ACC560 E3-2 E3-3 E3-5 E3-6 E3-13 P3-1A P3-6A
SOLUTION BY CHARTERED ACCOUNTANT
E3-2 Harrelson Company manufactures pizza sauce through two production
departments:
Cooking and Canning. In each process, materials and
conversion costs are incurred
evenly throughout the process. For the month of
April, the work in process accounts show
the following debits.
Cooking
Canning
Beginning work in process $ –0– $ 4,000
Materials 21,000
9,000
Labor 8,500 7,000
Overhead 31,500 25,800
Costs transferred in
53,000
Instructions
Journalize the April transactions.E3-3 The ledger of Custer Company has the following work in process
account.
Work in Process—Painting
5/1 Balance 3,590 5/31 Transferred out
?
5/31 Materials 5,160
5/31 Labor 2,740
5/31 Overhead 1,380
5/31
Balance ?
Production records show that there were 400 units in the beginning
inventory, 30%
complete, 1,400 units started, and 1,500 units transferred out. The beginning work
in process had materials cost of $2,040 and
conversion costs of $1,550. The units in
ending inventory were 40% complete.
Materials are entered at the beginning of the
painting
process.
Instructions
(a) How many units are in process at May
31?
(b) What is the unit materials cost for May?
(c) What is the unit
conversion cost for May?
(d) What is the total cost of units transferred out
in May?
(e) What is the cost of the May 31 inventory?
In Wayne Company, materials are entered at the beginning of each process. Work in process inventories, with the percentage of work done on conversion costs, and production data for its Sterilizing Department in selected months during 2012 are as follows.
Instructions
(a) Compute the physical units for January and May.
(b) Compute the equivalent units of production for
(1) Materials and
(2) Conversion costs for eachmonth.
E3-6 The Cutting Department of Cassel Company has the following production
and cost
data for July.
Production Costs
1. Transferred out 12,000
units. Beginning work in process $ –0–
2. Started 3,000 units that are 60%
Materials 45,000
complete as to conversion Labor 16,200
costs and 100%
complete as Manufacturing overhead 18,300
to materials at July
31.
Materials are entered at the beginning of the process. Conversion costs
are incurred uniformly
during the process.
Instructions
(a) Determine
the equivalent units of production for (1) materials and (2) conversion
costs.
(b) Compute unit costs and prepare a cost reconciliation schedule.
The Welding Department of Thorpe Company has the following production and manufacturing cost data for February 2014. All materials are added at the beginning of the process.
Instructions
Prepare a production cost report for the Welding Department for the month ofFebruary.
P3-1A Conwell Company manufactures its product, Vitadrink, through two
manufacturing
processes: Mixing and Packaging. All materials are entered
at the beginning of each
process. On October 1, 2014, inventories consisted
of Raw Materials $26,000, Work in
Process—Mixing $0, Work in
Process—Packaging $250,000, and Finished Goods $289,000.
The beginning
inventory for Packaging consisted of 10,000 units that were 50% complete
as
to conversion costs and fully complete as to materials. During October, 50,000
units
were started into production in the Mixing Department and the following
transactions
were completed.
1. Purchased $300,000 of raw materials on
account.
2. Issued raw materials for production: Mixing $210,000 and
Packaging $45,000.
3. Incurred labor costs of $258,900.
4. Used
factory labor: Mixing $182,500 and Packaging $76,400.
5. Incurred $810,000 of
manufacturing overhead on account.
6. Applied manufacturing overhead on the
basis of $24 per machine hour. Machine hours
were 28,000 in Mixing and 6,000
in Packaging.
7. Transferred 45,000 units from Mixing to Packaging at a cost
of $979,000.
8. Transferred 53,000 units from Packaging to Finished Goods at
a cost of $1,315,000.
9. Sold goods costing $1,604,000 for $2,500,000 on
account.
Instructions
Journalize the October transactions.
Hamilton Processing Company uses a weighted-average process costing system and manufactures a single product—a premium rug shampoo and cleaner. The manufacturing activity for the month of October has just been completed. A partially completed production cost report for the month of October for the mixing and cooking department is shown below.
Instructions
(a) Prepare a schedule that shows how the equivalent units were computed so that you can complete the “Quantities: Units accounted for” equivalent units section shown in the production cost report, and compute October unit costs.
(b) Complete the “Cost Reconciliation Schedule” part of the production cost reportbelow.
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