Solutions to questions due on 15 Dec.

2014
Question 1:
The costs that might be added in the Firing Department include: (1) costs transferred in from
the Mixing Department; (2) materials costs added in the Firing Department; (3) labor costs
added in the Firing Department; and (4) overhead costs added in the Firing Department.

Question 2:
Ending physical units = 50,000+390,000-410,000 = 30,000

Units transferred out .............................................................

Work in process, ending:
30,000 units 70% ............................................................
30,000 units 50% ............................................................
Equivalent units of production ...............................................

Equivalent Units
Materials
Conversion
410,000
410,000
21,000
431,000

15,000
425,000

Question 3
1.
Units transferred to the next process.......................................
Ending work in process:
Materials: 40,000 units 50% complete.............................
Conversion: 40,000 units 25% complete .........................
Equivalent units of production ................................................
2.
Cost of beginning work in process ........................................
Cost added during the period .................................................
Total cost (a) ..........................................................................
Equivalent units of production (b) .........................................
Cost per equivalent unit (a) (b) ...........................................

Materials
300,000

Conversion
300,000

20,000
320,000
Materials
$ 56,600
385,000
$441,600
320,000
$1.38

10,000
310,000
Conversion
$ 14,900
214,500
$229,400
310,000
$0.74

3.

Materials
Ending work in process inventory:
Equivalent units of production (see
above) ................................................
Cost per equivalent unit (see above) .......
Cost of ending work in process
inventory ...........................................
Units completed and transferred out:
Units transferred to the next process .......
Cost per equivalent unit
(see previous exercise) ......................
Cost of units completed and transferred
out......................................................

Conversion

Total

20,000
$1.38

10,000
$0.74

$27,600

$7,400

300,000

300,000

$1.38

$0.74

$414,000

$222,000

$35,000

$636,000

Question 4
1.

Ending physical units = 70,000 + 460,000- 450,000 = 80,000

Equivalent Units of Production
Transferred to next department ................................................
Ending work in process:
Materials: 80,000 units x 75% complete ..............................
Conversion: 80,000 units x 25% complete ...........................
Equivalent units of production ................................................

2.

Conversion
450,000

60,000
510,000

20,000
470,000

Cost per Equivalent Unit

Cost of beginning work in process ......................................
Cost added during the period ...............................................
Total cost (a) ........................................................................
Equivalent units of production (b) .......................................
Cost per equivalent unit, (a) (b)........................................

3.

Materials
450,000

Materials
$ 36,550
391,850
$428,400
510,000
$0.84

Conversion
$ 13,500
287,300
$300,800
470,000
$0.64

Applying Costs to Units

Materials
Ending work in process inventory:
Equivalent units of production ..........
Cost per equivalent unit ......................
Cost of ending work in process inventory
.........................................................

Conversion

60,000
$0.84

20,000
$0.64

$50,400

$12,800

Total

$63,200

Units completed and transferred out:

Units transferred to the next department
Cost per equivalent unit ......................
Cost of units completed and transferred
out ....................................................

450,000
$0.84

450,000
$0.64

$378,000

$288,000

$666,000

In-class question solutions:

1. A. Since Federal had accounted for 170,000 units (100,000 + 70,000), the company must
have started 108,000 units in May (170,000
62,000).
B. Equivalent units for conversion cost total 128,000 [100,000 + (70,000

40%)].

C. The conversion cost per equivalent unit is $6.25 [($90,000 + $710,000)

D. Ending work in process totals $315,000: materials, $140,000 (70,000
conversion, $175,000 [(70,000
40%)
$6.25].

128,000 units].
$2.00) +

E. Work-in-Process Inventory

2. A.
Direct materials
Direct labor
Applied Overhead
Transferred-in cost

Mixing department
$325,000
65,000
85,000
0

Total cost
B.
Work in Process-Cooking
Work in Process-Mixing

Cooking department Packaging department

$110,000
$90,000
35,000
80,000
30,000
95,000
$475,000
$650,000

$475,000

$650,000

$915,000

$475,000
$475,000

Work in Process-Packaging
Work in Process-Cooking

$650,000

Finished Goods
Work in Process-Packaging

$915,000

$650,000

$915,000