Solutions to Some Process Cost Problems - Exercise 16-22...

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Exercise 16-22HI-TEST COMPANYProcess Cost Summary (Weighted-Average Method)For Month Ended September 30Costs Charged to ProductionCosts of beginning work in processDirect materials.....................................................................$ 45,000Direct labor............................................................................25,600Factory overhead..................................................................30,720$101,320Costs incurred this periodDirect materials.....................................................................375,000Direct labor............................................................................155,000Factory overhead ($155,000 x 120%)......................................(a) 186,000(b) 716,000Total costs to account for..........................................................(c)$817,320Unit Cost InformationUnits to Account ForUnits Accounted ForBeginning goods in process...................2,000Completed & transferred out.......................................................................................23,000Units started this period.........................28,000Ending goods in process.............................................(d) 7,000Total units to account for........................(e)30,000Total units accounted for..............................................(f) 30,000Equivalent Units of Production (EUP)DirectMaterialsDirectLaborFactoryOverheadUnits completed and transferred out.................(g)23,000EUP(h)23,000EUP(i)23,000EUPUnits of ending goods in process......................Direct materials [(j)7,000 x 100%]......................(k) 7,000EUPDirect labor [(l)7,000 x 40%]..............................(m)2,800EUPFactory overhead [(n)7,000 x 40%]....................... . (o) 2,800EUPEquivalent units of production...............................(p)30,000EUP(q)25,800EUP(r)25,800EUPCost per EUPDirectMaterialsDirectLaborFactoryOverheadCosts of beginning goods in process.......$ 45,000$ 25,600$ 30,720Costs incurred this period.........................375,000155,000(s) 186,000Total costs...................................................$420,000$180,600(t) $216,720
÷ EUP...........................................................(u) 30,000(v) 25,800(w) 25,800Costper equivalent unit of production.......(x)$14.00 perEUP(y) $7.00 per EUP(z) $8.40 per EUP[Continued on next page]
Exercise 16-22 (concluded)Cost Assignment and ReconciliationCosts transferred outDirect materials [(aa)$14.00 x (bb)23,000]........................(cc)$322,000Direct labor [(dd)$ 7.00 x (ee)23,000]................................(ff) 161,000Factory overhead [(gg)$ 8.40 x (hh)23,000]......................(ii) 193,200Total transferred out.......................................................

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