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Chapter 18: Q11SE (page 1008)

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

Short Answer

Expert verified

The number of units still in process at the end of the month is 300 units, the equivalent unit of production for direct material is 1,800 units, and the conversion cost is 1,680 units.

Step by step solution

01

Step-by-Step Solution:Step 1: Work in Process Inventory

Work in process inventory means the inventory which is partially completed through the manufacturing process at the end of the period. It is shown as a current asset on the balance sheet.

02

The number of units still in process at the end of the month

Workinprocessinventory=BeginningWIP+Receivedfromfinishingdepartment-Transferredtofinishedgoods=600+1,200-1,500=300

03

Equivalent unit of production (EUP) for direct material

Particulars

Units

Completion %

EUP

Transferred units

1,500

100%

1,500

In process units

300

100%

300


Total equivalent unit of production for direct material
1,800
04

Equivalent unit of production for conversion cost

Particulars

Units

Completion %

EUP

Transferred units

1,500

100%

1,500

In process units

300

60%

180

Total equivalent unit of production for conversion cost


1,680


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Most popular questions from this chapter

What are transferred in costs? When do they occur?

Question: Castillo Company has three departments: Mixing, Bottling, and Packaging. At the end of the month, the production cost reports for the departments show the costs of the products completed and transferred were \(75,000 from Mixing to Bottling, \)50,000 from Bottling to Packaging, and $65,000 from Packaging to Finished Goods Inventory. Prepare the journal entries for the transfer of the costs.

Question: The Jimenez Toy Company makes wooden toys. The company uses a process costing system. Arrange the company’s accounts in the order the production costs are most likely to flow, using 1 for the first account, 2 for the second, and so on.

Order

Account

Work-in-process inventory – Packaging

Cost of goods sold

Work-in-process inventory – Cutting

Work-in-process inventory – Finishing

Finished goods inventory

Question: Cadwell manufactures cell phones. The conversion costs to produce cell phones for November are added evenly throughout the process in the Assembly Department. The company uses the weighted-average method. For each of the following separate assumptions, calculate the equivalent units of production for conversion costs in the ending Work-in-Process Inventory for the Assembly Department:

1. 12,000 cell phones were 60% complete

2. 21,000 cell phones were 40% complete

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

a. Soft drinks

b. Automobile repairs

c. Customized furniture

d. Aluminum foil

e. Lawn chairs

f. Chocolate candy bars

g. Hospital surgery

h. Pencils
See all solutions

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