Ch.

5 Process Costing

Dr. Mustafa AL-Qudah

Exercise – 1:

The Assembly Department started the month with 14,000 units in its beginning work in
process inventory. An additional 296,000 units were transferred in from the prior
department during the month to begin processing in the Assembly Department. There were
14,000 units in the ending work in process inventory of the Assembly Department.

How many units were transferred to the next processing department during the month?

Answer:

Beginning work in process inventory + Units started into production or transferred in =

Ending work in process inventory + Units completed and transferred out

Units completed and transferred to the next processing department = Beginning work in
process inventory + Units started into production or transferred in - Ending work in
process inventory

= 14,000 + 296,000 - 14,000

= 296,000

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Exercise – 2:

Y Company uses the weighted-average method in its process costing system. Operating
data for the first processing department for the month of June appear below:

According to the company's records, the conversion cost in beginning work in process
inventory was $46,915 at the beginning of June. Additional conversion costs of $825,183
were incurred in the department during the month.

What was the cost per equivalent unit for conversion costs for the month?

Answer:

Units transferred to the next department = Units in beginning work in process + Units
started into production - Units in ending work in process = 11,000 + 98,000 - 21,000 =
88,000

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Exercise – 3:

Z Company uses the weighted-average method in its process costing system. The
company's work in process inventory on March 31 consisted of 20,000 units. The units in
the ending work in process inventory were 100% complete with respect to materials and
70% complete with respect to labor and overhead. The cost per equivalent unit for March
was $2.50 for materials and $4.75 for labor and overhead.

What is the total cost of work in process inventory in March 31?

Answer:

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Exercise – 4:
X Corporation uses the weighted-average method in its process costing system. The
beginning inventory in the first processing department consisted of 600 units. The costs and
percentage completion of these units in beginning inventory during the month were:

A total of 5,100 units were started and 4,400 units were transferred to the second
processing department during the month. The following costs were incurred in the first
processing department during the month:

The ending inventory was 75% complete with respect to materials and 10% complete with
respect to conversion costs.

a. What are the equivalent units for conversion costs for the month in the first processing
department?

Answer:

Units in ending work in process inventory= Units in beginning work in process inventory +
Units started into production or transferred in - Units completed and transferred out

Units in ending work in process inventory = 600 + 5,100 - 4,400 = 1,300

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b. What is the cost per equivalent unit for materials for the month in the first processing
department?

Answer:

c. What is the cost per equivalent unit for conversion costs for the first department?

Answer:

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d. What is the total cost of units transferred from the first processing department to the
next processing department during the month?

Answer:

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e. What is the cost of ending work in process inventory in the first processing department
according to the company's cost system?

Answer:

f. What is the total cost of ending work in process inventory& units transferred from the
first processing department to the next processing department during the month?

Answer:

The total cost of ending work in process inventory& units transferred from the first
processing department to the next processing department during the month = Total Cost of
units transferred from the first processing department to the next processing department
during the month + Total Cost of ending work in process inventory in the first processing
department

= 26,342.16 + 282,858.40

= 309,200.56