# Chapter 3 PROBLEM SET A.docx - Chapter 3 PROBLEM SET A...

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Chapter 3 PROBLEM SET AMaria Edvenna YoungProblem 3-2A1.DirectDirectEquivalent units of productionMaterialsLaborUnits completed & transferred out.......................700,000700,000Units of ending goods in process.........................Direct materials (180,000 x 100%)...................180,000Direct labor (180,000 x 30%)............................______54,000Equivalent units of production..............................880,000754,0002.Cost per equivalent unit of productionDirectMaterialsDirect LaborCosts of beginning goods in process................\$ 420,000\$ 139,000Costs incurred this period..................................2,220,0003,254,000Total costs............................................................\$2,640,000\$3,393,000÷ Equivalent units of production........................880,000 EUP754,000 EUPCost per equivalent unit of production..............\$3.00 per EUP\$4.50 per EUP3. Assigning product costs to unitsCosts transferred outDirect materials (700,000 EUPx\$3.00 per EUP).........\$2,100,000Direct labor (700,000 EUP x \$4.50 per EUP)..............3,150,000Total costs transferred out..........................................\$5,250,000Cost of ending goods in processDirect materials(180,000 EUP x \$3.00 per EUP)........540,000Direct labor (54,000 EUP x \$4.50 per EUP)................243,000Total costs of ending goods in process....................783,000Total costs accounted for*............................................\$6,033,000*This equals the sum of the total direct materials cost and thetotal direct labor costs (\$2,640,000 + \$3,393,000 = \$6,033,000).4.MEMORANDUMTo: Plant Manager
From: AccountingSubject: Percentage of Completion Error AnalysisIf an error were made in determining the percentage of completion for the units in endinginventory with respect to labor, then the cost per equivalent unit of production and cost ofdirect labor for transferred units are overstated and total cost of ending goods in processfor direct labor and overall cost ending inventory are understated.Problem 3-3A a.Mar 31 Raw Materials Inventory................................................250,000Accounts Payable...................................................250,000Raw materials purchased.b.Mar 31Goods in Process Inventory..........................................168,000Raw Materials Inventory..........................................168,000Direct materials used in production.c.

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