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Chapter 18: Q20E (page 1011)

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.

Short Answer

Expert verified

Cases

EUP for direct material

EUP for conversion cost

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

2,900

2,260

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

2,900

2,740

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

2,100

2,260

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

2,900

2,740

Step by step solution

01

Meaning of Manufacturing Process

The manufacturing process means the procedure undertaken by the manufacturing companies for converting the raw material into the finished goodsby using the machinery, labor, etc. Manufacturing is integral to the economy.

02

Equivalent unit of production for direct materials when the unit in process at the end of August is 20%

EUP=Completedunits脳Completion%+Inprocessunits脳Completion%=2,100脳100%+800脳100%=2,900

03

Equivalent unit of production for conversion cost when the unit in process at the end of August is 20%

EUP=Completedunits脳Completion%+Inprocessunits脳Completion%=2,100脳100%+800脳20%=2,260

04

Equivalent unit of production for direct materials when the unit in process at the end of August is 80%

EUP=Completedunits脳Completion%+Inprocessunits脳Completion%=2,100脳100%+800脳100%=2,900

05

Equivalent unit of production for conversion cost when the unit in process at the end of August is 80%

EUP=Completedunits脳Completion%+Inprocessunits脳Completion%=2,100脳100%+800脳80%=2,740

06

Equivalent unit of production for direct materials when the unit in process at the end of August is 20%, and the materials are added at the end of the process.

EUP=Completedunits脳Completion%+Inprocessunits脳Completion%=2,100脳100%+800脳0%=2,100

07

Equivalent unit of production for conversion cost when the unit in process at the end of August is 20%,and the materials are added at the end of the process.

EUP=Completedunits脳Completion%+Inprocessunits脳Completion%=2,100脳100%+800脳20%=2,260

08

Equivalent unit of production for direct materials when the unit in process at the end of August is 80%, and the materials are added at the halfway point

EUP=Completedunits脳Completion%+Inprocessunits脳Completion%=2,100脳100%+800脳100%=2,900

09

Equivalent unit of production for conversion cost when the unit in process at the end of August is 80%,and the materials are added at the Halfway point

EUP=Completedunits脳Completion%+Inprocessunits脳Completion%=2,100脳100%+800脳80%=2,740

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Most popular questions from this chapter

Mayhem Electronics makes game consoles in three processes: assembly, programming, and packaging. Direct materials are added at the beginning of the assembly process. Conversion costs are incurred evenly throughout the process. The Assembly Department had no Work-in-Process Inventory on March 31. In mid-April, Mayhem Electronics started production on 99,000 game consoles. Of this number, 95,000 game consoles were assembled during April and transferred out to the Programming Department. The April 30 Work-in-Process Inventory in the Assembly Department was 45% of the way through the assembly process. Direct materials costing \(301,950 were placed in production in Assembly during April, direct labor of \)100,960 was assigned, and manufacturing overhead of $136,200 was allocated to that department.

Requirements

1. Prepare a production cost report for the Assembly Department for April. The

company uses the weighted-average method.

2. Prepare a T-account for Work-in-Process Inventory鈥擜ssembly to show its activity during April, including the April 30 balance.

Match the following terms to their definitions.

1. Direct labor plus manufacturing

Overhead

a. Expresses partially completed units in terms of fully completed units

2. Prepared by department for EUP, production costs, and assignment of costs

b. Used by companies that manufacture

homogenous products

3. Equivalent units of production

c. Previous costs brought into later

process

4. Process costing system

d. Conversion costs

5. Transferred in costs

e. Combines prior period costs with current period costs

6. Weighted-average method

f. Production cost report

Question: What types of companies use job order costing systems?

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.

For each of the following products or services, indicate if the cost would most likely be determined using a job order costing system or a process costing system.

a. Soft drinks

b. Automobile repairs

c. Customized furniture

d. Aluminum foil

e. Lawn chairs

f. Chocolate candy bars

g. Hospital surgery

h. Pencils
See all solutions

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