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CHAPTER 6 DISCUSSION QUESTIONS
Q6-1. The basic objective of process costing is to determine the costs of the products manufactured by the company. Determining the cost of the products manufactured is necessary in order to properly cost ending inventories for external reporting purposes (i.e., reporting to creditors and owners of the company, the SEC, and the IRS) and to evaluate the profitability of the manufacturing activity. In order to cost products, the costs must be determined for materials, labor, and factory overhead used to process each unit of product through each department. Q6-2. The products manufactured within a department (or cost center) during the period can be heterogeneous if job order costing is used, but must be homogeneous if process costing is used. In job order costing, products are accounted for in batches. The cost of each unit of product manufactured on a job is determined by dividing the total cost charged to the job by the number of units produced on the job. Since the manufacturing cost of each job is accounted for separately, accurate and useful product cost can be determined even when the products manufactured on different jobs are substantially different. By contrast, in process costing, all manufacturing costs are charged to the department, and the unit cost is determined by dividing the cost charged to the department by the number of units produced. As a consequence, the units of product manufactured within a department must be essentially alike in order for the cost allocated to each unit to be meaningful (i.e., to reasonably reflect the actual cost of the resources used to manufacture the product). Q6-3. (a) Process (b) Process, unless significantly different models are manufactured (c) Process (d) Job order (e) Process (f) Process (g) Job order
(h) Process, unless different fabrics are used for different models, in which case the conversion costs may be accounted for using process, but the materials using job order Q6-4. Three product flow formats are: sequential, parallel, and selective. Sequential means that the product flows or is manufactured in an unchanging fixed set of operations, going from one department to the next. Parallel means that certain operational phases take place simultaneously in other departments and the partially completed units or parts are brought together in subsequent departments. Selective refers to the fact that a product does not necessarily move through every department. Depending upon the character or shape of the final product, different departments are engaged in completing the desired product. Q6-5. Materials Costs—In job order costing, materials requisitions are used and charges are made to jobs; in process costing, charges for materials issued to production are made to departments, with infrequent use of materials requisitions. Labor Costs—Time tickets are used in job order costing to accumulate labor costs for each job; in process costing, labor costs are charged to departments, and, therefore, detailed time records are not necessary. Factory Overhead—Job order costing requires the use of predetermined rates for charging overhead to jobs; in process costing, actual overhead may be used. (However, predetermined rates are often used in order to smooth overhead that is not incurred at the same rate as production activity.) Summarizing Costs—A job order cost sheet is used to accumulate the costs of an order in job order costing; a cost of production report is used in process costing. In job order costing, costs are summarized on completion of the job; in process costing, costs charged to the
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department and costs accounted for are summarized in the cost of production report each month (or sometimes each week). Q6-6. Predetermined overhead rates can and should be used if the pattern of overhead cost incurrence does not follow the pattern of production activity. Some items of overhead are fixed and not responsive to changes in production activity. If production volume varies each month, then predetermined overhead rates should be used. Some items of overhead are incurred only at certain times during the year, but benefit production throughout the year (e.g., payroll taxes, insurance, property taxes, vacation pay, etc.). These items can be recorded as prepaid expenses and amortized uniformly to each month if actual overhead is charged to production. Alternatively, estimates of such costs can be included in the predetermined overhead rate, and the actual cost charged to overhead when incurred. The use of predetermined rates is often simpler than the allocation of actual costs because a single predetermined rate requires only one overhead charge to each department each month. In contrast, the capitalization and amortization of each item of actual overhead would require numerous charges each month. Q6-7. A cost of production report is an effective monthly (or weekly) summary of the cost of materials, labor, and overhead consumed by each department or cost center, along with a record of the quantity of products manufactured. It provides information necessary to cost
Chapter 6
products, prepare journal entries to record the transfer of costs between departments, and control costs. Q6-8. The sections commonly found in a cost of production report are: (a) a quantity schedule indicating the source and disposition of the units of product, (b) a cost charged to the department section, indicating the cost in total and per unit for the cost transferred in from the preceding department, as well as materials, labor and overhead charged to the department, and (c) a cost accounted for section indicating the amount of cost assigned to the units transferred out of the department, as well as the cost of ending inventory. Q6-9. Separate departmental cost of production reports are used to accumulate costs more accurately and to provide more detailed data for cost control purposes than a plant-wide cost of production report could provide. In some cases (e.g., a manufacturing plant that has a selective production flow for its products), a plant-wide cost of production report cannot be used. Q6-10. An equivalent unit of production is the amount of a resource (e.g., materials, labor, or overhead) that would be required to complete one unit of the product with respect to the cost element being considered. The total number of equivalent units, with respect to a particular element of cost, represents the number of units of the product that could have been completed with the resources used during the period.
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EXERCISES E6-1 (1)
Equivalent units transferred out ................. Equivalent units in ending inventory: Cost from preceding department (100% × 5,000) ................................ Materials (100% × 5,000) .................... Labor (80% × 5,000) .............................. Factory overhead (60% × 5,000) ......... Total equivalent units................................... (2)
Cost in beginning inventory........................ Cost added during current period .............. Total cost to be accounted for .................... Divided by total equivalent units ................ Cost per equivalent unit ..............................
Cost from Preceding Department
20,000
Materials
Labor
Factory Overhead
20,000
20,000
20,000
5,000 5,000 4,000 25,000 Cost from Preceding Department
0 $40,000 $40,000 25,000 $ 1.60
25,000
24,000
Materials
Labor
0 $15,000 $15,000 25,000 $ .60
E6-2 Work in Process—Department X ............................................. Work in Process—Department Y ............................................. Materials ........................................................................
0 $ 9,600 $ 9,600 24,000 $ .40
3,000 23,000
Factory Overhead
0 $16,330 $16,330 23,000 $ .71
50,000 40,000 90,000
Work in Process—Department X ............................................. Work in Process—Department Y ............................................. Payroll ............................................................................
80,000 70,000
Work in Process—Department X ............................................. Work in Process—Department Y ............................................. Factory Overhead ........................................................
180,000 70,000
Work in Process—Department Y ............................................. Work in Process—Department X ................................
300,000
Finished Goods Inventory........................................................ Work in Process—Department Y.................................
448,000
150,000
250,000 300,000 448,000
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Chapter 6
Tyndol Fabricators Inc. Cutting and Forming Department Cost of Production Report For November
Quantity Schedule Beginning inventory................................ Started in process this period ............... Transferred to Assembling Department Ending Inventory .....................................
Materials
Labor
75%
40%
Overhead
25%
Quantity 800 3,200 4,000 3,400 600 4,000
Cost Charged to Department Beginning inventory: Materials ..................................................................................... Labor .......................................................................................... Factory overhead....................................................................... Total cost in beginning inventory....................................
Total Cost $ 17,923 2,352 3,800 $ 24,075
Equivalent Units*
Unit Cost**
Cost added during current period: Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost added during current period............................ Total cost charged to department ..................................................
$ 68,625 14,756 29,996 $113,377 $137,452
3,850 3,640 3,550
$22.48 4.70 9.52
Cost Accounted for as Follows Transferred to Assembling Department Work in Process, ending inventory: Materials ............................................ Labor .................................................. Factory overhead .............................. Total cost accounted for ........................
Units 3,400 600 600 600
$36.70
% Complete Unit Cost 100% $36.70 75% 40% 25%
$22.48 4.70 9.52
Total Cost $124,780 $10,116 1,128 1,428
12,672 $137,452
*Total number of equivalent units required in the cost accounted for section determined as follows:
Equivalent units transferred out ............ Equivalent units in ending inventory .... Total equivalent units..............................
Materials 3,400 450 3,850
Labor 3,400 240 3,640
Overhead 3,400 150 3,550
** Total cost (i.e., the cost in beginning inventory plus the cost added during the current period) divided by the total number of equivalent units required in the cost accounted for section
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Tokyo Manufacturing Company Molding Department Cost of Production Report For August
Quantity Schedule Beginning inventory................................ Started in process this period ............... Transferred to Finishing Department .... Ending inventory .....................................
Materials
75%
Labor
25%
Overhead
25%
Quantity 1,000 9,000 10,000 9,200 800 10,000
Cost Charged to Department Beginning inventory: Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost in beginning inventory....................................
Total Cost $ 4,120 522 961 $ 5,603
Equivalent Units*
Unit Cost**
Cost added during current period: Materials ..................................................................................... Labor........................................................................................... Factory overhead.......................................................................
$39,980 12,638 18,779
9,800 9,400 9,400
$4.50 1.40 2.10
Total cost added during current period............................ Total cost charged to department ..................................................
$71,397 $77,000
$8.00
% Complete Unit Cost 100% $8.00
Total Cost $73,600
Cost Accounted for as Follows Transferred to Finishing Department .... Work in Process, ending inventory: Materials .............................................. Labor .................................................... Factory overhead ................................ Total cost accounted for ........................
Units 9,200 800 800 800
75% 25% 25%
$4.50 1.40 2.10
$2,700 280 420
3,400 $77,000
*Total number of equivalent units required in the cost accounted for section determined as follows:
Equivalent units transferred out ....... Equivalent units in ending inventory Total equivalent units ........................
Materials 9,200 600 9,800
Labor 9,200 200 9,400
Overhead 9,200 200 9,400
** Total cost (i.e., the cost in beginning inventory plus the cost added during the current period) divided by the total number of equivalent units required in the cost accounted for section
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Chapter 6
Stanislov Corporation Forming Department Cost of Production Report For September
Quantity Schedule Beginning inventory................................ Received from Cutting Department....... Transferred to Painting Department ...... Ending inventory .....................................
Materials
60%
Labor
30%
Overhead
30%
Quantity 1,400 4,600 6,000 5,000 1,000 6,000
Cost Charged to Department Beginning inventory: Cost from preceding department............................................. Materials .................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost in beginning inventory......................................
Total Cost $ 21,120 5,880 2,614 5,228 $ 34,842
Equivalent Units*
Unit Cost**
Cost added during current period: Cost from preceding department............................................. Materials ..................................................................................... Labor........................................................................................... Factory overhead ...................................................................... Total cost added during current period............................ Total cost charged to department .................................................
$ 68,280 20,440 17,526 35,052 $141,298 $176,140
6,000 5,600 5,300 5,300
$14.90 4.70 3.80 7.60
Cost Accounted for as Follows Transferred to Painting Department ...... Work in Process, ending inventory: Cost from preceding department .... Materials ............................................ Labor .................................................. Factory overhead .............................. Total cost accounted for.........................
Units 5,000
% Complete 100%
Unit Cost $31.00
1,000 1,000 1,000 1,000
100% 60% 30% 30%
$14.90 4.70 3.80 7.60
$31.00
Total Cost $155,000 $14,900 2,820 1,140 2,280
21,140 $176,140
*Total number of equivalent units required in the cost accounted for section determined as follows:
Equivalent units transferred out ............ Equivalent units in ending inventory .... Total equivalent units..............................
Prior Dept. Cost Materials 5,000 5,000 1,000 600 6,000 5,600
Labor 5,000 300 5,300
Overhead 5,000 300 5,300
** Total cost (i.e., the cost in beginning inventory plus the cost added during the current period) divided by the total number of equivalent units required in the cost accounted for section
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Sonneli Corporation Assembly Department Cost of Production Report For February
Quantity Schedule Beginning inventory................................ Received from Cutting Department....... Transferred to Finished Goods .............. Ending inventory ....................................
Materials
80%
Labor
60%
Cost Charged to Department Beginning inventory:
Overhead
60%
Total Cost
Cost from preceding department............................................. Materials ..................................................................................... Labor .......................................................................................... Factory overhead....................................................................... Total cost in beginning inventory......................................
$11,800 4,000 1,200 2,400 $19,400
Cost added during current period: Cost from preceding department............................................. Materials ..................................................................................... Labor .......................................................................................... Factory overhead ...................................................................... Total cost added during current period .......................... Total cost charged to department ..................................................
$63,200 21,200 17,660 35,320 $137,380 $156,780
Cost Accounted for as Follows Transferred to Finished Goods .............. Work in Process, ending inventory: Cost from preceding department .... Materials ............................................ Labor .................................................. Factory overhead .............................. Total cost accounted for.........................
Units 2,000 500 500 500 500
Quantity 400 2,100 2,500 2,000 500 2,500 Equivalent Units*
Unit Cost**
2,500 2,400 2,300 2,300
$30.00 10.50 8.20 16.40 $65.10
% Complete Unit Cost 100% $65.10 100% 80% 60% 60%
$30.00 10.50 8.20 16.40
Total Cost $130,200 $15,000 4,200 2,460 4,920
26,580 $156,780
*Total number of equivalent units required in the cost accounted for section determined as follows:
Equivalent units transferred out ............ Equivalent units in ending inventory .... Total equivalent units..............................
Prior Dept. Cost Materials 2,000 2,000 500 400 2,500 2,400
Labor 2,000 300 2,300
Overhead 2,000 300 2,300
** Total cost (i.e., the cost in beginning inventory plus the cost added during the current period) divided by the total number of equivalent units required in the cost accounted for section
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Chapter 6
Saleri Manufacturing Corporation Forming Department Cost of Production Report For June
Quantity Schedule Beginning inventory................................ Received from Cutting Department....... Transferred to Finishing Department .... Ending inventory .....................................
Material A
100%
Material B
0%
Labor
30%
Overhead
30%
Quantity 600 3,900 4,500 4,100 400 4,500
Cost Charged to Department Beginning inventory: Cost from preceding department............................................. Material A ................................................................................... Material B ................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost in beginning inventory ....................................
Total Cost $ 4,422 2,805 0 1,250 1,875 10,352
Equivalent Units*
Unit Cost**
Cost added during current period: Cost from preceding department............................................. Material A ................................................................................... Material B ................................................................................... Labor........................................................................................... Factory overhead ...................................................................... Total cost added during current period............................ Total cost charged to department ..................................................
$ 29,328 19,695 10,250 15,630 23,445 $ 98,348 $108,700
4,500 4,500 4,100 4,220 4,220
$ 7.50 5.00 2.50 4.00 6.00
Cost Accounted for as Follows Transferred to Finishing Department .... Work in Process, ending inventory: Cost from preceding department .... Material A .......................................... Material B .......................................... Labor .................................................. Factory overhead ............................. Total cost accounted for ........................
Units 4,100 400 400 400 400 400
$25.00
% Complete Unit Cost 100% $25.00 100% 100% 0% 30% 30%
$7.50 5.00 2.50 4.00 6.00
Total Cost $102,500 $3,000 2,000 0 480 720
6,200 $108,700
*Total number of equivalent units required in the cost accounted for section determined as follows:
Equivalent units transferred out ............ Equivalent units in ending inventory .... Total equivalent units..............................
Prior Dept. Cost Material A 4,100 4,100 400 400 4,500 4,500
Material B 4,100 0 4,100
Labor 4,100 120 4,220
Overhead 4,100 120 4,220
** Total cost (i.e., the cost in beginning inventory plus the cost added during the current period) divided by the total number of equivalent units required in the cost accounted for section
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Canoli Cola Company Carbonation Department Cost of Production Report For October
Quantity Schedule Beginning inventory ................................................ Received from Syrup Department .......................... Added to process in Carbonation Department ..... Transferred to Bottling Department ....................... Ending inventory ......................................................
Materials
100%
Cost Charged to Department Beginning inventory: Cost from preceding department ........................................... Materials ..................................................................................... Labor .......................................................................................... Factory overhead....................................................................... Total cost in beginning inventory .................................... Cost added during current period: Cost from preceding department............................................. Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost added during current period............................ Total cost charged to department ..................................................
Cost Accounted for as Follows Transferred to Bottling Department ...... Work in Process, ending inventory: Cost from preceding department .... Materials ........................................... Labor .................................................. Factory overhead ............................. Total cost accounted for ........................
Units 7,800 1,200 1,200 1,200 1,200
Labor
25%
Overhead
25%
7,800 1,200 9,000
Total Cost $ 1,120 140 65 120 $ 1,445
Equivalent Units*
Unit Cost**
$ 9,680 1,210 1,960 3,120 $15,970 $17,415
9,000 9,000 8,100 8,100
$1.20 .15 .25 .40 $2.00
% Complete Unit Cost 100% $2.00 100% 100% 25% 25%
Quantity 1,000 2,000 6,000 9,000
$1.20 .15 .25 .40
Total Cost $15,600 $1,440 180 75 120
1,815 $17,415
*Total number of equivalent units required in the cost accounted for section determined as follows:
Equivalent units transferred out ............ Equivalent units in ending inventory .... Total equivalent units..............................
Prior Dept. Cost Materials 7,800 7,800 1,200 1,200 9,000 9,000
Labor 7,800 300 8,100
Overhead 7,800 300 8,100
** Total cost (i.e., the cost in beginning inventory plus the cost added during the current period) divided by the total number of equivalent units required in the cost accounted for section
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Chapter 6
Menezes Chemical Company Blending Department Cost of Production Report For March
Quantity Schedule Beginning inventory ................................................. Received from Refining Department ...................... Added to process in Blending Department ........... Transferred to Finishing Department ..................... Ending inventory ......................................................
Materials
100%
Cost Charged to Department Beginning inventory: Cost from preceding department............................................. Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost in beginning inventory .................................... Cost added during current period: Cost from preceding department............................................. Materials ..................................................................................... Labor .......................................................................................... Factory overhead....................................................................... Total cost added during current period............................ Total cost charged to department ..................................................
Cost Accounted for as Follows Transferred to Finishing Department .... Work in Process, ending inventory: Cost from preceding department .... Materials ............................................ Labor .................................................. Factory overhead .............................. Total cost accounted for.........................
Units 26,000 4,000 4,000 4,000 4,000
Labor
Overhead
80%
90%
26,000 4,000 30,000
Total Cost $4,750 2,415 180 787 $8,112
Equivalent Units*
Unit Cost**
$25,250 12,885 2,740 8,113 $48,988 $57,100
30,000 30,000 29,200 29,600
$1.00 .51 .10 .30 $1.91
% Complete Unit Cost 100% $1.91 100% 100% 80% 90%
Quantity 5,000 20,000 5,000 30,000
$1.00 .51 .10 .30
Total Cost $49,660 $4,000 2,040 320 1,080
7,440 $57,100
*Total number of equivalent units required in the cost accounted for section determined as follows:
Equivalent units transferred out ............ Equivalent units in ending inventory .... Total equivalent units..............................
Prior Dept. Cost Materials 26,000 26,000 4,000 4,000 30,000 30,000
Labor 26,000 3,200 29,200
Overhead 26,000 3,600 29,600
** Total cost (i.e., the cost in beginning inventory plus the cost added during the current period) divided by the total number of equivalent units required in the cost accounted for section
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E6-10 APPENDIX Shankar Manufacturing Company Cutting Department Cost of Production Report For July Quantity Schedule Beginning inventory................................ Started in process this period ............... Transferred to Assembly Department ... Ending inventory .....................................
Materials 60%
100%
Labor 20%
60%
Cost Charged to Department Beginning inventory: Materials ..................................................................................... Labor........................................................................................... Factory overhead ...................................................................... Total cost in beginning inventory...................................... Cost added during current period: Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost added during current period............................ Total cost charged to department .................................................. Cost Accounted for as Follows Transferred to Assembly Department: Beginning inventory ........................ Cost to complete: Materials ............................... Labor ..................................... Factory overhead ................. Started and completed this period . Total cost transferred to Assembly Department ................................ Work in Process, ending inventory: Materials ............................................ Labor .................................................. Factory overhead ............................. Total cost accounted for ........................
Units
Overhead 20%
50%
Total Cost $2,940 390 585 $3,915 $46,530 18,860 27,150 $92,540 $96,455
Quantity 100 900 1,000 850 150 1,000 Equivalent Units*
Unit Cost**
940 920 905
$49.50 20.50 30.00 $100.00
Current % Unit Cost
Total Cost $3,915
100 100 100 750
40% 80% 80% 100%
$49.50 20.50 30.00 100.00
1,980 1,640 2,400
$ 9,935 75,000 $84,935
150 150 150
100% 60% 50%
$49.50 20.50 30.00
$7,425 1,845 2,250
11,520 $96,455
*Number of equivalent units of cost added during the current period determined as follows: To complete beginning inventory .......... Started and completed this period........ Ending inventory ..................................... Total equivalent units..............................
Materials 40 750 150 940
Labor 80 750 90 920
Overhead 80 750 75 905
** Cost added during the current period divided by the number of equivalent units of cost added during the current period
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E6-11 APPENDIX Cantach Tool Company Assembly Department Cost of Production Report For November Quantity Schedule Beginning inventory................................ Received from Cutting Department....... Transferred to Finished Goods .............. Ending inventory .....................................
Materials 50%
90%
Labor 40%
80%
Cost Charged to Department Beginning inventory: Cost from preceding department........................................... Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost in beginning inventory.................................... Cost added during current period: Cost from preceding department............................................. Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost added during current period............................ Total cost charged to department ..................................................
Overhead 40%
80%
Quantity 1,200 2,800 4,000 3,000 1,000 4,000
Total Cost $ 17,280 5,550 2,400 3,600 $ 28,830
Equivalent Units*
Unit Cost**
$ 40,600 29,700 16,932 25,398 $112,630 $141,460
2,800 3,300 3,320 3,320
$14.50 9.00 5.10 7.65 $36.25
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E6-11 APPENDIX (Concluded) Cost Accounted for as Follows Transferred to Finished Goods: Beginning inventory ......................... Cost to complete: Materials ............................... Labor ..................................... Factory overhead ................. Started and completed this period Total cost transferred to Finished Goods Work in Process, ending inventory: Cost from preceding department .... Materials ............................................ Labor ................................................. Factory overhead .............................. Total cost accounted for ........................
Units
Current % Unit Cost
Total Cost $28,830
1,200 1,200 1,200 1,800
50% 60% 60% 100%
$9.00 5.10 7.65 36.25
1,000 1,000 1,000 1,000
100% 90% 80% 80%
$14.50 9.00 5.10 7.65
5,400 3,672 5,508
$14,500 8,100 4,080 6,120
$ 43,410 65,250 $108,660
32,800 $141,460
*Number of equivalent units of cost added during the current period determined as follows:
To complete beginning inventory .......... Started and completed this period........ Ending inventory ..................................... Total equivalent units..............................
Prior Dept. Cost Materials 0 600 1,800 1,800 1,000 900 2,800 3,300
Labor 720 1,800 800 3,320
Overhead 720 1,800 800 3,320
** Cost added during the current period divided by the number of equivalent units of cost added during the current period
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E6-12 APPENDIX Southwell Chemical Corporation Blending Department Cost of Production Report For May Quantity Schedule Beginning inventory................................ Received from Refining Department ..... Added to process in Blending Department Transferred to Finished Goods ............. Ending inventory .....................................
Materials 100%
100%
Cost Charged to Department Beginning inventory: Cost from preceding department............................................. Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost in beginning inventory...................................... Cost added during current period: Cost from preceding department............................................. Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost added during current period............................ Total cost charged to department ..................................................
Labor 20%
60%
Overhead 40%
80%
Quantity 2,000 5,000 5,000 12,000 10,500 1,500 12,000
Total Cost $2,460 500 150 600 $3,710
Equivalent Units*
Unit Cost**
$12,500 2,500 3,300 7,630 $25,930 $29,640
10,000 10,000 11,000 10,900
$1.25 .25 .30 .70 $2.50
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E6-12 APPENDIX (Concluded) Cost Accounted for as Follows Transferred to Finished Goods: Beginning inventory ......................... Cost to complete: Materials ............................... Labor .................................... Factory overhead ................. Started and completed this period Total cost transferred to Finished Goods .......................................... Work in Process, ending inventory: Cost from preceding department .... Materials ............................................ Labor .................................................. Factory overhead .............................. Total cost accounted for ........................
Units
Current % Unit Cost
Total Cost $3,710
2,000 2,000 2,000 8,500
0% 80% 60% 100%
$ .25 .30 .70 2.50
0 480 840
$ 5,030 21,250 $26,280
1,500 1,500 1,500 1,500
100% 100% 60% 80%
$1.25 .25 .30 .70
$1,875 375 270 840
3,360 $29,640
*Number of equivalent units of cost added during the current period determined as follows:
To complete beginning inventory .......... Started and completed this period........ Ending inventory ..................................... Total equivalent units..............................
Prior Dept. Cost Materials 0 0 8,500 8,500 1,500 1,500 10,000 10,000
Labor 1,600 8,500 900 11,000
Overhead 1,200 8,500 1,200 10,900
** Cost added during the current period divided by the number of equivalent units of cost added during the current period
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PROBLEMS P6-1 (1)
Meninquez Cabinet Company Cutting Department Cost of Production Report For August
Quantity Schedule Beginning inventory................................ Started in process this period .............. Transferred to Assembly Department ... Ending inventory .....................................
Materials
90%.
Labor
60%
Cost Charged to Department Beginning inventory: Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost in beginning inventor........................................ Cost added during current period: Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost added during current period............................ Total cost charged to department ..................................................
Cost Accounted for as Follows Transferred to Assembly Department ... Work in Process, ending inventory: Materials ............................................ Labor .................................................. Factory overhead .............................. Total cost accounted for.........................
Units 650 150 150 150
Overhead
60%
Total Cost $ 5,365 530 795 $6,690 $26,035 8,350 12,525 $46,910 $53,600
Quantity 200 600 800 650 150 800 Equivalent Units*
785 740 740
$40.00 12.00 18.00
$ 40.00 12.00 18.00 $ 70.00
% Complete Unit Cost 100% $70.00 90% 60% 60%
Unit Cost**
Total Cost $45,500 $5,400 1,080 1,620
8,100 $53,600
*Total number of equivalent units required in the cost accounted for section determined as follows:
Equivalent units transferred out ..... Equivalent units in ending inventory Total equivalent units .......................
Materials 650 135 785
Labor 650 90 740
Overhead 650 90 740
** Total cost (i.e., the cost in beginning inventory plus the cost added during the current period) divided by the total number of equivalent units required in the cost accounted for section
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P6-1 (Continued) Meninquez Cabinet Company Assembly Department Cost of Production Report For August Quantity Schedule Beginning inventory................................ Received from Cutting Department....... Transferred to Finished Goods .............. Ending inventory .....................................
Materials
Labor
Overhead
40%
20%
20%
Cost Charged to Department Beginning inventory: Cost from preceding department ........................................... Materials .................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost in beginning inventory .................................... Cost added during current period: Cost from preceding department............................................. Materials .................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost added during current period ......................... Total cost charged to department ..................................................
Total Cost $ 17,410 3,451 3,611 3,611 $ 28,083 $ 45,500 14,273 20,989 20,989 $101,751 $129,834
Quantity 250 650 900 800 100 900 Equivalent Units*
900 840 820 820
Unit Cost**
$ 69.90 21.10 30.00 30.00 $151.00
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Chapter 6
P6-1 (Concluded)
Cost Accounted for as Follows Transferred to Finished Goods .............. Work in Process, ending inventory: Cost from preceding department .... Materials ............................................ Labor .................................................. Factory overhead .............................. Total cost accounted for ........................
Units 800 100 100 100 100
% Complete Unit Cost 100% $151.00 100% 40% 20% 20%
$69.90 21.10 30.00 30.00
Total Cost $120,800 $6,990 844 600 600
9,034 $129,834
*Total number of equivalent units required in the cost accounted for section determined as follows:
Equivalent units transferred out ..... Equivalent units in ending inventory Total equivalent units .......................
Prior Dept. Cost Materials 800 800 100 40 900 840
Labor 800 20 820
Overhead 800 20 820
** Total cost (i.e., the cost in beginning inventory plus the cost added during the current period) divided by the total number of equivalent units required in the cost accounted for section
(2)
Work in Process—Cutting Department ...................... Work in Process—Assembly Department .................. Materials ..............................................................
26,035 14,273
Work in Process—Cutting Department ...................... Work in Process—Assembly Department .................. Payroll ..................................................................
8,350 20,989
Work in Process—Cutting Department ...................... Work in Process—Assembly Department .................. Applied Factory Overhead..................................
12,525 20,989
Work in Process—Assembly Department .................. Work in Process—Cutting Department .............
45,500
Finished Goods Inventory ........................................... Work in Process—Assembly Department ........
120,800
40,308
29,339
33,514 45,500 120,800
Chapter 6
P6-2 (1)
6-19
Rimirez Tool Corporation Casting Department Cost of Production Report For December
Quantity Schedule
Materials
Labor
Overhead
Beginning inventory................................ Started in process this period .............. Transferred to Finishing Department .... Ending inventory .....................................
1,000 8,000 9,000 100%
80%
Cost Charged to Department Beginning inventory: Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost in beginning inventory...................................... Cost added during current period: Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost added during current period............................ Total cost charged to department ..................................................
Cost Accounted for as Follows Transferred to Finishing Department .... Work in Process, ending inventory: Materials ............................................ Labor .................................................. Factory overhead .............................. Total cost accounted for ........................
Quantity
Units 7,500 1,500 1,500 1,500
80%
7,500 1,500 9,000
Total Cost $915 60 90 $ 1,085
Equivalent Units*
Unit Cost**
$17,085 4,290 6,435 $27,810 $28,875
9,000 8,700 8,700
$2.00 .50 .75 $3.25
% Complete Unit Cost 100% $3.25 100% 80% 80%
$2.00 .50 .75
Total Cost $24,375 $3,000 600 900
4,500 $28,875
*Total number of equivalent units required in the cost accounted for section determined as follows:
Equivalent units transferred out ............................. Equivalent units in ending inventory...................... Total equivalent units ...............................................
Materials 7,500 1,500 9,000
Labor 7,500 1,200 8,700
Overhead 7,500 1,200 8,700
** Total cost (i.e., the cost in beginning inventory plus the cost added during the current period) divided by the total number of equivalent units required in the cost accounted for section
6-20
Chapter 6
P6-2 (Continued) Rimirez Tool Corporation Finishing Department Cost of Production Report For December Quantity Schedule
Labor
Overhead
Beginning inventory Received from Casting Department ......................... Transferred to Finished Goods ................................ Ending inventory ........................................................
Quantity 1,500 7,500 9,000
40%
Cost Charged to Department Beginning inventory: Cost from preceding department............................................. Labor........................................................................................... Factory overhead ...................................................................... Total cost in beginning inventory...................................... Cost added during current period: Cost from preceding department............................................. Labor........................................................................................... Factory overhead....................................................................... Total cost added during current period............................ Total cost charged to department ..................................................
50%
7,000 2,000 9,000
Total Cost $ 4,785 201 555 $ 5,541
Equivalent Units*
Unit Cost**
$24,375 2,919 3,125 $30,419 $35,960
9,000 7,800 8,000
$3.24 .40 .46 $4.10
Chapter 6
6-21
P6-2 (Concluded) Cost Accounted for as Follows Transferred to Finished Goods .............. Work in Process, ending inventory: Cost from preceding department .... Labor .................................................. Factory overhead .............................. Total cost accounted for.........................
Units 7,000 2,000 2,000 2,000
% Complete Unit Cost 100% $4.10 100% 40% 50%
$3.24 .40 .46
Total Cost $28,700 $6,480 320 460
7,260 $35,960
*Total number of equivalent units required in the cost accounted for section determined as follows:
Equivalent units transferred out......................... Equivalent units in ending inventory ................. Total equivalent units .........................................
Prior Dept. Cost 7,000 2,000 9,000
Labor 7,000 800 7,800
Overhead 7,000 1,000 8,000
** Total cost (i.e., the cost in beginning inventory plus the cost added during the current period) divided by the total number of equivalent units required in the cost accounted for section
(2)
Work in Process—Casting Department...................... Materials ..............................................................
17,085
Work in Process—Casting Department...................... Work in Process—Finishing Department................... Payroll ..................................................................
4,290 2,919
Work in Process—Casting Department...................... Work in Process—Finishing Department................... Applied Factory Overhead..................................
6,435 3,125
Work in Process—Finishing Department................... Work in Process—Casting Department ............
24,375
Finished Goods Inventory ........................................... Work in Process—Finishing Department..........
28,700
17,085
7,209
9,560 24,375 28,700
6-22
P6-3 (1)
Chapter 6
Jetter Engine Corporation Casting Department Cost of Production Report For February
Quantity Schedule Beginning inventory................................ Started in process this period ............... Transferred to Assembly Department ... Ending inventory .....................................
Materials
100%
Labor
80%
Cost Charged to Department Beginning inventory: Materials ..................................................................................... Labor........................................................................................... Factory overhead ...................................................................... Total cost in beginning inventory...................................... Cost added during current period: Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost added during current period............................ Total cost charged to department ..................................................
Cost Accounted for as Follows Transferred to Assembly Department ... Work in Process, ending inventory: Materials ........................................... Labor .................................................. Factory overhead .............................. Total cost accounted for.........................
Units 2,700 800 800 800
Overhead
90%
Quantity 500 3,000 3,500 2,700 800 3,500
Total Cost $ 10,925 338 2,839 $ 14,102
Equivalent Units*
$146,575 16,362 48,461 $211,398 $225,500
3,500 3,340 3,420
% Complete Unit Cost 100% $65.00 100% 80% 90%
$45.00 5.00 15.00
Unit Cost**
$
45.00 5.00 15.00
$
65.00
Total Cost $175,500 $36,000 3,200 10,800
50,000 $225,500
*Total number of equivalent units required in the cost accounted for section determined as follows:
Equivalent units transferred out ............................... Equivalent units in ending inventory........................ Total equivalent units ................................................
Materials 2,700 800 3,500
Labor 2,700 640 3,340
Overhead 2,700 720 3,420
** Total cost (i.e., the cost in beginning inventory plus the cost added during the current period) divided by the total number of equivalent units required in the cost accounted for section
Chapter 6
6-23
P6-3 (Continued) Jetter Engine Corporation Assembly Department Cost of Production Report For February Quantity Schedule Beginning inventory................................ Received from Casting Department ..... Transferred to Finishing Department .... Ending inventory .....................................
Materials
70%
Labor
30%
Cost Charged to Department Beginning inventory: Cost from preceding department ........................................... Materials ..................................................................................... Labor .......................................................................................... Factory overhead ...................................................................... Total cost in beginning inventory.................................... Cost added during current period: Cost from preceding department............................................. Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost added during current period............................ Total cost charged to department .................................................
Cost Accounted for as Follows Transferred to Finishing Department .... Work in Process, ending inventory Cost from preceding department .... Materials ............................................ Labor .................................................. Factory overhead .............................. Total cost accounted for.........................
Units 2,900 800 800 800 800
Overhead
30%
Quantity 1,000 2,700 3,700 2,900 800 3,700
Total Cost $ 63,150 40,258 12,426 12,426 $128,260
Equivalent Units*
Unit Cost**
$175,500 116,480 44,408 44,408 $380,796 $509,056
3,700 3,460 3,140 3,140
$64.50 45.30 18.10 18.10 $146.00
% Complete Unit Cost 100% $146.00 100% 70% 30% 30%
$
64.50 45.30 18.10 18.10
Total Cost $423,400 $51,600 25,368 4,344 4,344
85,656 $509,056
*Total number of equivalent units required in the cost accounted for section determined as follows:
Equivalent units transferred out ............ Equivalent units in ending inventory .... Total equivalent units..............................
Prior Dept. Cost Materials 2,900 2,900 800 560 3,700 3,460
Labor 2,900 240 3,140
Overhead 2,900 240 3,140
** Total cost (i.e., the cost in beginning inventory plus the cost added during the current period) divided by the total number of equivalent units required in the cost accounted for section
6-24
Chapter 6
P6-3 (Continued) Jetter Engine Corporation Finishing Department Cost of Production Report For February Quantity Schedule Beginning inventory ................................................... Received from Assembly Department ...................... Transferred to Finished Goods ................................ Ending inventory.........................................................
Labor
50%
Cost Charged to Department Beginning inventory: Cost from preceding department............................................. Labor........................................................................................... Factory overhead....................................................................... Total cost in beginning inventory ................................... Cost added during current period: Cost from preceding department............................................. Labor........................................................................................... Factory overhead....................................................................... Total cost added during current period............................ Total cost charged to department .................................................
Cost Accounted for as Follows Transferred to Finished Goods .............. Work in Process, ending inventory: Cost from preceding department .... Labor .................................................. Factory overhead .............................. Total cost accounted for.........................
Units 2,800 400 400 400
Overhead
50%
Quantity 300 2,900 3,200 2,800 400 3,200
Total Cost $ 42,840 2,760 4,140 $ 49,740
Equivalent Units*
$423,400 12,240 18,360 $454,000 $503,740
3,200 3,000 3,000
$ 145.70 5.00 7.50
$ 145.70 5.00 7.50 $ 158.20
% Complete Unit Cost 100% $ 158.20 100% 50% 50%
Unit Cost**
Total Cost $442,960 $58,280 1,000 1,500
60,780 $503,740
*Total number of equivalent units required in the cost accounted for section determined as follows:
Equivalent units transferred out ............................... Equivalent units in ending inventory........................ Total equivalent units .................................................
Prior Dept. Cost 2,800 400 3,200
Labor 2,800 200 3,000
Overhead 2,800 200 3,000
** Total cost (i.e., the cost in beginning inventory plus the cost added during the current period) divided by the total number of equivalent units required in the cost accounted for section
Chapter 6
6-25
P6-3 (Concluded) (2)
Work in Process—Casting Department...................... Work in Process—Assembly Department .................. Materials ...............................................................
146,575 116,480
Work in Process—Casting Department...................... Work in Process—Assembly Department .................. Work in Process—Finishing Department................... Payroll ..................................................................
16,362 44,408 12,240
Work in Process—Casting Department...................... Work in Process—Assembly Department .................. Work in Process—Finishing Department................... Applied Factory Overhead..................................
48,461 44,408 18,360
Work in Process—Assembly Department .................. Work in Process—Casting Department.............
175,500
Work in Process—Finishing Department................... Work in Process—Assembly Department .........
423,400
Finished Goods inventory ........................................... Work in Process—Finishing Department..........
442,960
263,055
73,010
111,229 175,500 423,400 442,960
6-26
P6-4 (1)
Chapter 6
Peneli Cologne Company Blending Department Cost of Production Report For June
Quantity Schedule Beginning inventory................................ Started in process this period ............... Transferred to Finishing Department .... Ending inventory .....................................
Materials
60%
Labor
20%
Cost Charged to Department Beginning inventory: Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost in beginning inventory...................................... Cost added during current period: Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost added during current period ........................... Total cost charged to department .................................................
Cost Accounted for as Follows Transferred to Finishing Department .... Work in Process, ending inventory: Materials ............................................ Labor .................................................. Factory overhead .............................. Total cost accounted for.........................
Units 6,400 600 600 600
Overhead
25%
Quantity 1,000 6,000 7,000 6,400 600 7,000
Total Cost $ 19,620 944 2,375 $ 22,939
Equivalent Units*
Unit Cost**
$129,100 6,880 29,065 $165,045 $187,984
6,760 6,520 6,550
$22.00 1.20 4.80 $28.00
% Complete Unit Cost 100% $28.00 60% 20% 25%
$22.00 1.20 4.80
Total Cost $179,200 $7,920 144 720
8,784 $187,984
*Total number of equivalent units required in the cost accounted for section determined as follows:
Equivalent units transferred out......................... Equivalent units in ending inventory ................. Total equivalent units...........................................
Materials 6,400 360 6,760
Labor 6,400 120 6,520
Overhead 6,400 150 6,550
** Total cost (i.e., the cost in beginning inventory plus the cost added during the current period) divided by the total number of equivalent units required in the cost accounted for section
Chapter 6
6-27
P6-4 (Continued) Peneli Cologne Company Finishing Department Cost of Production Report For June Quantity Schedule Beginning inventory ................................................... Received from Blending Department ...................... Added to process in Finishing Department............. Transferred to Finished Goods ................................. Ending inventory .......................................................
Materials
100%
Cost Charged to Department Beginning inventory: Cost from preceding department ........................................... Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost in beginning inventory...................................... Cost added during current period: Cost from preceding department............................................. Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost added during current period............................ Total cost charged to department ..................................................
Labor
70%
Overhead
70%
Quantity 1,400 6,400 19,200 27,000 26,000 1,000 27,000
Total Cost $ 8,450 1,395 106 659 $ 10,610
Equivalent Units*
Unit Cost**
$179,200 28,305 19,919 60,751 $288,175 $298,785
27,000 27,000 26,700 26,700
$ 6.95 1.10 .75 2.30 $11.10
6-28
Chapter 6
P6-4 (Concluded) Cost Accounted for as Follows Transferred to Finished Goods .............. Work in Process, ending inventory: Cost from preceding department .... Materials ............................................ Labor .................................................. Factory overhead .............................. Total cost accounted for ........................
Units 26,000 1,000 1,000 1,000 1,000
% Complete Unit Cost 100% $11.10 100% 100% 70% 70%
$ 6.95 1.10 .75 2.30
Total Cost $288,600 $6,950 1,100 525 1,610
10,185 $298,785
*Total number of equivalent units required in the cost accounted for section determined as follows:
Equivalent units transferred out ............ Equivalent units in ending inventory .... Total equivalent units..............................
Prior Dept. Cost Materials 26,000 26,000 1,000 1,000 27,000 27,000
Labor 26,000 700 26,700
Overhead 26,000 700 26,700
** Total cost (i.e., the cost in beginning inventory plus the cost added during the current period) divided by the total number of equivalent units required in the cost accounted for section
(2)
Work in Process—Blending Department ................... Work in Process—Finishing Department................... Materials ..............................................................
129,100 28,305
Work in Process—Blending Department ................... Work in Process—Finishing Department................... Payroll ...................................................................
6,880 19,919
Work in Process—Blending Department ................... Work in Process—Finishing Department................... Applied Factory Overhead .................................
29,065 60,751
Work in Process—Finishing Department................... Work in Process—Blending Department ..........
179,200
Finished Goods inventory ........................................... Work in Process—Finishing Department..........
288,600
157,405
26,799
89,816 179,200 288,600
Chapter 6
6-29
P6-5 (1)
Hi-tech Chemical Corporation Refining Department Cost of Production Report For March
Quantity Schedule Beginning inventory .................................................. Started in process this period................................... Transferred to Blending Department ........................ Ending inventory.........................................................
Materials
Labor
100%
75%
Cost Charged to Department Beginning inventory: Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost in beginning inventory .................................... Cost added during current period: Materials .................................................................................... Labor .......................................................................................... Factory overhead....................................................................... Total cost added during current period............................ Total cost charged to department .................................................
Cost Accounted for as Follows Transferred to Blending Department..... Work in Process, ending inventory: Materials ............................................ Labor ................................................. Factory overhead .............................. Total cost accounted for.........................
Units 7,000 1,000 1,000 1,000
Overhead
Total Cost $728 30 60 $818
Equivalent Units*
$7,272 1,520 2,940 $11,732 $12,550
8,000 7,750 7,500
$1.00 .20 .40
7,000 1,000 8,000
50%
% Complete Unit Cost 100% $1.60 100% 75% 50%
Quantity 800 7,200 8,000
Unit Cost**
$
1.00 .20 .40
$
1.60
Total Cost 11,200 $1,000 150 200
1,350 $12,550
*Total number of equivalent units required in the cost accounted for section determined as follows:
Equivalent units transferred out ............ Equivalent units in ending inventory .... Total equivalent units..............................
Materials 7,000 1,000 8,000
Labor 7,000 750 7,750
Overhead 7,000 500 7,500
** Total cost (i.e., the cost in beginning inventory plus the cost added during the current period) divided by the total number of equivalent units required in the cost accounted for section
6-30
Chapter 6
P6-5 (Continued) Hi-tech Chemical Corporation Blending Department Cost of Production Report For March Quantity Schedule Beginning inventory................................ Received from Refining Department .... Added to process in Blending Department Transferred to Finished Goods ............. Ending inventory .....................................
Materials
80%
Cost Charged to Department Beginning inventory: Cost from preceding department............................................. Materials ..................................................................................... Labor........................................................................................... Factory overhead ...................................................................... Total cost in beginning inventory...................................... Cost added during current period: Cost from preceding department............................................. Materials .................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost added during current period ........................... Total cost charged to department ..................................................
Labor
40%
Overhead
40%
Quantity 1,400 7,000 1,800 10,200 9,200 1,000 10,200
Total Cost $ 1,754 620 68 160 $ 2,602
Equivalent Units*
Unit Cost**
$11,200 4,380 3,100 5,600 $24,280 $26,882
10,200 10,000 9,600 9,600
$1.27 .50 .33 .60 $2.70
Chapter 6
6-31
P6-5 (Concluded) Cost Accounted for as Follows Transferred to Finished Goods .............. Work in Process, ending inventory: Cost from preceding department .... Materials ............................................ Labor ................................................. Factory overhead .............................. Total cost accounted for.........................
Units 9,200 1,000 1,000 1,000 1,000
% Complete Unit Cost 100% $2.70 100% 80% 40% 40%
$1.27 .50 .33 .60
Total Cost $24,840 $1,270 400 132 240
2,042 $26,882
*Total number of equivalent units required in the cost accounted for section determined as follows:
Equivalent units transferred out ..... Equivalent units in ending inventory Total equivalent units .......................
Prior Dept. Cost Materials 9,200 9,200 1,000 800 10,200 10,000
Labor 9,200 400 9,600
Overhead 9,200 400 9,600
** Total cost (i.e., the cost in beginning inventory plus the cost added during the current period) divided by the total number of equivalent units required in the cost accounted for section
(2) Work in Process—Refining Department .................... Work in Process—Blending Department ................... Materials ...............................................................
7,272 4,380
Work in Process—Refining Department .................... Work in Process—Blending Department ................... Payroll ...................................................................
1,520 3,100
Work in Process—Refining Department .................... Work in Process—Blending Department ................... Applied Factory Overhead .................................
2,940 5,600
Work in Process—Blending Department ................... Work in Process—Refining Department ..........
11,200
Finished Goods Inventory ........................................... Work in Process—Blending Department .........
24,840
11,652
4,620
8,540 11,200 24,840
6-32
Chapter 6
P6-6 APPENDIX (1)
Upton Manufacturing Company Cutting Department Cost of Production Report For October
Quantity Schedule Beginning inventory................................ Started in process this period ............... Transferred to Assembly Department ... Ending inventory .....................................
Materials 90%
100%
Labor 40%
80%
Cost Charged to Department Beginning inventory: Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost in beginning inventory...................................... Cost added during current period: Materials ..................................................................................... Labor........................................................................................... Factory overhead ...................................................................... Total cost added during current period............................ Total cost charged to department .................................................. Cost Accounted for as Follows Transferred to Assembly Department: Beginning inventory ......................... Cost to complete: Materials ............................... Labor ..................................... Factory overhead ................. Started and completed this period . Total cost transferred to Assembly Department ................................. Work in Process, ending inventory: Materials ............................................ Labor .................................................. Factory overhead .............................. Total cost accounted for.........................
Units
Overhead 20%
100%
Quantity 1,000 9,000 10,000 8,500 1,500 10,000
Total Cost $8,010 1,750 790 $ 10,550
Equivalent Units*
Unit Cost**
$ 81,900 18,600 39,200 $139,700 $150,250
9,100 9,300 9,800
$ 9.00 2.00 4.00 $15.00
Current % Unit Cost
Total Cost $10,550
1,000 1,000 1,000 7,500
10% 60% 80% 100%
$ 9.00 2.00 4.00 15.00
900 1,200 3,200
$ 15,850 112,500 $128,350
1,500 1,500 1,500
100% 80% 100%
$ 9.00 2.00 4.00
$13,500 2,400 6,000
21,900 $150,250
Chapter 6
6-33
P6-6 APPENDIX (Continued) * Number of equivalent units of cost added during the current period determined as follows:
To complete beginning inventory ... Started and completed this period Ending inventory............................... Total equivalent units .......................
Materials 100 7,500 1,500 9,100
Labor 600 7,500 1,200 9,300
Overhead 800 7,500 1,500 9,800
** Cost added during the current period divided by the number of equivalent units of cost added during the current period
6-34
Chapter 6
P6-6 APPENDIX (Continued) Upton Manufacturing Company Assembly Department Cost of Production Report For October Quantity Schedule Beginning inventory................................ Received from Cutting Department....... Transferred to Finished Goods Inventory Ending inventory .....................................
Materials 75%
60%
Labor 60%
40%
Cost Charged to Department Beginning inventory: Cost from preceding department............................................. Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost in beginning inventory...................................... Cost added during current period: Cost from preceding department............................................. Materials ..................................................................................... Labor........................................................................................... Factory overhead ...................................................................... Total cost added during current period............................ Total cost charged to department .................................................. Cost Accounted for as Follows Transferred to Finished Goods: Beginning inventory ........................ Cost to complete: Materials ............................... Labor ..................................... Factory overhead ................. Started and completed this period . Total cost transferred to Finished Goods .......................................... Work in Process, ending inventory: Cost from preceding department .... Materials ............................................ Labor .................................................. Factory overhead .............................. Total cost accounted for.........................
Units
Overhead 60%
40%
Quantity 2,000 8,500 10,500 9,500 1,000 10,500
Total Cost $ 4,000 400 800 1,600 $ 6,800
Equivalent Units*
Unit Cost**
$128,350 30,100 21,315 30,015 $209,780 $216,580
8,500 8,600 8,700 8,700
$15.10 3.50 2.45 3.45 $24.50
Current % Unit Cost
Total Cost $ 6,800
2,000 2,000 2,000 7,500
25% 40% 40% 100%
$ 3.50 2.45 3.45 24.50
1,750 1,960 2,760
$ 13,270 183,750 $197,020
1,000 1,000 1,000 1,000
100% 60% 40% 40%
$15.10 3.50 2.45 3.45
$15,100 2,100 980 1,380
19,560 $216,580
Chapter 6
6-35
P6-6 APPENDIX (Concluded) *Number of equivalent units of cost added during the current period determined as follows:
To complete beginning inventory ... Started and completed this period Ending inventory............................... Total equivalent units ......................
Prior Dept. Cost Materials 0 500 7,500 7,500 1,000 600 8,500 8,600
Labor 800 7,500 400 8,700
Overhead 800 7,500 400 8,700
** Cost added during the current period divided by the number of equivalent units of cost added during the current period
(2)
Work in Process—Cutting Department ...................... Work in Process—Assembly Department .................. Materials ..............................................................
81,900 30,100
Work in Process—Cutting Department ...................... Work in Process—Assembly Department .................. Payroll ..................................................................
18,600 21,315
Work in Process—Cutting Department ...................... Work in Process—Assembly Department .................. Applied Factory Overhead..................................
39,200 30,015
Work in Process—Assembly Department .................. Work in Process—Cutting Department .............
128,350
Finished Goods Inventory ........................................... Work in Process—Assembly Department ........
197,020
112,000
39,915
69,215 128,350 197,020
6-36
P6-7 APPENDIX (1)
Chapter 6
Felicia Manufacturing Company Fabricating Department Cost of Production Report For August
Quantity Schedule Beginning inventory................................ Started in process this period .............. Transferred to Finishing Department .... Ending inventory .....................................
Materials 100%
100%
Labor 40%
80%
Cost Charged to Department Beginning inventory: Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost in beginning inventory...................................... Cost added during current period: Materials .................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost added during current period............................ Total cost charged to department ..................................................
Overhead 80%
90%
Quantity 400 1,200 1,600 1,100 500 1,600
Total Cost $ 29,280 1,900 11,800 $ 42,980
Equivalent Units*
$90,000 16,080 46,740 $152,820 $195,800
1,200 1,340 1,230
Unit Cost**
$ 75.00 12.00 38.00 $125.00
Chapter 6
6-37
P6-7 APPENDIX (Continued) Cost Accounted for as Follows Transferred to Finishing Department: Beginning inventory ......................... Cost to complete: Materials ............................... Labor ..................................... Factory overhead ................. Started and completed this period Total cost transferred to Finishing Department ................................. Work in Process, ending inventory: Materials ............................................ Labor .................................................. Factory overhead .............................. Total cost accounted for ........................
Units
Current % Unit Cost
Total Cost $42,980
400 400 400 700
0% 60% 20% 100%
$ 75.00 12.00 38.00 125.00
0 2,880 3,040
$ 48,900 87,500 $136,400
500 500 500
100% 80% 90%
$ 75.00 12.00 38.00
$37,500 4,800 17,100
59,400 $195,800
*Number of equivalent units of cost added during the current period determined as follows:
To complete beginning inventory ....................... Started and completed this period..................... Ending inventory .................................................. Total equivalent units...........................................
Materials 0 700 500 1,200
Labor 240 700 400 1,340
Overhead 80 700 450 1,230
** Cost added during the current period divided by the number of equivalent units of cost added during the current period
6-38
Chapter 6
P6-7 APPENDIX (Continued) Felicia Manufacturing Company Finishing Department Cost of Production Report For August Quantity Schedule Beginning inventory................................ Received from Fabricating Department Transferred to Finished Goods Inventory Ending inventory .....................................
Materials 40%
100%
Labor 20%
60%
Cost Charged to Department Beginning inventory: Cost from preceding department............................................. Materials .................................................................................... Labor........................................................................................... Factory overhead ...................................................................... Total cost in beginning inventory ................................... Cost added during current period: Cost from preceding department............................................. Materials ..................................................................................... Labor........................................................................................... Factory overhead ...................................................................... Total cost added during current period............................ Total cost charged to department .................................................. Cost Accounted for as Follows Transferred to Finished Goods: Beginning inventory ......................... Cost to complete: Materials ............................... Labor ..................................... Factory overhead ................ Started and completed this period . Total cost transferred to Finished Goods .......................................... Work in Process, ending inventory: Cost from preceding department .... Materials ............................................ Labor .................................................. Factory overhead ............................. Total cost accounted for ........................
Units
Overhead 20%
60%
Quantity 600 1,100 1,700 1,300 400 1,700
Total Cost $ 74,000 230 1,600 2,520 $ 78,350
Equivalent Units*
$136,400 2,920 19,880 28,400 $187,600 $265,950
1,100 1,460 1,420 1,420
Unit Cost**
$ 124.00 2.00 14.00 20.00 $ 160.00
Current % Unit Cost
Total Cost $78,350
600 600 600 700
60% 80% 80% 100%
$
2.00 14.00 20.00 160.00
720 6,720 9,600
$ 95,390 112,000 $207,390
400 400 400 400
100% 100% 60% 60%
$124.00 2.00 14.00 20.00
$49,600 800 3,360 4,800
58,560 $265,950
Chapter 6
6-39
6-7 APPENDIX (Concluded) *Number of equivalent units of cost added during the current period determined as follows:
To complete beginning inventory ... Started and completed this period Ending inventory............................... Total equivalent units .......................
Prior Dept. Cost Materials 0 360 700 700 400 400 1,100 1,460
Labor 480 700 240 1,420
Overhead 480 700 240 1,420
** Cost added during the current period divided by the number of equivalent units of cost added during the current period
(2)
Work in Process—Fabricating Department ............... Work in Process—Finishing Department................... Materials ..............................................................
90,000 2,920
Work in Process—Fabricating Department ............... Work in Process—Finishing Department................... Payroll ..................................................................
16,080 19,880
Work in Process—Fabricating Department ............... Work in Process—Finishing Department................... Applied Factory Overhead..................................
46,740 28,400
Work in Process—Finishing Department................... Work in Process—Fabricating Department ......
136,400
Finished Goods Inventory ........................................... Work in Process-Finishing Department ............
207,390
92,920
35,960
75,140 136,400 207,390
6-40
P6-8 APPENDIX (1)
Chapter 6
Tatanach Beverage Company Mashing Department Cost of Production Report For September
Quantity Schedule Beginning inventory................................ Started in process this period ............... Transferred to Blending Department..... Ending inventory .....................................
Materials 90%
60%
Labor 60%
40%
Overhead 30%
20%
Quantity 600 3,000 3,600 3,100 500 3,600
Cost Charged to Department Beginning inventory: Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost in beginning inventory......................................
Total Cost $ 1,088 172 172 $ 1,432
Equivalent Units*
Unit Cost**
Cost added during current period: Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost added during current period............................ Total cost charged to department ..................................................
$ 6,006 1,470 3,020 $10,496 $11,928
2,860 2,940 3,020
$2.10 .50 1.00 $3.60
Chapter 6
6-41
P6-8 APPENDIX (Continued) Cost Accounted for as Follows Transferred to Blending Department: Beginning inventory ......................... Cost to complete: Materials ............................... Labor ..................................... Factory overhead ................. Started and completed this period Total cost transferred to Blending Department ................................. Work in Process, ending inventory: Materials ............................................ Labor .................................................. Factory overhead .............................. Total cost accounted for.........................
Units
Current % Unit Cost
Total Cost $1,432
600 600 600 2,500
10% 40% 70% 100%
$2.10 .50 1.00 3.60
126 120 420
$ 2,098 9,000 $11,098
500 500 500
60% 40% 20%
$2.10 .50 1.00
$ 630 100 100
830 $11,928
*Number of equivalent units of cost added during the current period determined as follows:
To complete beginning inventory ... Started and completed this period . Ending inventory............................... Total equivalent units .......................
Materials 60 2,500 300 2,860
Labor 240 2,500 200 2,940
Overhead 420 2,500 100 3,020
** Cost added during the current period divided by the number of equivalent units of cost added during the current period
6-42
Chapter 6
P6-8 APPENDIX (Continued) Tatanach Beverage Company Blending Department Cost of Production Report For September Quantity Schedule Beginning inventory ................................................... Received from Mashing Department ........................ Added to process in Blending Department ............. Transferred to Finished Goods Inventory ............... Ending inventory.........................................................
Materials 50%
100%
Cost Charged to Department Beginning inventory: Cost from preceding department............................................. Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost in beginning inventory...................................... Cost added during current period: Cost from preceding department............................................. Materials ..................................................................................... Labor........................................................................................... Factory overhead....................................................................... Total cost added during current period............................ Total cost charged to department .................................................. Cost Accounted for as Follows Transferred to Finished Goods: Beginning inventory ......................... Cost to complete: Materials ............................... Labor ..................................... Factory overhead ................. Started and completed this period Total cost transferred to Finished Goods .......................................... Work in Process, ending inventory: Cost from preceding department .... Materials ............................................ Labor .................................................. Factory overhead .............................. Total cost accounted for ........................
Units
Labor 20%
60%
Overhead 20%
60%
Quantity 1,000 3,100 3,100 7,200 6,400 800 7,200
Total Cost $ 1,770 100 55 74 $ 1,999
Equivalent Units*
Unit Cost**
$11,098 1,407 2,004 2,672 $17,181 $19,180
6,200 6,700 6,680 6,680
$1.79 .21 .30 .40 $2.70
Current % Unit Cost
Total Cost $1,999
1,000 1,000 1,000 5,400
50% 80% 80% 100%
$ .21 .30 .40 2.70
105 240 320
$ 2,664 14,580 $17,244
800 800 800 800
100% 100% 60% 60%
$1.79 .21 .30 .40
$1,432 168 144 192
1,936 $19,180
Chapter 6
6-43
P6-8 APPENDIX (Concluded) *Number of equivalent units of cost added during the current period determined as follows:
To complete beginning inventory ... Started and completed this period Ending inventory............................... Total equivalent units .......................
Prior Dept. Cost Materials 0 500 5,400 5,400 800 800 6,200 6,700
Labor 800 5,400 480 6,680
Overhead 800 5,400 480 6,680
** Cost added during the current period divided by the number of equivalent units of cost added during the current period
(2)
Work in Process—Mashing Department .................... Work in Process—Blending Department ................... Materials ..............................................................
6,006 1,407
Work in Process—Mashing Department .................... Work in Process—Blending Department ................... Payroll ..................................................................
1,470 2,004
Work in Process—Mashing Department .................... Work in Process—Blending Department ................... Applied Factory Overhead..................................
3,020 2,672
Work in Process—Blending Department ................... Work in Process—Mashing Department ...........
11,098
Finished Goods Inventory ........................................... Work in Process—Blending Department ..........
17,244
7,413
3,474
5,692 11,098 17,244
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