ACCOUNTING

Following is a partial process cost summary for Mitchell Manufacturing’s Canning Department.

Equivalent Units of Production Direct Materials   Conversion  
Units Completed and transferred out     56,000         15,000    
Units in Ending Work in Process:                    
Direct Materials (15,000 * 100%)     15,000              
Conversion (15,000 * 70%)               10,500    
Equivalent Units of Production     71,000         66,500    
                     
Cost per Equivalent Unit                    
Costs of beginning work in process   $ 40,800       $ 60,100    
Costs incurred this period     136,900         184,300    
Total costs   $ 177,700       $ 244,400    
Cost per equivalent unit   $ 2.50 per EUP     $ 3.68 per EUP  
 

If the units completed were transferred to the Labeling Department, what is the appropriate journal entry to transfer the direct materials?

· Finished Goods—Labeling $244,400; Finished Goods—Canning $244,400.

· 

Work in Process—Labeling $177,700; Finished Goods—Canning $177,700.

· 

Work in Process—Labeling $177,700; Work in Process—Canning $177,700.

· 

Work in Process—Labeling $140,000; Work in Process—Canning $140,000.

· 

Finished Goods $140,000; Work in Process $140,000.

2

Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department: Units: Beginning Inventory: 46,000 units, 100% complete as to materials and 60% complete as to conversion. Units started and completed: 150,000. Units completed and transferred out: 196,000. Ending Inventory: 40,000 units, 100% complete as to materials and 25% complete as to conversion. Costs: Costs in beginning Work in Process – Direct Materials: $63,000. Costs in beginning Work in Process – Conversion: $68,850. Costs incurred in February – Direct Materials: $420,600. Costs incurred in February – Conversion: $619,150. Calculate the cost per equivalent unit of materials.

· $2.36

· 

$1.99

· 

$1.63

· 

$2.05

· 

$2.63

3

At the beginning of the month, the Forming Department of Martin Manufacturing had 23,000 units in inventory, 40% complete as to materials, and 20% complete as to conversion. During the month the department started 73,000 units and transferred 81,500 units to the next manufacturing department. At the end of the month, the department had 14,500 units in inventory, 80% complete as to materials and 60% complete as to conversion. If Martin Manufacturing uses the weighted average method of process costing, compute the equivalent units for materials and conversion respectively for the Forming Department.

· 83,900 materials; 85,600 conversion.

· 

93,100 materials; 90,200 conversion.

· 

83,900 materials; 90,200 conversion.

· 

70,100 materials; 67,200 conversion.

· 

68,400 materials; 77,600 conversion.

4

During March, the production department of a process operations system completed and transferred to finished goods 17,000 units that were in process at the beginning of March and 130,000 that were started and completed in March. March’s beginning inventory units were 100% complete with respect to materials and 57% complete with respect to conversion. At the end of March, 32,000 additional units were in process in the production department and were 100% complete with respect to materials and 26% complete with respect to conversion. Compute the number of equivalent units with respect to both materials and conversion respectively for March using the FIFO method.

· 179,000 materials; 179,000 conversion.

· 

179,000 materials; 155,320 conversion.

· 

147,000 materials; 138,320 conversion.

· 

155,320 materials; 155,320 conversion.

· 

162,000 materials; 145,630 conversion.

5

A production department’s output for the most recent month consisted of 9,900 units completed and transferred to the next stage of production and 6,900 units in ending Work in Process inventory. The units in ending Work in Process inventory were 50% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method.

· 6,450 units.

· 

11,850 units.

· 

16,800 units.

· 

8,400 units.

· 

13,350 units.

6

At the beginning of the month, the Painting Department of Skye Manufacturing had 26,000 units in inventory, 70% complete as to materials, and 25% complete as to conversion. The cost of the beginning inventory, $34,650, consisted of $28,400 of material costs and $6,250 of conversion costs. During the month the department started 121,000 units and transferred 129,000 units to the next manufacturing department. Costs added in the current month consisted of $264,640 of materials costs and $517,130 of conversion costs. At the end of the month, the department had 18,000 units in inventory, 40% complete as to materials and 10% complete as to conversion. If Skye Manufacturing uses the weighted average method of process costing, compute the costs per equivalent unit of materials and conversion respectively for the Painting Department.

· $2.21; $3.95.

· 

$2.48; $4.21.

· 

$1.91; $3.95.

· 

$2.21; $4.10.

· 

$2.15; $4.00.

7.

Wilturner Company incurs $77,000 of labor related directly to the product in the Assembly Department, $26,000 of labor not directly related to the product but related to the Assembly Department as a whole, and $13,000 of labor for services that help production in both the Assembly and Finishing departments. The journal entries to record the labor would include:

· Debit Work in Process Inventory $103,000; debit Factory Overhead $13,000.

· 

Debit Work in Process Inventory $116,000.

· 

Debit Work in Process Inventory $103,000; debit Wages Expense $13,000.

· 

Debit Work in Process Inventory $77,000; debit Factory Overhead $39,000.

· 

Debit Work in Process Inventory $77,000; debit Wages Expense $39,000.

8

A company’s beginning Work in Process inventory consisted of 30,000 units that were 20% complete with respect to direct labor. These beginning units were completed and another 106,000 units were started during the current period. Of those started, 70,000 were finished and the remaining 36,000 were 40% complete at the end of the period. Using the weighted-average method, the equivalent units of production with regard to direct labor were:

· 118,000.

· 

70,000.

· 

114,400.

· 

94,000.

· 

88,000.

9

At the beginning of the recent period, there were 960 units of product in a department, 35% completed. These units were finished and an additional 5,200 units were started and completed during the period. 880 units were still in process at the end of the period, 25% completed. Using the weighted average method, the equivalent units produced by the department were:

· 5,740 units.

· 

6,160 units.

· 

5,200 units.

· 

7,040 units.

· 

6,380 units.

10

Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department:   Units: Beginning Inventory: 46,000 units, 100% complete as to materials and 60% complete as to conversion. Units started and completed: 150,000. Units completed and transferred out: 196,000. Ending Inventory: 40,000 units, 100% complete as to materials and 25% complete as to conversion. Costs: Costs in beginning Work in Process – Direct Materials: $63,000. Costs in beginning Work in Process – Conversion: $68,850. Costs incurred in February – Direct Materials: $307,000. Costs incurred in February – Conversion: $619,150. Calculate the equivalent units of materials.

· 150,000

· 

236,000

· 

206,000

· 

110,000

· 

154,800

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