cost FIFO
TI = $620 + 1,800 22,000
Mat =
$4,800 16,000
TI
= $0.11
Conv. cost
16,000 0 16,000 0 16,000
TI = $1,800 18,000
16,000 4,000 20,000 (3,000) 17,000
= $0.10
Mat = $4,800 = $0.30
CC = $2,000 + 10,200 20,000
End. WIP-WA PD CC
Material
16,000
= $0.30
CC = $10,200 = $0.61
17,000
= $0.60
End. WIP-FIFO 6,000 x $0.11 = 4,000 x $0.61 =
$
660.00 2,440.00 $3,100.00
6,000 x $0.10 = 4,000 x $0.60 =
$
600.00 2,400.00 $3,000.00
Cost of Goods Complete WA $19,420 - 3,100 =
FIFO $16,320.00
$19,420 - 3,000 =
Cost Accounting Foundations and Evolutions
$16,420.00
Kinney, Raiborn
DIF: Moderate
OBJ: 6-3,6-4
MSC: 15-20 min
8. ANS: a. TI Complete + Equiv WIP + Normal Sp + Abnor Sp
33,600 10,500 1,680 420 46,200
b. 33,600 x $9 1,680 x $9
$302,400 15,120 $317,520
c. 10,500 x $5 10,500 x $1 4,200 x $3
$52,500 10,500 12,600 $75,600
Mat 33,600 10,500 1,680 420 46,200
CC 33,600 4,200 1,680 420 39,900
TC = 46,200 x $5 46,200 x $1 39,900 x $3
$231,000 46,200 119,700 $396,900
COGM = $396,900 - 75,600 - 3,780 = $317,520 d. $5 = $18,900 + X 46,200 X = $231,000 - 18,900 = $212,100 e. ABN = 420 x $9 = $3,780 420 x $9 = $3,780 DIF: Moderate
OBJ: 6-3,6-8
Cost Accounting Foundations and Evolutions
Kinney, Raiborn
9. ANS: TI
MAT
6,650 1,500 100 200 8,450
Complete + end + normal + abnormal
DL
6,650 0 100 0 6,750
MOH
6,650 600 100 60 7,410
6,650 300 100 30 7,080
Unit Cost
End WIP DL MOH TI
600 x $3.40 300 x $8.80 1,500 x $9.00
= = =
Abnormal Loss DL MOH TI
60 x $3.40 30 x $8.80 200 x $9.00
= = =
$ 2,040 2,640 13,500 $18,180
$
204 264 1,800 $ 2,268
COGM = $171,513 - 18,180 - 2,268 = $151,065 DIF: Moderate
OBJ: 6-3,6-8
10. ANS: Normal Sp = 11% x 61,000 = 6,710 units Abnormal Sp = 8,000 - 6,710 = 1,290 units Mat CC Complete + End + Ab Sp - Ave - Beg FIFO
61,000 16,000 1,290 78,290 (11,000) 67,290
FIFO
61,000 12,000 1,290 74,290 (2,750) 71,540
Mat =
CC =
WIP Material CC
$1,480,000 67,290
$942,000 71,540
=
16,000 x $22.00 12,000 x $13.17
$352,000
Loss = 1,290 x $35.17
Cost Accounting Foundations and Evolutions
= $22.00
13.17 $35.17
158,040 $510,040 45,369
Kinney, Raiborn
COGM = $2,672,000 - 510,040 - 45,369 = $2,116,591 DIF: Moderate
OBJ: 6-3,6-8
11. ANS: a. 1
Complete
Mat
CC
22,000
22,000
2,800
+ End WIP
24,800
- Beg WIP
(1,000) 23,800
1,120 23,120
(650)
(2,800 x 4)
Mat =
$38,080 23,800
=
$
1.60
CC =
$78,645
=
$
3.50
=
$
4,480
22,470
(1,000 x .65)
End WIP =
22,470
2,800 x $1.60 1,120 x $3.50
3.920 $ 8,400 $112,175
COGM = $120,575 - 8,400
b. 2 TI
Mat
CC
Mat =
$ 77,775 25,500
=
$
$3.05
Complete + End WIP + Normal
24,000 4,500 1,100
24,000 0 1,120
24,000 900 880
CC =
$ 15,399 26,100
=
$
$0.59
+ Abnormal
400 30,000
400 25,500
320 26,100
TI =
$154,500
=
$
5.15
30,000
End WIP 4,500 x $5.15 900 x $0.59
$23,175 531 $23,706
Abn Loss 400 x $3.05 320 x $0.59 400 x $5.15
$1,220 189 2,060 $3,469
COGM = $247,674 - 23,706 - 3,469 = $220,499 DIF: Moderate
OBJ: 6-3, 6-8
Cost Accounting Foundations and Evolutions
Kinney, Raiborn
12. ANS: Mat Units Complete + Equivalents Ending WIP + Abnormal Loss = Equivalent Production-WA = Equivalent Begin WIP = Equivalent Production-FIFO Unit Costs: WA Mat $915,120 = $5.05 181,200 CC
$338,688 = $1.97 171,520
Ending WIP Material CC Abnormal Spoilage Material CC
20,000 x $5.05 14,000 x $1.97
9,200 x $5.05 5,520 x $1.97
152,000 20,000 9,200 181,200 (6,000) 175,200
FIFO Mat
CC
CC 152,000 14,000 5,520 171,520 (1,800) 169,720
(9,200 x .6)
$885,120 175,200
= $5.05
$335,088 169,720
= $1.97
$101,000 27,580 $128,580
$ 46,460 10,874 $ 57,334
Cost of Good Transferred 1,253,808 - 128,580 - 57,334 = $1,067,894 DIF: Moderate
OBJ: 6-3,6-8
Cost Accounting Foundations and Evolutions
Kinney, Raiborn
13. ANS: Delightful Yogurt Company Cost Report October 31, 20X5 5,000 5,500 1,200 11,700
BWIP Trans. In Fruit Acctble. For
TI 9,000 1,700 1,000 11,700
Transferred Out EWIP Abnormal Spoilage
Fruit 9,000 1,700 1,000 11,700
Container 9,000 0 0 9,000
CC 9,000 1,020 980 11,000
Costs: TI $ 9,700 12,400 $22,100 11,700 $1.89
BWIP Current EUP Per unit
Fruit
Container
$10,500 54,000 $64,500 11,700 $5.51
$ 0 11,000 $11,000 9,000 $1.22
$ 3,213 9,367 10,475
$ 23,055
$ 1,890 5,510 10,065
17,465
CC $ 15,000 98,000 $113,000 11,000 $10.27
Cost Assignment: EWIP 1,700 x $1.89 = 1,700 x $5.51 = 1,020 x $10.27 = Spoilage 1,000 x $1.89 = 1,000 x $5.51 = 980 x $10.27 = Transferred Out $210,600 - 23,055 - 17,465 =
$210,600
Total accounted for DIF: Moderate
170,080
OBJ: 6-3,6-8
Cost Accounting Foundations and Evolutions
Kinney, Raiborn
14. ANS: BI 8,000 + Started 35,000 = Accountable for 43,000 Hocking Company Cost Report March 31, 20X8 Material 8,000 11,500 15,000 6,000 2,500 43,000
BWIP S&C EWIP Norm Abnorm. Acctd. For
0 11,500 15,000 0 2,500 29,000
CC 1,600 11,500 8,250 0 23,850
Material: $50,000/29,000 = $1.72 Conversion Costs: $175,000/23,850 = $7.34 Cost Assignment: Ending Work in Process 15,000 x $1.72 = 8,250 x $7.34 = Abnormal Spoilage 2,500 x $9.06 = Cost Transferred Out $284,000 - 86,355 - 22,650 = Total costs accounted for DIF: Moderate
$ 25,800 60,555
$ 86,355 22,650 174,995 $ 284,000
OBJ: 6-4,6-8
Cost Accounting Foundations and Evolutions
Kinney, Raiborn
15. ANS: BI 8,000 + Started 35,000 = Accountable for 43,000 Hocking Company Cost Report March 31, 20X8 Material Transferred Out Ending Work In Process Normal Spoilage Abnormal Spoilage 2,500 Accounted For
19,500 15,000 6,000 2,500 43,000
19,500 15,000 0 2,500 37,000
CC 19,500 8,250 0 30,250
Material: $64,000/37,000 = $1.73 Conversion Costs: $220,000/30,250 = $ 7.27 Cost Assignment: Ending Work in Process 15,000 x $1.73 = 8,250 x $7.27 = Abnormal Spoilage 2,500 x $9.00 = Transferred Out $284,000 - 85,928 - 22,500 = Total costs accounted for DIF: Moderate
$25,950 59,978
$ 85,928 22,500 175,572 $ 284,000
OBJ: 6-3,6-8
Cost Accounting Foundations and Evolutions
Kinney, Raiborn
