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Tip Top Painting Company has the following production data for January: • Beginning work in process, 0 units • Units transferred out, 35,000 • Units in ending work in process, 4,000, which are 30% complete for conversion costs Materials are added only at the beginning of the process. Instructions Compute equivalent units of production for both materials and conversion costs. BE 144 Tip Top Painting Company has the following production data for March: • Beginning work in process, 2,000 units • Units transferred out, 42,000 • Units in ending work in process, 6,000, which are 80% complete for conversion costs Materials are added only at the beginning of the process. Instructions Compute equivalent units of production for both materials and conversion costs. 145 The Kirkland Department of Delta Manufacturing began the month of December with beginning work in process of 4,000 units that are 100% complete as to materials and 30% complete as to conversion costs. Units transferred out are 10,000 units. Ending work in process contains 1,000 units that are 100% complete as to materials and 60% complete as to conversion costs. Instructions Compute the equivalent units of production for materials and conversion costs for the month of December. BE 146 White Supplies’ total material costs are $50,000 and total conversion costs are $65,000. Equivalent units of production for materials are 10,000, and 3,250 for conversion costs. Instructions Compute the unit costs for materials, conversion costs, and total manufacturing costs for the month. BE 147 Apoly Manufacturing Company has the following production data for January. Ending Work in Process Beginning Units Started into % Complete as to Work in Process Production Units Conversion Cost -0- 6,500 700 30% Instructions Compute the physical units for January. BE 148 Sandusky Widget Company has the following production data for March. Ending Work in Process Month Beginning Units % Complete as to Work in Process Transferred Out Units Conversion Cost March 1,200 5,100 800 20% Process Cost Accounting 21 – 27 BE 148 (cont.) Instructions Compute the physical units for March. BE 149 Sequal Company has the following production data for June: units transferred out 46,000, and ending work in process 4,000 units that are 100% complete for materials and 30% complete for conversion costs. Unit materials cost is $5 and unit conversion cost is $11. Instructions Determine the costs to be assigned to the units transferred out and the units in ending work in process. Solution 149 (4 min.) BE 150 Tomlinson Company has the following production data for May: • Beginning work in process, 0 units • Units started, 62,000 • Ending work in process, 7,000 units that are 100% complete for materials and 60% complete for conversion costs • Unit materials cost, $7 • Unit conversion cost, $10 Instructions Determine the costs to be assigned to the units transferred out and the units in ending work in process. BE 151 Dirt Cleaners, Inc. has the following production data for January: Transferred out 50,000 units Ending work in process 6,000 units The units in ending work in process are 100% complete for materials and 60% complete for conversion costs. There is no beginning work in process. Materials cost is $10 per unit and conversion costs are $11 per unit. Instructions Determine the costs to be assigned to the units transferred out and the units in ending work in process. BE 152 Production costs chargeable to the Sanding Department in July for Joyful Art are $12,500 for materials, $26,000 for labor, and $10,000 for manufacturing overhead. Equivalent units of production are 25,000 for materials and 18,000 for conversion costs. Instructions Compute the unit costs for materials and conversion costs. Process Cost Accounting 21 – 29 EXERCISES Ex. 153 Baez Manufacturing Company produces a product in two departments: (1) Mixing and (2) Finishing. The company uses a process cost accounting system. (a) Purchased raw materials for $50,000 on account. (b) Raw materials requisitioned for production were: Direct materials Mixing department $20,000 Finishing department 14,000 (c) Incurred labor costs of $80,000. (d) Factory labor used: Mixing department $48,000 Finishing department 32,000 (e) Manufacturing overhead is applied to the product based on machine hours used in each department: Mixing department—600 machine hours at $45 per machine hour. Finishing department—500 machine hours at $30 per machine hour. (f) Units costing $66,000 were completed in the Mixing Department and were transferred to the Finishing Department. (g) Units costing $60,000 were completed in the Finishing Department and were transferred to finished goods. (h) Finished goods costing $30,000 were sold on account for $45,000. Instructions Prepare the journal entries to record the preceding transactions for Baez Manufacturing Company. Ex. 154 Sanders Company has two production departments: Fabricating and Finishing. Beginning inventories are: Work in Process—Fabricating, $6,030; Work in Process—Finishing, $4,100; and Finished Goods, $5,600. During the month the following transactions occurred: 1. Purchased $45,000 of raw materials on account. 2. Incurred $65,000 of factory labor. Wages are unpaid. 3. Incurred $50,000 of manufacturing overhead; $44,000 was paid and the remainder is unpaid. 4. Requisitioned materials for Fabricating, $10,000 and Finishing, $8,000. Process Cost Accounting 21 – 31 Ex. 154 (cont.) 5. Used factory labor for Finishing, $52,000 and Fabricating, $13,000. 6. Applied $45,000 of overhead based on machine hours used in each department. The Finishing Department used twice as many machine hours as did Fabricating. Instructions Journalize the transactions for the month. Ex. 155 The Pasta Factory manufactures spaghetti sauce through two production departments: Cooking and Packaging. For the month of February, the work in process accounts show the following debits: Cooking Packaging Beginning work in process $ -0- $ 6,000 Materials 40,000 21,000 Labor 21,000 9,000 Overhead 25,000 14,000 Costs transferred in 50,000 Instructions Journalize the February transactions that involved the work in process accounts. 21 – 32 Test Bank for Accounting Principles, Eighth Edition Ex. 156 Benson Industries uses a process cost system. Products are processed first by Department A, second by Department B, and then they are transferred to the finished goods warehouse. Shown below is the cost information for Department B during the month of October: Costs of units transferred in $120,000 Manufacturing costs added in Department B: Direct materials $40,000 Direct labor 11,000 Manufacturing overhead 19,000 70,000 Total costs charged to Department B in October $190,000 The cost of work in process in Department B at October 1 is $25,000, and the cost of work in process at October 31 has been determined to be $30,000. Instructions Prepare journal entries to record for the month of October: (a) The transfer of production from Department A to B. (b) The manufacturing costs incurred by Department B. (c) The transfer of completed units from Department B to the finished goods warehouse. Process Cost Accounting 21 – 33 Ex. 157 Hardy Company manufactures a single product by a continuous process, involving two production departments. The records indicate that $120,000 of direct materials were issued to and $200,000 of direct labor was incurred by Department 1 in the manufacture of the product. The factory overhead rate is $15 per machine hour; machine hours were 6,000 in Department 1. Work in process in the department at the beginning of the period totaled $35,000; and work in process at the end of the period was $25,000. Instructions Prepare entries to record (a) The flow of costs into Department 1 for (1) direct materials (2) direct labor (3) overhead (b) The transfer of production costs to Department 2. Ex. 158 Muffy Painting Company has the following production data for March. Ending Work in Process Month Beginning Units % Complete as to Work in Process Transferred Out Units Conversion Cost March 2,000 42,000 8,000 80% Instructions Compute equivalent units of production for March for both materials and conversion costs. Materials are entered at the beginning of the process. 21 – 34 Test Bank for Accounting Principles, Eighth Edition Ex. 159 The Nitrogen Fixation Department of Tomco Manufacturing began the month of December with beginning work in process of 4,000 units that are 100% complete as to materials and 30% complete as to conversion costs. Units transferred out are 10,000 units. Ending work in process contains 3,000 units that are 100% complete as to materials and 60% complete as to conversion costs. Instructions Compute the equivalent units of production for materials and conversion costs for the month of December. Ex. 160 At Crenshaw Company, materials are entered at the beginning of each process. Work in process inventories, with the percentage of work done on conversion, and production data for its Painting Department in selected months are as follows: Beginning Work In Process Ending Work In Process Month Percentage Units Completed Percentage Units Completed and Transferred Out Units Completed July -0- — 10,000 500 90% Sept. 2,500 20% 9,000 4,000 70% Process Cost Accounting 21 – 35 Ex. 160 (cont.) Instructions (a) Compute the physical units for July. (b) Compute the equivalent units of production for materials and conversion costs for September.

Tip Top Painting Company has the following production data for January:

• Beginning work in process, 0 units

• Units transferred out, 35,000

• Units in ending work in process, 4,000, which are 30% complete for conversion costs

Materials are added only at the beginning of the process.

Instructions

Compute equivalent units of production for both materials and conversion costs.

 

BE 144

Tip Top Painting Company has the following production data for March:

• Beginning work in process, 2,000 units

• Units transferred out, 42,000

• Units in ending work in process, 6,000, which are 80% complete for conversion costs

Materials are added only at the beginning of the process.

Instructions

Compute equivalent units of production for both materials and conversion costs.

145

The Kirkland Department of Delta Manufacturing began the month of December with beginning work in process of 4,000 units that are 100% complete as to materials and 30% complete as to conversion costs. Units transferred out are 10,000 units. Ending work in process contains 1,000 units that are 100% complete as to materials and 60% complete as to conversion costs.

Instructions

Compute the equivalent units of production for materials and conversion costs for the month of December.

BE 146

White Supplies’ total material costs are $50,000 and total conversion costs are $65,000. Equivalent units of production for materials are 10,000, and 3,250 for conversion costs.

Instructions

Compute the unit costs for materials, conversion costs, and total manufacturing costs for the month.

 

BE 147

Apoly Manufacturing Company has the following production data for January.

Ending Work in Process
Beginning Units Started into % Complete as to
Work in Process Production Units Conversion Cost
-0- 6,500 700 30%
Instructions
Compute the physical units for January.
 

BE 148

Sandusky Widget Company has the following production data for March.

Ending Work in Process
Month Beginning Units % Complete as to
Work in Process Transferred Out Units Conversion Cost
March 1,200 5,100 800 20%

 

Process Cost Accounting 21 – 27

BE 148 (cont.)
Instructions
Compute the physical units for March.
 

BE 149

Sequal Company has the following production data for June: units transferred out 46,000, and ending work in process 4,000 units that are 100% complete for materials and 30% complete for conversion costs. Unit materials cost is $5 and unit conversion cost is $11.

Instructions

Determine the costs to be assigned to the units transferred out and the units in ending work in process.

Solution 149 (4 min.)
 

BE 150

Tomlinson Company has the following production data for May:

• Beginning work in process, 0 units

• Units started, 62,000

• Ending work in process, 7,000 units that are 100% complete for materials and 60% complete for conversion costs

• Unit materials cost, $7

• Unit conversion cost, $10

Instructions

Determine the costs to be assigned to the units transferred out and the units in ending work in process.

 

 

BE 151

Dirt Cleaners, Inc. has the following production data for January:

Transferred out 50,000 units
Ending work in process 6,000 units

The units in ending work in process are 100% complete for materials and 60% complete for conversion costs. There is no beginning work in process. Materials cost is $10 per unit and conversion costs are $11 per unit.

Instructions

Determine the costs to be assigned to the units transferred out and the units in ending work in process.

 

BE 152

Production costs chargeable to the Sanding Department in July for Joyful Art are $12,500 for materials, $26,000 for labor, and $10,000 for manufacturing overhead. Equivalent units of production are 25,000 for materials and 18,000 for conversion costs.

Instructions

Compute the unit costs for materials and conversion costs.

 

Process Cost Accounting 21 – 29

 
 

EXERCISES

Ex. 153

Baez Manufacturing Company produces a product in two departments: (1) Mixing and (2) Finishing. The company uses a process cost accounting system.

(a) Purchased raw materials for $50,000 on account.

(b) Raw materials requisitioned for production were:

Direct materials
Mixing department $20,000
Finishing department 14,000

(c) Incurred labor costs of $80,000.

(d) Factory labor used:

Mixing department $48,000
Finishing department 32,000

(e) Manufacturing overhead is applied to the product based on machine hours used in each department:

Mixing department—600 machine hours at $45 per machine hour.

Finishing department—500 machine hours at $30 per machine hour.

(f) Units costing $66,000 were completed in the Mixing Department and were transferred to the Finishing Department.

(g) Units costing $60,000 were completed in the Finishing Department and were transferred to finished goods.

(h) Finished goods costing $30,000 were sold on account for $45,000.

Instructions

Prepare the journal entries to record the preceding transactions for Baez Manufacturing Company.

 


Ex. 154

Sanders Company has two production departments: Fabricating and Finishing. Beginning inventories are: Work in Process—Fabricating, $6,030; Work in Process—Finishing, $4,100; and Finished Goods, $5,600. During the month the following transactions occurred:

1. Purchased $45,000 of raw materials on account.

2. Incurred $65,000 of factory labor. Wages are unpaid.

3. Incurred $50,000 of manufacturing overhead; $44,000 was paid and the remainder is unpaid.

4. Requisitioned materials for Fabricating, $10,000 and Finishing, $8,000.

 

Process Cost Accounting 21 – 31

Ex. 154 (cont.)

5. Used factory labor for Finishing, $52,000 and Fabricating, $13,000.

6. Applied $45,000 of overhead based on machine hours used in each department. The Finishing Department used twice as many machine hours as did Fabricating.

Instructions

Journalize the transactions for the month.

 

Ex. 155

The Pasta Factory manufactures spaghetti sauce through two production departments: Cooking and Packaging. For the month of February, the work in process accounts show the following debits:

Cooking Packaging
Beginning work in process $ -0- $ 6,000
Materials 40,000 21,000
Labor 21,000 9,000
Overhead 25,000 14,000
Costs transferred in 50,000

Instructions

Journalize the February transactions that involved the work in process accounts.

 

21 – 32 Test Bank for Accounting Principles, Eighth Edition

 

Ex. 156

Benson Industries uses a process cost system. Products are processed first by Department A, second by Department B, and then they are transferred to the finished goods warehouse. Shown below is the cost information for Department B during the month of October:

Costs of units transferred in $120,000
Manufacturing costs added in Department B:
Direct materials $40,000
Direct labor 11,000
Manufacturing overhead 19,000 70,000
Total costs charged to Department B in October $190,000

The cost of work in process in Department B at October 1 is $25,000, and the cost of work in process at October 31 has been determined to be $30,000.

Instructions

Prepare journal entries to record for the month of October:

(a) The transfer of production from Department A to B.

(b) The manufacturing costs incurred by Department B.

(c) The transfer of completed units from Department B to the finished goods warehouse.

Process Cost Accounting 21 – 33

Ex. 157

Hardy Company manufactures a single product by a continuous process, involving two production departments. The records indicate that $120,000 of direct materials were issued to and $200,000 of direct labor was incurred by Department 1 in the manufacture of the product. The factory overhead rate is $15 per machine hour; machine hours were 6,000 in Department 1. Work in process in the department at the beginning of the period totaled $35,000; and work in process at the end of the period was $25,000.

Instructions
Prepare entries to record
(a) The flow of costs into Department 1 for
(1) direct materials
(2) direct labor
(3) overhead
(b) The transfer of production costs to Department 2.
 

Ex. 158

Muffy Painting Company has the following production data for March.

Ending Work in Process
Month Beginning Units % Complete as to
Work in Process Transferred Out Units Conversion Cost
March 2,000 42,000 8,000 80%

Instructions

Compute equivalent units of production for March for both materials and conversion costs. Materials are entered at the beginning of the process.

 

21 – 34 Test Bank for Accounting Principles, Eighth Edition

 

Ex. 159

The Nitrogen Fixation Department of Tomco Manufacturing began the month of December with beginning work in process of 4,000 units that are 100% complete as to materials and 30% complete as to conversion costs. Units transferred out are 10,000 units. Ending work in process contains 3,000 units that are 100% complete as to materials and 60% complete as to conversion costs.

Instructions

Compute the equivalent units of production for materials and conversion costs for the month of December.

 

Ex. 160

At Crenshaw Company, materials are entered at the beginning of each process. Work in process inventories, with the percentage of work done on conversion, and production data for its Painting Department in selected months are as follows:

Beginning Work In Process Ending Work In Process
Month Percentage Units Completed Percentage
Units Completed and Transferred Out Units Completed
July -0- 10,000 500 90%
Sept. 2,500 20% 9,000 4,000 70%

 

Process Cost Accounting 21 – 35

Ex. 160 (cont.)

Instructions

(a) Compute the physical units for July.

(b) Compute the equivalent units of production for materials and conversion costs for September.

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