Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Chapter 6, Problem 10CE
Morrison Company had the equivalent units schedule and cost information for its Sewing Department for the month of December, as shown on the next page.
Required:
- 1. Calculate the unit cost for December, using the weighted average method.
- 2. Calculate the cost of goods transferred out, calculate the cost of EWIP, and reconcile the costs assigned with the costs to account for.
- 3. What if you were asked to show that the weighted average unit cost for materials is the blend of the November unit materials cost and the December unit materials cost? The November unit materials cost is $6.60 ($66,000/10,000), and the December unit materials cost is $12.22 ($550,000/45,000). The equivalent units in BWIP are 10,000, and the FIFO equivalent units are 45,000. Calculate the weighted average unit materials cost using weights defined as the proportion of total units completed from each source (BWIP output and current output).
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Equivalent Units, Unit Cost, Weighted AverageRefer to the information for Alfombra Inc. on the previous page.Required:1. Prepare a physical flow analysis for the throw rug department for August.2. Calculate equivalent units of production for the throw rug department for August.3. Calculate the unit cost for the throw rug department for August.4. Show that the cost per unit calculated in Requirement 3 is a weighted average ofthe FIFO cost per equivalent unit in BWIP and the FIFO cost per equivalent unitfor August. (Hint: The weights are in proportion to the number of units from eachsource.)
The controller at Bethune Chemicals asks for your help in sorting out some cost information. You receive the following sheet for the
most recent year:
Cost of goods manufactured
Cost of goods sold
Direct labor costs
Direct materials inventory, December 31
Direct materials purchased
Finished goods inventory, December 31
Prime costs for the year
Total manufacturing costs
Work-in-process inventory, January 11
Required:
Compute:
a. Direct materials used.
b. Direct materials inventory, January 1.
c. Conversion costs.
d. Work-in-process inventory, December 31.
e. Manufacturing overhead.
1. Finished goods inventory, January 1.
a. Direct materials used
b. Direct materials inventory
c. Conversion costs
d. Work-in-process inventory
e. Manufacturing overhead
f. Finished goods inventory
$ 906,000
727,400
184,000
52,000
263,200
236,400
466,600
914,400
26,200
Multitute Inc., manufactures products that pass through two processes. The company uses the weighted average method to compute unit costs. During November, equivalent units were computed as follows:
Required:
a. Calculate the cost of the goods transferred out.
b. Calculate the cost of ending work in process.
c. Explain the manufacturing environment in which process costing is suitable.
Chapter 6 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 6 - What is a process? Provide an example that...Ch. 6 - Describe the differences between process costing...Ch. 6 - Prob. 3DQCh. 6 - What are transferred-in costs?Ch. 6 - Explain why transferred-in costs are a special...Ch. 6 - What is a production report? What purpose does...Ch. 6 - Can process costing be used for a service...Ch. 6 - What are equivalent units? Why are they needed in...Ch. 6 - How is the equivalent unit calculation affected...Ch. 6 - Describe the five steps in accounting for the...
Ch. 6 - Under the weighted average method, how are...Ch. 6 - Under what conditions will the weighted average...Ch. 6 - In assigning costs to goods transferred out, how...Ch. 6 - Prob. 14DQCh. 6 - What is operation costing? When is it used?Ch. 6 - Lamont Company produced 80,000 machine parts for...Ch. 6 - Lising Therapy has a physical therapist who...Ch. 6 - Fleming, Fleming, and Johnson, a local CPA firm,...Ch. 6 - During October, McCourt Associates incurred total...Ch. 6 - Tomar Company produces vitamin energy drinks. The...Ch. 6 - Apeto Company produces premium chocolate candy...Ch. 6 - Jackson Products produces a barbeque sauce using...Ch. 6 - Gunnison Company had the following equivalent...Ch. 6 - Jackson Products produces a barbeque sauce using...Ch. 6 - Morrison Company had the equivalent units schedule...Ch. 6 - Shorts Company has three process departments:...Ch. 6 - A local barbershop cuts the hair of 1,200...Ch. 6 - Friedman Company uses JIT manufacturing. There are...Ch. 6 - Lacy, Inc., produces a subassembly used in the...Ch. 6 - Softkin Company manufactures sun protection...Ch. 6 - Heap Company manufactures a product that passes...Ch. 6 - K-Briggs Company uses the FIFO method to account...Ch. 6 - The following data are for four independent...Ch. 6 - Using the data from Exercise 6.18, compute the...Ch. 6 - Holmes Products, Inc., produces plastic cases used...Ch. 6 - Dama Company produces womens blouses and uses the...Ch. 6 - Fordman Company has a product that passes through...Ch. 6 - Using the same data found in Exercise 6.22, assume...Ch. 6 - Baxter Company has two processing departments:...Ch. 6 - Tasty Bread makes and supplies bread throughout...Ch. 6 - Under either weighted average or FIFO, when...Ch. 6 - During the month of June, the mixing department...Ch. 6 - As goods are transferred from a prior process to a...Ch. 6 - During March, Hanks Manufacturing started and...Ch. 6 - Proteger Company manufactures insect repellant...Ch. 6 - Swasey Fabrication, Inc., manufactures frames for...Ch. 6 - Refer to the data in Problem 6.31. Assume that the...Ch. 6 - Hatch Company produces a product that passes...Ch. 6 - FIFO Method, Single Department Analysis, One Cost...Ch. 6 - Hepworth Credit Corporation is a wholly owned...Ch. 6 - Muskoge Company uses a process-costing system. The...Ch. 6 - Prob. 37PCh. 6 - Healthway uses a process-costing system to compute...Ch. 6 - FIFO Method, Two-Department Analysis Refer to the...Ch. 6 - Jacson Company produces two brands of a popular...Ch. 6 - Golding Manufacturing, a division of Farnsworth...Ch. 6 - Larkin Company produces leather strips for western...Ch. 6 - Novel Toys, Inc., manufactures plastic water guns....Ch. 6 - Prob. 44P
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