| Book Edition | 4th Edition |
| Author(s) | Hansen, Mowen |
| ISBN | 9781305970663 |
| Publisher | Cengage |
| Subject | Management |
Weighted Average Method, Single Department; Equivalent Units, FIFO Method
Payson Company produces a product that passes through two departments: Mixing and Cooking. Both departments use the weighted average method. In the Mixing Department, all direct materials are added at the beginning of the process. All other manufacturing inputs are added
uniformly. Payson uses the weighted average method. The following information pertains to the
Mixing Department for February:
a. Beginning work in process (BWIP), February 1: 100,000 pounds, 100 percent complete with respect to direct materials and 40 percent complete with respect to conversion costs. The costs assigned to this work are as follows:
| Direct materials | $20,000 |
| Direct labor | 10,000 |
| Overhead | 30,000 |
b. Ending work in process (EWIP), February 28: 50,000 pounds, 100 percent complete with respect to direct materials and 60 percent complete with respect to conversion costs.
c. Units completed and transferred out: 370,000 pounds. The following costs were added during the month:
| Direct materials | $211,000 |
| Direct labor | 100,000 |
| Overhead | 270,000 |
Required:
Prepare a physical flow schedule.
Weighted Average Method, Single Department; Equivalent Units, FIFO Method
Payson Company produces a product that passes through two departments: Mixing and Cooking. Both departments use the weighted average method. In the Mixing Department, all direct materials are added at the beginning of the process. All other manufacturing inputs are added
uniformly. Payson uses the weighted average method. The following information pertains to the
Mixing Department for February:
a. Beginning work in process (BWIP), February 1: 100,000 pounds, 100 percent complete with respect to direct materials and 40 percent complete with respect to conversion costs. The costs assigned to this work are as follows:
| Direct materials | $20,000 |
| Direct labor | 10,000 |
| Overhead | 30,000 |
b. Ending work in process (EWIP), February 28: 50,000 pounds, 100 percent complete with respect to direct materials and 60 percent complete with respect to conversion costs.
c. Units completed and transferred out: 370,000 pounds. The following costs were added during the month:
| Direct materials | $211,000 |
| Direct labor | 100,000 |
| Overhead | 270,000 |
Required:
Prepare a schedule of equivalent units.
Weighted Average Method, Single Department; Equivalent Units, FIFO Method
Payson Company produces a product that passes through two departments: Mixing and Cooking. Both departments use the weighted average method. In the Mixing Department, all direct materials are added at the beginning of the process. All other manufacturing inputs are added
uniformly. Payson uses the weighted average method. The following information pertains to the
Mixing Department for February:
a. Beginning work in process (BWIP), February 1: 100,000 pounds, 100 percent complete with respect to direct materials and 40 percent complete with respect to conversion costs. The costs assigned to this work are as follows:
| Direct materials | $20,000 |
| Direct labor | 10,000 |
| Overhead | 30,000 |
b. Ending work in process (EWIP), February 28: 50,000 pounds, 100 percent complete with respect to direct materials and 60 percent complete with respect to conversion costs.
c. Units completed and transferred out: 370,000 pounds. The following costs were added during the month:
| Direct materials | $211,000 |
| Direct labor | 100,000 |
| Overhead | 270,000 |
Required:
Compute the cost per equivalent unit.
Weighted Average Method, Single Department; Equivalent Units, FIFO Method
Payson Company produces a product that passes through two departments: Mixing and Cooking. Both departments use the weighted average method. In the Mixing Department, all direct materials are added at the beginning of the process. All other manufacturing inputs are added
uniformly. Payson uses the weighted average method. The following information pertains to the
Mixing Department for February:
a. Beginning work in process (BWIP), February 1: 100,000 pounds, 100 percent complete with respect to direct materials and 40 percent complete with respect to conversion costs. The costs assigned to this work are as follows:
| Direct materials | $20,000 |
| Direct labor | 10,000 |
| Overhead | 30,000 |
b. Ending work in process (EWIP), February 28: 50,000 pounds, 100 percent complete with respect to direct materials and 60 percent complete with respect to conversion costs.
c. Units completed and transferred out: 370,000 pounds. The following costs were added during the month:
| Direct materials | $211,000 |
| Direct labor | 100,000 |
| Overhead | 270,000 |
Required:
Compute the cost of goods transferred out and the cost of ending work in process.
Weighted Average Method, Single Department; Equivalent Units, FIFO Method
Payson Company produces a product that passes through two departments: Mixing and Cooking. Both departments use the weighted average method. In the Mixing Department, all direct materials are added at the beginning of the process. All other manufacturing inputs are added
uniformly. Payson uses the weighted average method. The following information pertains to the
Mixing Department for February:
a. Beginning work in process (BWIP), February 1: 100,000 pounds, 100 percent complete with respect to direct materials and 40 percent complete with respect to conversion costs. The costs assigned to this work are as follows:
| Direct materials | $20,000 |
| Direct labor | 10,000 |
| Overhead | 30,000 |
b. Ending work in process (EWIP), February 28: 50,000 pounds, 100 percent complete with respect to direct materials and 60 percent complete with respect to conversion costs.
c. Units completed and transferred out: 370,000 pounds. The following costs were added during the month:
| Direct materials | $211,000 |
| Direct labor | 100,000 |
| Overhead | 270,000 |
Required:
Prepare a cost reconciliation.
Weighted Average Method, Single Department; Equivalent Units, FIFO Method
Payson Company produces a product that passes through two departments: Mixing and Cooking. Both departments use the weighted average method. In the Mixing Department, all direct materials are added at the beginning of the process. All other manufacturing inputs are added
uniformly. Payson uses the weighted average method. The following information pertains to the
Mixing Department for February:
a. Beginning work in process (BWIP), February 1: 100,000 pounds, 100 percent complete with respect to direct materials and 40 percent complete with respect to conversion costs. The costs assigned to this work are as follows:
| Direct materials | $20,000 |
| Direct labor | 10,000 |
| Overhead | 30,000 |
b. Ending work in process (EWIP), February 28: 50,000 pounds, 100 percent complete with respect to direct materials and 60 percent complete with respect to conversion costs.
c. Units completed and transferred out: 370,000 pounds. The following costs were added during the month:
| Direct materials | $211,000 |
| Direct labor | 100,000 |
| Overhead | 270,000 |
Required:
Repeat Requirements 2-4 using the FIFO method.
A physical flow schedule identifies and accounts for the units that must be accounted for, despite of their degree of completion. It's the first of five steps in the process costing procedure.
| Unit cost information | |||
| Units to account for: | Units accounted for: | ||
| Beginning goods in process | 100,000 | Completed & transferred out | 370,000 |
| Units started this period | 320,000 | Ending goods in process | 50,000 |
| Total units to account for | 420,000 | Total units accounted for | 420,000 |
| Statement Showing Physical Unit | |
| Beginning WIP inventory | 100,000 |
Units started during May (370,000 + 50,000 - 100,000) | 320,000 |
| Ending inventory | 50,000 |
| Units completed and transferred | 370,000 |
| Statement Showing Computation of Equivalent Unit - Weighted Average | |||
| Particular | Whole Units | Materials | Conversion |
| Beginning WIP inventory | 100,000 | 100,000 | 100,000 |
Started and Completed (370,000 - 100,000) | 270,000 | 270,000 | 270,000 |
| Ending inventory | 50,000 | 50,000 | 50,000 |
| Units accounted for | 420,000 | 420,000 | 420,000 |
| Equivalent Unit of Production | ||
| Materials | Conversion | |
| Equivalent units of production | 420,000 | 400,000 |
| Statement showing Cost per Equivalent Unit | |||
| Particular | Total | Material | Conversion |
| Beginning WIP inventory | $60,000 | $20,000 | $40,000 |
| Current costs incurred | $581,000 | $211,000 | $370,000 |
| Total cost to account for (a) | $641,000 | $231,000 | $410,000 |
| Equivalent units (b) | 420,000 | 400,000 | |
| Cost per equivalent unit (a/b) | $0.55 | $1.0250 | |
| Computation of ending WIP | |
| Material (50,000 * 0.55) | $27,500.00 |
| Conversion (30,000 * 1.03) | $30,750.00 |
| Total Ending WIP | $58,250.00 |
| Computation of Cost of units completed and transfered | |
| Material (370,000 * 0.55) | $203,500.00 |
| Conversion (370,000 * 1.03) | $379,250.00 |
| Total Ending WIP | $582,750.00 |
Incase of any question, feel free to ask in the comments and I will get back to you as soon as possible.
| Cost Reconciliation | |
| Beginning WIP Inventory | $60,000.00 |
| Current costs incurred | $581,000.00 |
| Total costs to be accounted for | $641,000 |
| Cost accounted for as follows | |
| Cost of units completed and transferred | $582,750.00 |
| Cost of ending work in process | $58,250.00 |
| Total costs accounted for | $641,000 |
| Part-1 Statement Showing Physical Unit | |||
| Beginning WIP inventory | 100000 | ||
| Units started during May (370000+50000-100000) | 320000 | ||
| Ending inventory | 50000 | ||
| Units completed and transferred | 370000 | ||
| Part-2 Statement showing Computation of Equivalent Unit- Weighted Average | |||
| Particular | Whole units | Materials | Conversion |
| Beginning WIP inventory | 100000 | 100000 | 100000 |
| Started & completed (370000-100000) | 270000 | 270000 | 270000 |
| Ending inventory | 50000 | 50000 | 30000 |
| Units accounted for | 420000 | 420000 | 400000 |
| Equivalent Unit of Production | |||
| Materials | Conversion | ||
| Equivalent units of production | 420000 | 400000 | |
| Part-3: Statement showing Cost per Equivalent Unit | |||
| Particular | Tototal | Material | Conversion |
| Beginning WIP inventory | $60,000.00 | $20,000.00 | $40,000.00 |
| Current costs incurred | $581,000.00 | $211,000.00 | $370,000.00 |
| Tototal cost to account for (a) | $641,000.00 | $231,000.00 | $410,000.00 |
| Equivalent units (b) | 420000 | 400000 | |
| Cost per Equivalent unit (a/b) | $0.55 | $1.0250 | |
| Part-4 (a)Computation of Ending WIP | |||
| Material (50000*0.55) | $27,500.00 | ||
| Conversion (30000*1.03) | $30,750.00 | ||
| Tototal Ending Work in process | $58,250.00 | ||
| Part-4(b)Computation of Cost of units completed and transferred | |||
| Material (370000*0.55) | $203,500.00 | ||
| Conversion (370000*1.03) | $379,250.00 | ||
| Tototal | $582,750.00 | ||
| Part-5 Cost Reconciliation | |||
| Beginning WIP inventory | $60,000.00 | ||
| Current costs incurred | $581,000.00 | ||
| Tototal costs to be accounted for | $641,000.00 | ||
| Cost accounted for as follws: | |||
| Cost of units completed and transferred | $582,750.00 | ||
| Cost of ending work in process | $58,250.00 | ||
| Tototal costs accounted for | $641,000.00 | ||
If you need any clarification, then feel free to ask in the comments section.
Answer:
MIXING DEPT. A/C
| Pounds | Amount | Pounds | Amount | ||
| To Beginning Wip | 100,000 | 60,000 | By Output | 370,000 | 582,750* |
| To D.M. | 320,000 (bal) | 211,000 | By Ending Wip | 50,000 | 58,250* |
| To D.Labor | - | 100,000 | |||
| To Overheads | - | 270,000 | |||
| 420,000 | 641,000 | 420,000 | 641,000 |
Statement of Equivalent units (W. Avg)
| Particulars | Units | D.M. | D.Labor & OH |
| Output | 370,000 | 370,000 (100%) | 370,000 (100%) |
| Ending WIP | 50,000 | 50,000 (100%) | 30,000 (60%) |
| Units (A) | 420,000 | 400,000 | |
| Cost :- | |||
| Beginning Wip | 20,000 | 40,000 | |
| Current month | 211,000 | 370,000 | |
| Total cost (B) | 231,000 | 410,000 | |
| Cost per unit (B/A) | $ 0.55 | $ 1.025 |
Assignment of Cost:
1. Output transferred
D.material = 370,000 x $0.55 = $203,500
Labor & OH = 370,000 x $1.025 = $379,250
Total value = $582,750 *
2. Ending WIP
D.material = 50,000 x $ 0.55 = $ 27,500
Labor & OH = 30,000 x $ 1.025 = $ 30,750
Total value = $ 58,250 *
