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Chapter 18: Q.18-10SE (page 1008)

Question: Refer to Short Exercises S18-8 and S18-9. Use Complete Foods鈥檚 costs per equivalent unit of production for direct materials and conversion costs that you calculated in Short Exercise S18-9.

Calculate the cost of the 38,000 units completed and transferred out and the

24,000 units, 20% complete, in the ending Work-in-Process Inventory.

Short Answer

Expert verified

Answer:

The cost of 38,000 units completed and transferred out is $49,400 and the cost of 24,000 units is $31,200.

Step by step solution

01

Cost of 38,000 units completed and transferred out

Costofcompletedunits=Equalentunitofproduction脳(costofdirectmaterial+Conversioncost)=38,000脳($0.75+$0.55)=$49,400

02

Cost of 24,000 units, 20% completed units

CostofWIPunits=Equalentunitofproduction脳(costofdirectmaterial+Conversioncost)=24,000脳($0.75+$0.55)=$31,200

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Most popular questions from this chapter

What are transferred in costs? When do they occur?

Work Problem P18-33A using the FIFO method. The Mixing Department beginning work in process of 300 units is 40% complete as to both direct materials and conversion costs. Round equivalent unit of production costs to four decimal places. Round all other costs to the nearest whole dollar.

Collins Company has the following data for the Assembly Department for August:

Unit in process at the beginning of august

900

Units started in august

2,000

Units completed and transferred

2,100

Units in process at the end of august

800

Conversion costs are added evenly throughout the process. The company uses the weighted-average method. Compute the equivalent units of production for direct materials and conversion costs for each independent scenario:

1. Units in process at the end of August are 20% complete; materials are added at the beginning of the process.

2. Units in process at the end of August are 80% complete; materials are added at the beginning of the process.

3. Units in process at the end of August are 20% complete; materials are added at the end of the process.

4. Units in process at the end of August are 80% complete; materials are added at the halfway point.

The comparative financial statements of Norfolk Cosmetic Supply for 2018, 2017, and

2016 include the data shown here:

2018 2017 2016

Balance sheet鈥攑artial

Current Assets:

Cash

Short-term investments

Accounts Receivable, Net

Merchandise Inventory

Prepaid Expenses

Total Current Assets

Total Current Liabilities

Income statement鈥攑artial

Net Sales (all on account)

\( 70,000

140,000

280,000

355,000

70,000

915,000

560,000

5,890,000

\) 60,000

170,000

240,000

330,000

35,000

835,000

630,000

5,130,000

$ 50,000

120,000

260,000

310,000

35,000

775,000

640,000

4,210,000

Requirements

1. Compute these ratios for 2018 and 2017:

a. Acid-test ratio (Round to two decimals.)

b. Accounts receivable turnover (Round to two decimals.)

c. Days鈥� sales in receivables (Round to the nearest whole day.)

2. Considering each ratio individually, which ratios improved from 2017 to 2018 and

which ratios deteriorated? Is the trend favorable or unfavorable for the company?

Question: What are conversion costs? Why do some companies using process costing systems use conversion costs?
See all solutions

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