10 minutes a hybrid costing system contains features

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Cornerstones of Cost Management
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Chapter 9 / Exercise 9.21
Cornerstones of Cost Management
Hansen/Mowen
Expert Verified
Exercise 16-19 (10 minutes) A hybrid costing system contains features of both process costing and job order costing. A hybrid system of processes requires a hybrid costing system to properly cost products or services. Products or services that might well fit a hybrid costing system would be those that resemble process operations but that also include varying degrees of customization. Product examples: cars with custom add-ons; shirts with custom names on back; high-end courier services; inoculation programs; and so forth. Exercise 16-20 (20 minutes) 1. Beginning inventory is 100% complete with respect to materials. Ending inventory is 100% complete with respect to materials. EUP for Materials Goods completed (191,500 EUP x 100%) ................................ 191,500 Ending goods in process * (29,500 EUP x 100%) ..................... 29,500 Total EUP .................................................................................. 221,000 2. Beginning inventory is 50% complete with respect to materials. Ending inventory is 50% complete with respect to materials. Units of EUP for Materials Product Goods completed (191,500 EUP x 100%) ................................ 191,500 Ending goods in process (29,500 * EUP x 50%) ....................... 14,750 Total EUP .................................................................................. 206,250 *Ending goods in process = Beginning goods in process + Goods started – Goods completed. = 31,500 + 189,500 - 191,500 = 29,500 Solutions Manual, Chapter 16 131
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Cornerstones of Cost Management
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Chapter 9 / Exercise 9.21
Cornerstones of Cost Management
Hansen/Mowen
Expert Verified
Exercise 16-21 (20 minutes) 1. Beginning inventory is 100% complete with respect to materials. Ending inventory is 100% complete with respect to materials. EUP for Materials To complete beginning work in process (31,500 EUP x 0%). . 0 Units started and completed* (160,000 EUP x 100%) .............. 160,000 Ending goods in process ** (29,500 EUP x 100%) ..................... 29,500 Total EUP ................................................................................... 189,500 2. Beginning inventory is 50% complete with respect to materials. Ending inventory is 50% complete with respect to materials. Units of EUP for Materials Product To complete beginning work in process (31,500 EUP x 50%) 15,750 Units started and completed* (160,000 EUP x 100%) .............. 160,000 Ending goods in process ** (29,500 EUP x 50%) ....................... 14,750 Total EUP ................................................................................... 190,500 *Units started and completed = Units completed – Beginning goods in process = 191,500 – 31,500 = 160,000 ** Ending goods in process = Beginning goods in process + Goods started – Goods completed = 31,500 + 189,500 - 191,500 = 29,500 Financial & Managerial Accounting, 5th Edition 132
Exercise 16-22 (30 minutes) HI-TEST COMPANY Process Cost Summary (Weighted-Average Method) For Month Ended September 30 Costs Charged to Production Costs of beginning work in process Direct materials ..................................................................... $ 45,000 Direct labor ............................................................................ 25,600 Factory overhead .................................................................. 30,720 $101,320 Costs incurred this period Direct materials ..................................................................... 375,000 Direct labor ............................................................................ 155,000 Factory overhead ($155,000 x 120%) ...................................... (a) 186,000 (b) 716,000 Total costs to account for .......................................................... (c)$817,320 Unit Cost Information Units to Account For Units Accounted For Beginning goods in process 2,000 C ompleted & transferred out 23,000 Units started this period ...... 28,000 Ending goods in process ..... (d) 7,000 Total units to account for ... (e)30,000 Total units accounted for .... (f) 30,000 Equivalent Units of Production (EUP) Direct Materials Direct Labor Factory Overhead Units completed and transferred out ................. (g)23,000EUP (h)23,000EUP (i)23,000EUP Units of ending goods in process ...................... Direct materials [(j)7,000 x 100%] ...................... (k) 7,000EUP Direct labor [(l)7,000 x 40%] .............................. (m) 2,800EUP F actory overhead [ (n)7,000 x 40%] ...................... . . (o) 2,800EUP Equivalent units of production ............................... (p)30,000EUP (q)25,800EUP (r)25,800EUP Cost per EUP Direct Material s Direct Labor Factory Overhead Costs of beginning goods in process ....... $ 45,000 $ 25,600 $ 30,720 Costs incurred this period ......................... 375,000 155,000 (s) 186,000 Total costs .................................................. $420,000 $180,600 (t) $216,720 ÷ EUP ........................................................... (u) 30,000 (v) 25,800 (w) 25,800 Cost

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