EXERCISE 4-22

(a)

Materials

Conversion Costs

9,000

9,000

Units transferred out

Work in process, July 31
1,000 100%
1,000 30%
Total equivalent units

1,000

300
9,300

10,000

(b) Materials:$45,000 10,000 = $4.50

Conversion costs:($16,200 + $17,280) 9,300 = $3.60

Costs accounted for

Transferred out (9,000 $8.10)
Work in process, July 31
Materials (1,000 $4.50)
Conversion costs (300 $3.60)
Total costs

(Total costs: $45,000 + $16,200 + $17,280 = $78,480)

$72,900
$4,500
1,080

5,580
$78,480

EXERCISE 4-28

BALOGH MANUFACTURING COMPANY

Welding Department
Production Cost Report
For the Month Ended February 29, 2012
Equivalent Units

Quantities

Physical
Units

Materials

(Step 1)
Units to be accounted for
Work in process, February 1
Started into production
Total units

24,000
60,000
84,000

Units accounted for

Transferred out
Work in process, February 29
Total units

54,000
30,000
84,000

Unit costs (Step 3)

Costs in February
Equivalent units
Unit costs (a) (b)

(Step 2)

54,000
30,000
84,000

Costs

Materials
(a)
(b)

Conversion
Costs

$176,400
84,000
$2.10

54,000
6,000
60,000
Conversion
Costs
$90,000
60,000
$1.50

Costs to be accounted for

Work in process, February 1
Started into production 1
Total costs
1
($146,400 + $32,780 + $53,045)

Total
$266,400
$3.60

$34,175
232,225
$266,400

Cost Reconciliation Schedule (Step 4)

Costs accounted for
Transferred out (54,000 $3.60)
Work in process, February 29
Materials (30,000 $2.10)
Conversion costs (6,000 1.50)
Total costs

$194,400
$63,000
9,000

72,000
$266,400

*EXERCISE 4-32
(a) (1) Materials:
Production Data
Work in process, Aug1
Started and completed
Work in process, Aug 31
Total

Physical
Units
0
8,000
1,000
9,000

Materials
Added
This Period
0
100%
100%

Equivalent
Units
0
8,000
1,000
9,000

*EXERCISE 4-32 (Continued)

(2) Conversion Costs:
Production Data
Work in process, Aug 1
Started and completed
Work in process, Aug 31
Total
(b) Unit costs are:
Materials
Conversion costs
Total
1

Physical
Units
0
8,000
1,000
9,000

$54,000 9,000 =
$43,0001 8,600 =

%
0
100
60

Equivalent
Units
0
8,000
600
8,600

$6.00
5.00
$11.00

$17,000 (Labour) + $26,000 (Manufacturing Overhead) = $43,000

Costs to Be
Assigned
Assignment of Costs
Total mfg. Transferred out
costs
Started and completed
Work in process, 8/31
Materials
Conversion costs
$97,000
2

Equivale
nt
Unit
Units Cost
8,000

$11

1,000
600

$6
$5

Total
Costs
Assigned
$88,000
6,000

3,000

9,000
$97,0002

$54,000 (Materials) + $17,000 (Labour) + $26,000 (Manufacturing

Overhead).

PROBLEM 4-41A
(a)

Physical
Units
Units to be accounted for
Work in process, November 1
Started into production
Total units

35,000
700,000
735,000

Units accounted for

Transferred out
Work in process, November 30
Total units

710,000
25,000
735,000

Total
Cost per unit

Beginning work in process

Added during month

Equivalent units
Per unit cost
1

$3.05

Equivalent Units
Conversion
Materials
Costs

710,000
25,000
735,000

710,000
10,000
720,000

Materials

Conversion
Costs

$ 69,000
1,548,000
$1,617,000

$48,150
563,8501
612,000

735,000

720,000

$2.20

$0.85

$225,920 + $337,930 = $563,850

(b) Costs accounted for

Transferred out (710,000 $3.05)

Work in process, November 30
Materials (25,000 $2.20)
Conversion costs (10,000 $0.85)
Total costs

PROBLEM 4-41A (Continued)

$2,165,500
$55,000
8,500

63,500
$2,229,000

(c)

CAVALIER COMPANY
Assembly Department
Production Cost Report
For the Month Ended November 30, 2012
Equivalent Units

Quantities

Physical
Units
(Step 1)

Units to be accounted for

Work in process, November 1
Started into production
Total units
Units accounted for
Transferred out
Work in process, November 30
Total units

Costs
Unit costs (Step 3)
Costs in November
Equivalent units
Unit costs (a) (b)
Costs to be accounted for
Work in process, November 1
Started into production
Total costs

Materials

Conversion
Costs

(Step 2)

35,000
700,000
735,000
710,000
25,000
735,000

710,000
25,000
735,000

Materials
(a) $1,617,000
(b) 735,000
$2.20

710,000
10,000 (25,000 40%)
720,000
Conversion
Costs
$612,000
720,000
$0.85

Total
$2,229,000
$3.05
$ 117,150
2,111,850
$2,229,000

Cost Reconciliation Schedule (Step 4)

Costs accounted for
Transferred out (710,000 $3.05)
Work in process, November 30
Materials (25,000 $2.20)
Conversion costs
(10,000 $0.85)
Total costs

$2,165,500
$55,000
8,500

63,500
$2,229,000

*PROBLEM 4-45A
(a)

Units in beginning work in process

Plus: transferred in
Total units in production
Less: completed and transferred out
Units in ending work in process

25,000
175,000
200,000
170,000
30,000

(b) and (c)

Physical
Units

Quantities
Units to be accounted for
Work in process, beginning
Transferred into production
Total units
Units accounted for
Work in process,
beginning
Transferred in and completed
Work In process, ending
Total units

Equivalent Units
Conversi
Trans Material
on
In
s
Costs

25,000
175,000
200,000

25,000
25,000 25,000
5,000
145,000 145,000 145,000

30,000
30,000
0
145,000
12,000

200,000 175,000 170,000 162,000
(b)
(c)

*PROBLEM 4-46A
Equivalent Units
Quantities

Physical
Material
Units

Labour

Overhead

Units to be accounted for

Work in process, beginning
Started this period
Total units

35,000
295,000
330,000

Units accounted for

Work in process, beginning

35,000

Materials (0%)

Labour (40%1)

14,000

Overhead (64%2)
Started and completed
Work In process, ending
Materials (100%)
Labour (50%)

22,400
265,0003 265,000 265,000 265,000
30,000
30,000
15,000

Overhead (40%)

12,000

Total equivalent units (m)

330,000 295,000m 294,000m 299,400m

Current period costs (n)

$45,380 $12,200n $15,000n

$18,180n

Per equivalent unit cost

$0.1531 $0.0414 $0.0510 $0.0607

[(n) (m)]
1

Labour 60% complete, 40% to be completed

Overhead 36% complete, 64% to be completed
3
330, 000 35,000 (beginning WIP) 30,000 (ending WIP)
2

PROBLEM 4-46A (Continued)

Costs for completed goods and ending work in process
Material Labour
Total
Beginning Inventory

$2,617

Complete beginning WIP

Materials (0 $0.0414)
Labour (14,000 $0.0510)
Overhead (22,400 $0.0607)

2,073

Started and completed

Materials (265,000 $0.0414)
Labour (265,000 $0.0510)
Overhead (265,000 $0.0607)
Cost for units transferred out

40,572

$1,330

$435

Conver
sion
$852

0
714
1,359

10,971
13,515
16,086
$45,262 $12,301 $14,664 $18,297

Ending work in process

2,735
Materials (30,000 $0.0414)
1,242
Labour (15,000 $0.0510)
765
Overhead (12,000 $0.0607)
728
Total costs $47,997 $13,543 $15,429 $19,025

PROBLEM 4-49B
(a)
Quantities

Units to be accounted for

Work in process, beginning
Started this period
Total units
Units accounted for
Completed
Work In process, ending
Strips (100%)
Buckles (100%)
Conversion (50%)
Total equivalent units (m)

(b)

Physical
Units

Equivalent Units
Conversi
Strips Buckles
on
Costs

12,200
22,800
35,000

21,000
14,000

21,000

14,000
35,000

35,000

Strips

Costs

Added during the month

21,000

14,000

TOTAL

Costs to be accounted for:

Work in process, beginning

21,000

35,000

7,000
28,000m

Conversi
Buckles
on
Costs

$4,650

$3,000

$750

$900

$137,550

61,800

13,650

62,100

Total costs (n)

$142,200 $64,800n $14,400n $63,000n

Per equivalent unit cost

[(n) (m)]

$4.51281 $1.8514 $0.4114

($1.8514 + $0.4114 + $2.25)

PROBLEM 4-49B (Continued)

$2.25

Cost accounted for as follows:

TOTAL

Completed and transferred out

(21,000 $4.5128)

$94,769

Ending work in process

Strips (14,000 $1.8514)
Buckles (14,000 $0.4114)
Conversion (7,000 $2.25)
Total costs

Strips

Convers
Buckles
ion
Costs

$47,430
$25,920
$5,760
$15,750
$142,199

(c) The weighted-average cost of a completed belt is $4.5128 each.

This is less than the planning and control cost for a belt, which might
indicate that no modifications in the production process are required.
However, companies should practice continuous improvement, and
still look for ways that could reduce their manufacturing costs, and
increase their gross margin.
Management should also investigate the accuracy of their control
cost of $4.85, as it may be out of date, and does not reflect actual
experience.