(EX 20-3)



(EX 20-3)

Domino Foods, Inc.,manufactures a sugar product by a continuous process, involving three production departments--Refining, stiffing, and Packing. Assume that records indicate that direct materials, direct labor, and applied factory overhead for the first department, Refining, were $355,000, $132,000, and 93,600, respectfully. Also, work in process at the end of the period totaled $31,200.

Journalize the entries to record (a) the flow of cost into the Refining Department during the period for (1) direct materials, (2) direct labor, and (3) factory overhead, and (b) the transfer of production cost to the second department, Stiffing.

(EX 20-4)

The chief cost accountant for Crystal Spring Beverage Co. estimated that total factory overhead cost for Blending Department for the coming fiscal year begging March 1 would be $455,000 and total direct labor cost would be $325,000. During March, the actual direct labor cost totaled $27,000, and factory overhead cost incurred totaled $36,000.

a. What is the predetermined factory overhead rate based on direct labor cost?

b. Journalize the entry to apply factory overhead to production for March.

c. What is the March 31 balance of the account Factory Overhead--Blending Department?

d. Does the balance in part (c) represent over applied or under applied factory overhead?

(EX 20-11)

The charges to work in process--Assembly Department for a period, together with information concerning production, are as follows. All direct materials are placed in process at the begging of production.

WORK IN PROCESS--ASSEMBLY DEPARTMENT

Bal.,3,000 units, 40% completed 8,550 &nbs p; To Finished Goods, 62,500 units ?

Direct labor 103,850

Factory overhead 145,300

Bal. ? units, 25% completed ?

Determine the following:

a.The number of units in work in process inventory at the end of the period.

b.Equivalent units of production for direct materials and conversion.

c.Cost per equivalent unit for direct materials and conversion.

d.Cost of the units started and completed during the period.

(EX 20-12)

a.based upon the data in Exercise 20-11, determine the following:

1.Cost of begging work in process inventory completed this period.

2.Cost of units transferred to finished goods during the period.

3.Cost of ending work in process inventory.

4.Cost per unit of begging work in process completed during the period.

b.Did the production cost change from preceding period? Explain.

c.Assuming that the direct materials cost per unit did not change from the preceding period, did the conversion cost per equivalent unit increase, decrease, or remain the same for the current period?

(EX 20-16)

The debits to Work In Process--Cooking Department for Yankee Bean Company for March 2008, together with information concerning production, are as follows:

Work in process, March 1, 3,000 pounds, 30% completed $ 14,160*

*Direct materials (3000 x $4,000) $12,000

Conversion (3,000 x 30% x $2.40) 2,160

&nbs p; &nbs p; $14,160

Beans added during March, 85,900 pounds 352,190

Conversion cost during March &n bsp; 192,242

Work in process, March 31, 5,700 pounds, 25% completed ?

Goods finished during, March, 83,200 pounds ?

All direct materials are placed in process at the begging of production. Prepare a cost of production report, presenting the following computations:

a.Direct materials and conversion equivalent units of production for March.

b.Direct materials and conversion cost per equivalent unit for March.

c.Cost of goods finished during March.

d.Cost of work in process at March 31, 2008

(EX 20-17)

Prepare a cost of production report for the Cutting Department of Aladdin Carpet Company for May 2008, using the following data and assuming that all Materials are added at the begging of the process:

Work in process, May 1, 5,000 units, 75% completed

*Direct materials(5,000 x $6,000) $30,000 &nb sp; $ 49,800

Conversion (5,000 x 75% x $ 5.28) 19,800

*49,800

Materials added during May from Weaving Department, 186,000units 1,134,600

Direct labor for may &nbs p; &nbs p; 405,600

Factory Overhead for May &nbs p; &nbs p; 540,436

Goods finished during May (includes goods in process, May 1), 183,400 units

Work in process, May 31, 7,600 units, 30% completed

(Ex 20-18)

Titanium Metals Inc. casts blades for turbine engines. Within the Casting Department, alloy in first melted in a crucible, then poured into molds to produce the castings. On October 1, there were 700 pounds of alloy in process, which were 60% complete as to conversion. The Work in Process balance for these 700 pounds was $45,920, determined as follows:

Direct materials (700x $47) 32,900

Conversion (700 x 60% x $31) 13,020

&nbs p; 45,930

During October, the Casting Department was charged $441,000 for 9,000 pounds of alloy and $108,000 for direct labor. Factory overhead is applied to the department at a rate of 150% of direct labor. The department transferred out 9,200 pounds of finished castings to theMachining Department. The October 31 inventory in process was 44% complete as to conversion.

a.Prepare the following October Journal entries for the Casting Department:

1.The materials charged to production.

2.The conversion cost charged to production.

3.The completed production transferred to the Machining Department.

b.Determine the Work in Process--Casting Department October 31 balance.

(EX 20-19)

Papyrus Paper Company manufactures newsprint. The product is manufactured in two departments, Paper making and Converting. Pulp is first placed into a vessel at the beginning of paper making production. The following information concerns production in the Paper making Department for July.

ACCOUNT Work In Process-- Paper making Department &nbs p; &nbs p; ACCOUNT NO.

&nbs p; &nbs p; &nbs p; &nbs p; Balance

DATE &nbs p; Item Debit Credit Debit Credit

July 1 Bal.,5,000 units completed &nbs p; &nbs p; 24500

31 Direct materials, 68,000 Units 306,000 ; 330,000

31 Direct labor &nbs p; 100,000 430,500

31 Factory overhead &nb sp; 61,000 491,000

31 Goods transferred, 65,000 units &nbs p; ? ?

31 Bal.,8,000 units, 75% completed &nbs p; &nbs p; ?

a. Prepare the following July journal entries for the Paper making Department:

1.The materials charges to production.

2.The conversion cost charged to production.

3.The completed production transferred to the Converting Department.

b.Determine the Work in Process--Paper making department July 31 balance

Ex. 20–3

a. 1. Work in Process—Refining Department 355,000

Materials 355,000

2. Work in Process—Refining Department 132,000

Wages Payable 132,000

3. Work in Process—Refining Department 93,600

Factory Overhead—Refining Department 93,600

b. Work in Process—Sifting Department 574,900*

Work in Process—Refining Department 574,900

*$25,500 + $355,000 + $132,000 + $93,600 – $31,200

Ex. 20–4

a. Factory overhead rate:

$455,000 ÷ $325,000 = 140%

b. Work in Process—Blending Department 37,800

Factory Overhead—Blending Department 37,800

$27,000 × 140% = $37,800

c. $1,800 credit

d. Overapplied factory overhead

Ex. 20–11

a.

Units in process at beginning of period 3,000

Units placed in production during period 67,000

Less units finished during period (62,500)

Units in process at end of period 7,500

b.

| |A |B |C |D |

| | |Whole Units |Direct Materials |Conversion | |

|1 | Inventory in process, beginning | 3,000 | 0 | |

| |(40% completed) | | |1,80|

| | | | |0 |

| | |Costs | |

| | |Direct Materials |Conversion | |

|1 | Total costs for period in Assembly Department | $ 103,850 | $ 202,160* |1 |

|2 | Total equivalent units (from above) | / 67,000 | / 63,175 |2 |

|3 | Cost per equivalent unit | $ 1.55 | $ 3.20 |3 |

|4 | *$145,300 + $56,860 | | |4 |

d. $282,625 [($1.55 + $3.20) × 59,500 units]

Ex. 20–12

a. 1. $14,310; determined as follows:

Beginning work in process balance $ 8,550

Conversion costs incurred during period

(1,800 equivalent units × $3.20) 5,760

Cost of beginning work in process completed during period $14,310

2. Cost of beginning work in process $ 14,310

Cost of units started and completed during period 282,625*

Cost of units transferred to finished goods during period $296,935

*($1.55 + $3.20) × 59,500 units

3. $17,625; determined as follows:

Direct materials ($1.55 × 7,500 units) $11,625

Conversion costs ($3.20 × 1,875 equivalent units) 6,000

Cost of ending work in process inventory $17,625

Note: The cost of ending work in process is also the ending balance of Work in Process—Assembly Department.

4. $4.77 ($14,310/3,000 units)

b. Yes. The production costs per unit decreased during the current period. We know this because the cost per unit of the units started and completed during the period is $4.75 ($1.55 + $3.20). Since the cost per unit of the beginning work in process completed during the period is $4.77 [see part (4) above], the production costs during the current period must have decreased.

c. The conversion cost in the current period decreased by $0.05 per equivalent unit; determined as follows:

Beginning work in process $8,550

Deduct direct materials cost incurred in prior period

($1.55 × 3,000 units) 4,650

Conversion costs incurred in prior period $3,900

Prior period conversion cost per equivalent unit

[$3,900/(3,000 units × 0.40)] $3.25

Less current period conversion cost per equivalent unit 3.20

Decrease in conversion cost per equivalent unit during

current period $0.05

Ex. 20–16

| |A |B |C |D |

| |YANKEE BEAN COMPANY | |

| |Cost of Production Report—Cooking Department | |

| |For the Month Ended March 31, 2008 | |

| | | | | |

| | | |Equivalent Units | |

| | | |Direct Materials |Conversion | |

| |Units |Whole Units |(a) |(a) | |

|1 |Units charged to production: | | |

| |Costs |Direct Materials |Conversion |Total | |

|1 |Unit costs: | | | |

| |ALADDIN CARPET COMPANY | |

| |Cost of Production Report—Cutting Department | |

| |For the Month Ended May 31, 2008 | |

| | | | | |

| | | |Equivalent Units | |

| |Units |Whole Units |Direct Materials |Conversion | |

|1 |Units charged to production: | | |

| |Costs |Direct Materials |Conversion |Total | |

|1 |Unit costs: | | | |

| | |Whole Units |Materials |Conversion | |

|1 |Inventory in process, October 1 | 700 | — | |

| |(60% completed) | | |2801|

| | |Whole Units |Materials |Conversion | |

1 |Inventory in process, July 1

(20% completed) | 5,000 | — | 4,0001 |1 | |2 |Started and completed in July | 60,000 | 60,000 | 60,000 |2 | |3 |Transferred to Converting Department

in July | 65,000 | 60,000 | 64,000 |3 | |4 |Inventory in process, July 31

(75% completed) | 8,000 | 8,000 | 6,0002 |4 | |5 |Total | 73,000 | 68,000 | 70,000 |5 | |6 |180% × 5,000 | | | |6 | |7 |275% × 8,000 | | | |7 | |

Cost per equivalent unit of materials: [pic] = $4.50 per unit

Cost per equivalent unit of conversion: [pic] = $2.30 per unit

b. $49,800; determined as follows:

Direct materials (8,000 × $4.50) $ 36,000

Conversion (8,000 × 75% × $2.30) 13,800

$ 49,800

or

$49,800 = $24,500 + $306,000 + $100,000 + $61,000 – $441,700

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