Exercise 4

EXERCISE 4-2 Computation of Equivalent Units-Weighted-Average Method [L02] Answer : Units transferred to the next department Ending work in process : Materials : 15000x80% Conversion : 15000x40% Equivalent units of production

Materials 190,000

Conversion 190,000

12000 202,000

6000 196,000

EXERCISE 4-3 Cost per Equivalent Unit-Weighted-Average Method [LO3] Answer : Cost : Cost of beginning work in process inventory Cost added during the period Total costs (a) Equivalent units of production (b) Cost per equivalent unit (a)/(b)

Materials Labor Overhead $18,000 $5,500 $27,500 $238,900 $80,300 $401,500 $256,900 $85,800 $429,000 $35,000 $33,000 $33,000 $7.34 $2.6 $13

EXERCISE 4-4 Applying Costs to Units-Weighted-Average Method [LO4] Answer : Materials Conversion Total Ending work in process inventory : Equivalent units of production (a) Cost per equivalent unit (see above) (b)

300 $31.56

100 $9.32 $1040

0 Units completed and transferred out: Units transferred to the next department (a) Cost per equivalent unit (see above) (b) Cost of units transferred out (a)x(b)

1300 $31.56 $41,028

1300 $9.32 $12,116 $53,14

4

EXERCISE 4-5 (Appendix 4A) Computation of Equivalent Units-FIFO Methods [LO5] Answer : Materials To complete beginning work in process: Materials : 400 (100%-75%) Conversion : 400 (100%-25%) Units started and completed during the process Ending work in process : Materials : 500 x 80% complete Conversion : 500 x 30% complete Equivalent units of production

Conversion

100 42,600

300 42,600

400 43,100

150 43,050

EXERCISE 4-6 (Appendix 4A) Cost per Equivalent Unit-FIFO Method [L06] Answer : Cost added during the period (a) Equivalent units of production(b) Cost per equivalent unit (a)/(b)

Materials $193,320 27,000 $7.16

Labor $62,000 25,000 $2.48

Overhead Total $310,000 25,000 $12.4 22.04

EXERCISE 4-7 (Appendix 4A) Applying Costs to units-FIFO Method [LO7] Answer : Materials Ending work in process inventory : Equivalent units of production(a) 800 Cost per equivalent unit (see above) (b) $4.40 Cost of ending work in process inventory (a)x(b) $3520 Units transferred out : Cost in beginning work in process inventory $2,700 Cost to complete the units in beginning work in process inventory : Equivalent units of production required to Complete the units in beginning inventory 400 Cost per equivalent units(see above) (b) $4.40 Cost to complete the units in beginning Inventory (a)x(b) $1,760 Cost of units started and completed this period : Units started and completed this period (a) 7,000 Cost per equivalent unit (see above) (b) $4.40 Cost of units started and completed this Period (a)x(b) $30,800 Total cost of units transffered out

Conversion

Total

200 $1.30 $260

$3780

$380

$3080

700 $1.30 $910

$2670

7,000 $1.30 $9,100

$39,900 $45,650