"I think we goofed when we hired that new assistant controller," said Ruth Scarpino, president of Provost Industries. "Just look at thisreport that he prepared for last month for the Finishing Department. I can't understand it."Finishing Department costs:Work in process inventory, April 1, 450 units; materials100% complete; conversion 60% completeCosts transferred in during the month from the precedingdepartment, 1,950 unitsMaterials cost added during the monthConversion costs incurred during the monthTotal departmental costsFinishing Department costs assigned to:Units completed and transferred to finished goods, 1,800units at $25.71 per unitWork in process inventory, April 30, 600 units; materials 0%complete; conversion 35% completeTotal departmental costs assigned$ 8,208*17,9406,21013,920$ 46,278$ 46,2780$ 46,278*Consists of cost transferred in, $4,068; materials cost, $1,980; and conversion cost, $2,160."He's struggling to learn our system," replied Frank Harrop, the operations manager. "The problem is that he's been away from processcosting for a long time, and it's coming back slowly.""It's not just the format of his report that I'm concerned about. Look at that $25.71 unit cost that he's come up with for April. Doesn't thatseem high to you?" said Ms. Scarpino."Yes, it does seem high; but on the other hand, I know we had an increase in materials prices during April, and that may be theexplanation," replied Mr. Harrop. "I'll get someone else to redo this report and then we can see what's going on."Provost Industries manufactures a ceramic product that goes through two processing departments-Molding and Finishing. Thecompany uses the weighted-average method in its process costing.Required:1-a. Calculate the equivalent units of production.1-b. Calculate the cost per equivalent unit. (Round your answers to 2 decimal places.)1-c. How much cost should have been assigned to the ending work in process inventory? (Round your intermediate calculations to 2decimal places.)1-d. How much cost should have been assigned to the units completed and transferred to finished goods? (Round your intermediatecalculations to 2 decimal places.)TransferredIn CostsMaterialsConversionTotal1-a. Equivalent units of production2,4001,8002,0101-b. Cost per equivalent unit$9.17 $4.55$8.001-c. Cost of ending work in process inventory$5,502$1-d. Cost of units completed and transferred out1,680 $$7,1820

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Description: "I think we goofed when we hired that new assistant controller," said Ruth Scarpino, president of Provost Industries. "Just look at thisreport that he prepared for last month for the Finishing Department. I can't understand it."Finishing Department

Equivalent units of production:An equivalent unit of production is a term used to describe a…

Business

Accounting

100% complete; conversion 60% complete Costs transferred in during the month from the preceding department, 1,950 units Materials cost added during the month Conversion costs incurred during the month $ 8,208* 17,940 6,210 13,920 $ 46,278 Total departmental costs inishing Department costs assigned to: Units completed and transferred to finished goods, 1,800 units at $25.71 per unit $ 46,278 Work in process inventory, April 30, 600 units; materials 0% complete; conversion 35% complete 0 Total departmental costs assigned $ 46,278 nsists of cost transferred in, $4,068; materials cost, $1,980; and conversion cost, $2,160.

100% complete; conversion 60% complete Costs transferred in during the month from the preceding department, 1,950 units Materials cost added during the month Conversion costs incurred during the month $ 8,208* 17,940 6,210 13,920 $ 46,278 Total departmental costs inishing Department costs assigned to: Units completed and transferred to finished goods, 1,800 units at $25.71 per unit $ 46,278 Work in process inventory, April 30, 600 units; materials 0% complete; conversion 35% complete 0 Total departmental costs assigned $ 46,278 nsists of cost transferred in, $4,068; materials cost, $1,980; and conversion cost, $2,160.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter3: Process Cost Systems

Section: Chapter Questions

Problem 7BE: In October, the cost of materials transferred into the Rolling Department from the Casting...

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Narwhal Swimwear has a beginning work in process inventory of 13,500 units and transferred in 130,000 units before ending the month with 14,000 units that were 100% complete with regard to materials and 30% complete with regard to conversion costs. The cost per unit of material is $5.80 and the cost per unit for conversion is $8.20 per unit. Using the weighted-average method, what is the amount of material and conversion costs assigned to the department for the month?
AAA Appliances Inc. has two production departments. The nature of the process is such that no units remain in process in Finishing at the end of the period. At the beginning of the period, 10,000 units with a cost of 30,000 were transferred from Assembly to Finishing. Finishing incurred costs of 8,800 for materials, 7,200 for labor, and 8,800 for factory overhead, and finished 10,000 units during the month. a. Determine the unit cost for the month in Finishing. b. Determine the unit cost of the products transferred to finished goods.
During March, the following costs were charged to the manufacturing department: $22,500 for materials; $45,625 for labor; and $50,000 for manufacturing overhead. The records show that 40,000 units were completed and transferred, while 10,000 remained in ending inventory. There were 45,000 equivalent units of material and 42,500 units of conversion costs. Using the weighted-average method, prepare the companys process cost summary for the month.
Fordman Company has a product that passes through two processes: Grinding and Polishing. During December, the Grinding Department transferred 20,000 units to the Polishing Department. The cost of the units transferred into the second department was 40,000. Direct materials are added uniformly in the second process. Units are measured the same way in both departments. The second department (Polishing) had the following physical flow schedule for December: Costs in beginning work in process for the Polishing Department were direct materials, 5,000; conversion costs, 6,000; and transferred in, 8,000. Costs added during the month: direct materials, 32,000; conversion costs, 50,000; and transferred in, 40,000. Required: 1. Assuming the use of the weighted average method, prepare a schedule of equivalent units. 2. Compute the unit cost for the month.
During October, McCourt Associates incurred total production costs of 60,000 for copyediting manuscripts and had the following equivalent units schedule: Required: 1. Calculate the cost of copyediting one manuscript for October. 2. Assign costs to manuscripts completed and to EWIP and then do a cost reconciliation. 3. What if the costs assigned to units completed and EWIP total were calculated using a unit cost of 225? What is the discrepancy between the costs assigned and the costs to account for? What could have caused an incorrect unit cost?
Chavez Concrete Inc. has two production departments. Blending had 1,000 units in process at the beginning of the period, two-fifths complete. During the period 7,800 units were received from Mixing, 8,200 units were transferred to the finished goods storeroom, and 600 units were in process at the end of the period, 1/3 complete. The cost of the beginning work in process was: The costs during the month were: 1. Using the data in E5-15, prepare a cost of production summary for the month ended January 31, 2016. 2. Prepare a journal entry to transfer the cost of the completed units from Blending to the finished goods storeroom.
AAA Appliances Inc. has two production departments. The nature of the process is such that no units remain in process in Finishing at the end of the period. At the beginning of the period, 10,000 units with a cost of 30,000 were transferred from Assembly to Finishing. Finishing incurred costs of 8,800 for materials, 7,200 for labor, and 8,800 for factory overhead, and finished 10,000 units during the month. Using the data in E5-9, prepare a statement of cost of goods manufactured for the month ended January 31, 2016, assuming that no further work was done in Assembly during January.
Rulers Company is a neon sign company that estimated overhead will be $60,000, consisting of 1,500 machine hours. The cost to make Job 416 is $95 in neon, 15 hours of labor at $13 per hour, and five machine hours. During the month, it incurs $95 in indirect material cost, $130 in administrative labor, $320 in utilities, and $350 in depreciation expense. What is the predetermined overhead rate if machine hours are considered the cost driver? What is the cost of Job 416? What is the overhead incurred during the month?
CleanCom Company specializes in cleaning commercial buildings and construction sites. Each building and site is different, requiring amounts and types of supplies and labor for each job. CleanCom estimated the following for the year: During the year, the following actual amounts were experienced: If CleanCom uses a normal costing system and overhead is applied on the basis of direct labor hours, what is the cost of cleaning a construction site that takes 140 of direct materials and 21 direct labor hours? a. 455 b. 508 c. 648 d. 644
Douglas Davis, controller for Marston, Inc., prepared the following budget for manufacturing costs at two different levels of activity for 20X1: During 20X1, Marston worked a total of 80,000 direct labor hours, used 250,000 machine hours, made 32,000 moves, and performed 120 batch inspections. The following actual costs were incurred: Marston applies overhead using rates based on direct labor hours, machine hours, number of moves, and number of batches. The second level of activity (the right column in the preceding table) is the practical level of activity (the available activity for resources acquired in advance of usage) and is used to compute predetermined overhead pool rates. Required: 1. Prepare a performance report for Marstons manufacturing costs in the current year. 2. Assume that one of the products produced by Marston is budgeted to use 10,000 direct labor hours, 15,000 machine hours, and 500 moves and will be produced in five batches. A total of 10,000 units will be produced during the year. Calculate the budgeted unit manufacturing cost. 3. One of Marstons managers said the following: Budgeting at the activity level makes a lot of sense. It really helps us manage costs better. But the previous budget really needs to provide more detailed information. For example, I know that the moving materials activity involves the use of forklifts and operators, and this information is lost when only the total cost of the activity for various levels of output is reported. We have four forklifts, each capable of providing 10,000 moves per year. We lease these forklifts for five years, at 10,000 per year. Furthermore, for our two shifts, we need up to eight operators if we run all four forklifts. Each operator is paid a salary of 30,000 per year. Also, I know that fuel costs about 0.25 per move. Assuming that these are the only three items, expand the detail of the flexible budget for moving materials to reveal the cost of these three resource items for 20,000 moves and 40,000 moves, respectively. Based on these comments, explain how this additional information can help Marston better manage its costs. (Especially consider how activity-based budgeting may provide useful information for non-value-added activities.)
Holmes Products, Inc., produces plastic cases used for video cameras. The product passes through three departments. For April, the following equivalent units schedule was prepared for the first department: Costs assigned to beginning work in process: direct materials, 90,000; conversion costs, 33,750. Manufacturing costs incurred during April: direct materials, 75,000; conversion costs, 220,000. Holmes uses the weighted average method. Required: 1. Compute the unit cost for April. 2. Determine the cost of ending work in process and the cost of goods transferred out.
During the month of June, the mixing department produced and transferred out 3,500 units. Ending work in process had 1,000 units, 40 percent complete with respect to conversion costs. There was no beginning work in process. The equivalent units of output for conversion costs for the month of June are: a. 3,500 b. 4,500 c. 3,900 d. 1,000