Documente Academic
Documente Profesional
Documente Cultură
EXERCISES
Quantity Schedule
Input
Work-in-process inventory, 1/1 30,000
Units started 150,000
Total units to account for 180,000
Output
Units completed 165,000
Work in process inventory, 12/31 15,000
Total units accounted for 180,000
Conversion:
Units completed 165,000
Work-in-process inventory,12/31 15,000 x 60% = 9,000
Total equivalent units 174,000
Weighted Average:
Materials = 800 + 1.0 x 300 = 1,100
Conversion = 800 + .12 x 300 = 836
FIFO
Materials = 800 + 1.0 x 300 1.0 x 200 = 900
Conversion = 800 + .12 x 300 - .09 x 200 = 818
Weighted Average:
Materials: $2.25
Conversion: $4.378
FIFO:
Materials: $2.40
Conversion: $4.412
2. The differences between the cost per equivalent unit (FIFO vs weighted-
average) for materials and conversion are due to differences in the per unit
amounts in beginning WIP and current costs. These differences are
averaged together in the weighted-average method, while in the FIFO
method, the cost per equivalent unit is based on current costs only.
1. Equivalent units
Returns completed during March 1,200*
Returns in process, 3/31: 200 x 90% = 180
- Returns in process, 3/1: 100 x 30% = (30)
FIFO equivalent units 1,350
1.
First, at the time materials are purchased.
Materials Inventory $190,000
Accounts Payable, Cash $190,000
2. Backflush costing is used when the level of WIP inventory is very small.
This can be the case for firms that use just-in-time manufacturing (JIT), so
that purchases are carefully coordinated with scheduled production on a
daily basis. Backflush costing is a practical and convenient costing method
for cases like this.
PROBLEMS
11-38: Weighted Average Method (20 min)
Whole
Units Materials Conversion
Beginning WIP 6,000 100% 50%
Units started 15,000
Total to account for 21,000
Output
Units completed 70,000
Work-in-process inventory, 8/31 17,000
Total units accounted for 87,000
Equivalent Units:
Material X
Units completed 70,000
Work-in-process inventory, 8/31 17,000 x 100% = 17,000
Total equivalent units 87,000
Material Y
Units completed 70,000
Work-in-process inventory, 8/31 17,000 x 0% = 0
Total equivalent units 70,000
Conversion
Units completed 70,000
Work-in-process inventory, 8/31 17,000 x 40% = 6,800
Total equivalent units 76,800
1. Equivalent units:
Direct Materials: 175,000 + (30,000 x 80%) = 199,000
Conversion: 175,000 + (30,000 x 40%) = 187,000
11-46 (continued)
2. On March 17, 2006, the exchange rate was $1 US = 970 South Korean
Won (KRW). The dollar had fallen from a rate of $1 US = 1,200 KRW three
years earlier.
Output
Units completed 70,000
Work-in-process inventory, 6/30 25,000
Total units accounted for 95,000
Material B
Units completed 70,000
Work-in-process inventory, 6/30 25,000 x 100% = 25,000
Total 95,000
Less: EU in WIP inventory, 6/1 15,000 x 0% = ( 0)
Total equivalent units 95,000
Conversion:
Units completed 70,000
Work-in-process inventory, 6/30 25,000 x 65% = 16,250
Total 86,250
Less: EU in WIP inventory, 6/1 15,000 x 40% = ( 6,000)
Total equivalent units 80,250
.
Problem 11-50 (Continued)
Costs:
DM Conv Total
WIP, January 1 $ 0 $ 0 $ 0
Costs incurred during Jan. 300,000 50,000 350,000
Total costs to acct. for $300,000 $50,000 $350,000
Cost incurred to produce units that were both started and completed during
Jan.:
Conversion:
(# of equivalent units of conversion.) x (Conversion cost per equivalent
unit)
= 500 x $0.7656 = $382.80
Cost Reconciliation
Cost of 107,000 good units at $.4158 $44,490.60
Abnormal spoilage (2,300 X $.378) 869.40
Total production costs $45,360.00
Supporting Calculations
(107,000 X $.378)
Normal spoilage 4,044.60
(10,700 X $.378)
Total cost of good units $44,490.60
a. Transferred- b. c.
in from Assembly Assembly
Molding Material Conversion
Units transferred out 40,000 40,000 40,000
Equivalent units in
ending work-in-process
4,000 x 100% 4,000