Session 08 Solutions

Session 08 Solutions - Case 3: Process costing with...

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Case 3: Process costing with beginning and ending WIP Direct materials are added at the beginning of the process in Green Dept., which has both beginning and ending inventory. The following information is available for the period: Green Dept. : Beg. WIP (2,000 units): Direct Materials $ 6,000 Conversion Costs $ 5,000 (75% complete) $ 11,000 Current period costs: Materials costs $ 60,000 Conversion costs $ 42,500 Units completed (and transferred out) - 8,000 End. WIP - 4,000 units (50% complete with respect to Conversion costs) What are the costs of Ending WIP and Units Completed in Green Dept. using the FIFO and the Weighted Average cost flow assumptions?
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EI ? (4,000 units) ? Cost of units completed (8,000 units) Cost incurred during period 42,500 BI 5,000 (2,000 units) Conversion Costs EI ? (4,000 units) ? Cost of units completed (8,000 units) Cost incurred during period 60,000 BI 6,000 (2,000 units) Direct (Raw) Materials Work-in-Process Inventory – Green Dept. The product cost information for Green Dept. is recorded in the accounts as: And, the task is to determine the amount of direct materials costs and of conversion costs to assign to the units completed (and to the unfinished units remaining).
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6,000 Started 10,000 EI 4,000 8,000 Completed 2,000 BI 2,000 Physical Flow Summarize the physical flow. FIFO
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Session 08 Solutions - Case 3: Process costing with...

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