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Chapter 18: Q6SE (page 1008)

Refer to Short Exercise S18-5. At Spring Fresh, water is added at the beginning of the filtration process. Conversion costs are added evenly throughout the process. Now assume that in February, 155,000 liters were completed and transferred out of the Filtration Department into the Bottling Department. The 45,000 liters remaining in Filtration鈥檚 ending Work-in-Process Inventory were 80% of the way through the filtration process. Recall that Spring Fresh has no beginning inventories.

Compute the equivalent units of production for direct materials and conversion

costs for the Filtration Department.

Short Answer

Expert verified

The equivalent unit of production for direct material is 195,000 liters, and the conversion cost is 191,000 liters.

Step by step solution

01

Step-by-Step Solution:Step 1: Direct Material Cost

Direct material cost means the cost incurred by the company on the raw material and other components which are directly used in the manufacturing of the final products.

02

Equivalent unit of production for direct material


EUPfordirectmaterial=(Completedunits脳Completionpercentage)+(WIPunits脳Completionpercentage)=(155,000脳100%)+(45,000脳100%)=195,000鈥�liters

03

Equivalent unit of production for conversion costs

EUPforconversioncosts=(Completedunits脳Completionpercentage)+(WIPunits脳Completionpercentage)=(155,000脳100%)+(45,000脳80%)=191,000鈥�liters

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Most popular questions from this chapter

Roan Paper Co. produces the paper used by wallpaper manufacturers. Roan鈥檚 four-stage process includes mixing, cooking, rolling, and cutting. On March 1, the Mixing Department had 300 rolls of paper in process. During March, the Mixing Department completed the mixing process for those 300 rolls and also started and completed the mixing process for an additional 4,200 rolls of paper. The department started but did not finish the mixing process for an additional 500 rolls, which were 20% complete with respect to both direct materials and conversion work at the end of March. Direct materials and conversion costs are

incurred evenly throughout the mixing process.

The Mixing Department compiledthe following data for March:

Direct materials

Direct labor

Manufacturing overhead allocated

Total costs

Beginning inventory, Mar. 1

\(350

\)245

\(200

\)795

Costs added during March

4,940

3,000

3,225

11,165

Total costs

\(5,290

\)3,245

\(3,425

\)11,960

Requirements

1. Prepare a production cost report for the Mixing Department for March. The company uses the weighted-average method.

2. Journalize all transactions affecting the company鈥檚 mixing process during March. Assume labor costs are accrued and not yet paid.

Refer to the data and your answers from Exercise E18-23.

Requirements

1. Prepare the journal entries to record the assignment of direct materials and direct labor and the allocation of manufacturing overhead to the Fermenting Department. Assume labor costs are accrued and not yet paid. Also prepare the journal entry to record the cost of the gallons completed and transferred out to the Packaging Department.

2. Post the journal entries to the Work-in-Process Inventory鈥擣ermenting T-account. What is the ending balance?

3. What is the average cost per gallon transferred out of the Fermenting Department into the Packaging Department? Why would Shea Winery鈥檚 managers want to know this cost?

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.

The Packaging Department started the month with 600 units in process, received 1,200 units from the Finishing Department, and transferred 1,500 units to Finished Goods. Direct materials are added at the beginning of the process and conversion costs are incurred evenly. The units still in process at the end of the month are 60% complete for conversion costs. Calculate the number of units still in process at the end of the month and the equivalent units of production. The company uses the weighted-average method.
See all solutions

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