Tutorial Ch 17 - 17-30(25 min Weighted-average method 1 Since direct materials are added at the beginning of the assembly process the units in this

Tutorial Ch 17 - 17-30(25 min Weighted-average method 1...

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17-30 (25 min.) Weighted-average method. 1. Since direct materials are added at the beginning of the assembly process, the units in this department must be 100% complete with respect to direct materials. Solution Exhibit 17-30A shows equivalent units of work done to date: Direct materials 100 equivalent units Conversion costs 97 equivalent units 2. & 3. Solution Exhibit 17-30B calculates cost per equivalent unit of work done to date , summarizes the total Assembly Department costs for October 2007, and assigns these costs to units completed (and transferred out) and to units in ending work in process using the weighted- average method. SOLUTION EXHIBIT 17-30A Steps 1 and 2: Summarize Output in Physical Units and Compute Output in Equivalent Units; Weighted-Average Method of Process Costing, Assembly Department of Global Defense, Inc., for October 2007. (Step 1) (Step 2) Equivalent Units Physical Direct Conversion Flow of Production Units Materials Costs Work in process, beginning (given) 20 Started during current period (given) 80 To account for 100 Completed and transferred out during current period 90 90 90 Work in process, ending * (given) 10 10 100%; 10 70% 10 7 Accounted for 100 Work done to date 100 97 * Degree of completion in this department: direct materials, 100%; conversion costs, 70%.
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SOLUTION EXHIBIT 17-30B Steps 3, 4, and 5: Compute Cost per Equivalent Unit, Summarize Total Costs to Account For, and Assign Total Costs to Units Completed and to Units in Ending Work in Process; Weighted-Average Method of Process Costing, Assembly Department of Global Defense, Inc., for October 2007. Total Production Costs Direct Materials Conversion Costs (Step 3 ) Work in process, beginning (given) $ 580,000 $ 460,000 $ 120,000 Costs added in current period (given) 2,935,000 2,000,000 935,000 Costs incurred to date $2,460,000 $1,055,000 Divide by equivalent units of work done to date (Solution Exhibit 17-30A) 100 97 Cost per equivalent unit of work done to date $ 24,600 $10,876 .29 ( Step 4 ) Total costs to account for $3,515,000 ( Step 5 ) Assignment of costs: Completed and transferred out (90 units) $3,192,866 (90* $24,600) + (90 * $10,876.29) Work in process, ending (10 units) 322,134 (10 $24,600) + (7 $10,876.29) Total costs accounted for $3,515,000 * Equivalent units completed and transferred out from Solution Exhibit 17-30A, Step 2. Equivalent units in work in process, ending from Solution Exhibit 17-30A, Step 2. 17-31 (10 min.) Journal entries (continuation of 17-30). 1. Work in Process––Assembly Department 2,000,000 Accounts Payable 2,000,000 Direct materials purchased and used in production in October. 2. Work in Process––Assembly Department 935,000 Various accounts 935,000 Conversion costs incurred in October. 3. Work in Process––Testing Department 3,192,866 Work in Process––Assembly Department 3,192,866 Cost of goods completed and transferred out in October from the Assembly Department to the Testing Department. Work in Process––Assembly Department Beginning inventory, October 1 580,000 1. Direct materials 2,000,000 2. Conversion costs 935,000 3. Transferred out to Work in Process–Testing 3,192,866 Ending Inventory, October 31 322,134
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17-32 (20 min.) FIFO method (continuation of 17-30).
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  • Fall '14
  • Zalin
  • Cost Accounting, packaging department, Testing Department, Process––Assembly Department

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