Chapter06 Solutions-Hansen6e

3 assembly department a physical flow schedule units

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3. Assembly Department a. Physical flow schedule: Units, beginning work in process ................... 8,000 Units started in February (transferred in) ....... 30,000 Total units to account for ................................ 38,000 Units completed and transferred out: Started and completed ................................ 27,000 From beginning work in process ............... 8,000 Units, ending work in process ......................... 3,000 Total units accounted for ................................. 38,000 b. Equivalent units calculation: Direct Conversion Transferred Materials Costs In Units completed .......................... 35,000 35,000 35,000 Add: Equivalent units in ending work in process .................. 0 1,500 3,000 Total equivalent units ................. 35,000 36,500 38,000 c. Unit cost calculation: Costs charged to the department: Direct Conversion Transferred Materials Costs In Total Costs in beginning work in process ................... $ 0 $ 16,800 $ 45,200 $ 62,000 Costs added ..................... 39,550 136,500 170,571 346,621 Total costs ....................... $ 39,550 $ 153,300 $ 215,771 $ 408,621 Unit cost = Unit direct materials cost + Unit conversion costs + Unit transferred-in cost = $39,550/35,000 + $153,300/36,500 + $215,771/38,000 = $1.13 + $4.20 + $5.6782* = $11.0082 118
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*Rounded. 6–21 Concluded d. and e. Total costs accounted for: Units transferred out (35,000 × $11.0082) .... $385,287 Costs in ending work in process: Direct materials ....................................... $ 0 Conversion costs (1,500 × $4.20) ........... 6,300 Transferred in (3,000 × $5.6782) ............. 17,035 * Total costs in ending work in process ......... 23,335 Total costs accounted for ............................. $408,622 * *Rounded. Costs to account for: Beginning work in process ........................... $ 62,000 Costs incurred ............................................... 346,621 Total costs to account for ............................. $408,621 * *Difference due to rounding. Journal entries: Work in Process—Assembly .......... 39,550 Materials Inventory .................... 39,550 Work in Process—Assembly ......... 136,500 Conversion Costs—Control ..... 136,500* Finished Goods ............................... 385,287 Work in Process—Assembly .... 385,287 *Conversion costs are not broken into direct labor and overhead compon- ents. Thus, a controlling account for conversion costs is used. This re- flects the practice of some firms, which are now combining overhead and direct labor costs into one category (often because direct labor is a small percentage of total manufacturing costs). 119
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6–22 1. Molding Department a. Physical flow schedule: Units, beginning work in process ......................... 10,000 Units started in February ....................................... 25,000 Total units to account for ...................................... 35,000 Units completed and transferred out: Started and completed ..................................... 20,000 From beginning work in process ..................... 10,000 Units, ending work in process .............................. 5,000 Total units accounted for ...................................... 35,000 b. Equivalent units calculation: Direct Conversion Materials Costs Units started and completed ................................. 20,000 20,000 Equivalent units in beginning work in process... 6,000 Equivalent units in ending work in process ........ 5,000 4,000 Total equivalent units ............................................ 25,000 30,000 c. Unit cost computation: Direct Conversion Materials Costs Total Costs added by department ............... 56,250 103,500 159,750 Unit cost = Unit direct materials costs + Unit conversion costs = $56,250/25,000 + $103,500/30,000 = $2.25 + $3.45 = $5.70 120
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6–22 Continued d. and e. Total costs accounted for: Cost of units started and completed (20,000 × $5.70) $114,000 Cost of units in beginning work in process: Prior-period cost .............................................. 35,800 Current cost to finish units (6,000 × $3.45) ..... 20,700 Total cost of units transferred out ....................... $170,500 Costs in ending work in process: Direct materials (5,000 × $2.25) ....................... $11,250 Conversion costs (4,000 × $3.45) .................... 13,800 Total costs in ending work in process ............ 25,050 Total costs accounted for ..................................... $ 195,550 Costs to account for: Beginning work in process ................................... $ 35,800 Costs incurred ....................................................... 159,750 Total costs to account for ..................................... $ 195,550 2. Work in Process—Molding ...................... 56,250 Materials Inventory .............................. 56,250 Work in Process—Molding ...................... 103,500 Conversion Costs—Control ............... 103,500* Work in Process—Assembly ................... 170,500
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