Chapter06 Solutions-Hansen6e

Work in processmolding 170500 since direct labor and

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Work in Process—Molding ................ 170,500 *Since direct labor and overhead are not given separately, a control account for conversion costs is used. More firms are using a combined control ac- count like this because labor has become a small percentage of total manu- facturing costs (for these firms). 121
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6–22 Continued 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 started and completed ......... 27,000 27,000 27,000 Equivalent units in beginning work in process ........................ 8,000 4,000 0 Equivalent units in ending work in process ........................ 0 1,500 3,000 Total equivalent units .................... 35,000 32,500 30,000 c. Unit cost calculation: Costs charged to the department: Direct Conversion Transferred Materials Costs In Total Costs added .................. 39,550 136,500 170,500 346,550 Unit cost = Unit direct materials cost + Unit conversion costs + Unit transferred-in cost = $39,550/35,000 + $136,500/32,500 + $170,500/30,000 = $1.13 + $4.20 + $5.6833* = $11.0133 *Rounded. 122
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6–22 Concluded d. and e. Total costs accounted for: Cost of units started and completed (27,000 × $11.0133) $ 297,359* Cost of units in beginning work in process: Prior-period costs ........................................... 62,000 Current cost to finish units: Direct materials (8,000 × $1.13) ................. 9,040 Conversion costs (4,000 × $4.20) ............. 16,800 Total costs of goods transferred out ................. $385,199 Costs in ending work in process: Conversion (1,500 × $4.20) ............................. $ 6,300 Transferred in (3,000 × $5.6833) ..................... 17,050 * Total costs in ending work in process .............. 23,350 Total costs accounted for .................................. $ 408,549 *Rounded. Costs to account for: Beginning work in process ................................. $ 62,000 Costs incurred ..................................................... 346,550 Total costs to account for .................................. $ 408,550 * *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 ................................... 385,199 Work in Process—Assembly ......... 385,199 *Since direct labor and overhead are not given separately, a control ac- count for conversion costs is used. More firms are using a combined control account like this because direct labor has become a small per- centage of total manufacturing costs (for these firms). 123
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6–23 1. Healthway Mixing Department Production Report for July 20XX Unit Information Units to account for: Units, beginning work in process .............. 5 Units started ................................................ 126 Total units to account for ........................... 131 Units accounted for: Equivalent Units Physical Direct Conversion Flow Materials Costs Units completed .................................. 125 125 125 Units, ending work in process ............ 6 6 3 Total units accounted for ................... 131 131 128 Cost Information Costs to account for: Direct Conversion Materials Costs Total Costs in beginning work in process. . $ 120 $ 384 $ 504 Costs added by department ............... 3,144 12,288 15,432 Total costs to account for .................. $ 3,264 $ 12,672 $ 15,936 Cost per equivalent unit ........................... $ 24.916* $ 99.00 $ 123.916 Costs accounted for: Transferred Ending Work Out in Process Total Goods transferred out (125 × $123.916) .............................. $15,490* $ 15,490* Ending work in process: Direct materials (6 × $24.916) ........ $149* 149* Conversion costs (3 × $99.00) ....... 297 297 Total costs accounted for ................... $ 15,490 $ 446 $ 15,936 *Rounded.
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