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    Exercise 4

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    rasyid_hasan
    The document contains examples and solutions to exercises involving the weighted average and FIFO inventory costing methods. It includes calculations of equivalent units of production, cost per equivalent unit, and applying costs to units transferred out and ending work in process under each method. The exercises provide practice applying inventory costing concepts to the computation of equivalent units, unit costs, and assignment of costs to inventory and production.

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    Exercise 4

    Uploaded by

    rasyid_hasan
    1K views3 pages
    The document contains examples and solutions to exercises involving the weighted average and FIFO inventory costing methods. It includes calculations of equivalent units of production, cost per equivalent unit, and applying costs to units transferred out and ending work in process under each method. The exercises provide practice applying inventory costing concepts to the computation of equivalent units, unit costs, and assignment of costs to inventory and production.

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    The document contains examples and solutions to exercises involving the weighted average and FIFO inventory costing methods. It includes calculations of equivalent units of production, cost per equivalent unit, and applying costs to units transferred out and ending work in process under each method. The exercises provide practice applying inventory costing concepts to the computation of equivalent units, unit costs, and assignment of costs to inventory and production.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    1K views3 pages

    Exercise 4

    Uploaded by

    rasyid_hasan
    The document contains examples and solutions to exercises involving the weighted average and FIFO inventory costing methods. It includes calculations of equivalent units of production, cost per equivalent unit, and applying costs to units transferred out and ending work in process under each method. The exercises provide practice applying inventory costing concepts to the computation of equivalent units, unit costs, and assignment of costs to inventory and production.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
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    The passage discusses different methods for calculating equivalent units, cost per equivalent unit, and applying costs to units in a manufacturing environment.

    The weighted average method calculates equivalent units by taking into account work in process inventory at the beginning and end of the period as well as units started and completed during the period. It weights these amounts by their percentage of completion.

    To calculate cost per equivalent unit using the weighted average method, total costs are divided by the total equivalent units of production.

    EXERCISE 4-2 Computation of Equivalent Units-Weighted-Average Method [L02]

    Answer :
    Materials Conversion
    Units transferred to the next department 190,000 190,000
    Ending work in process :
    Materials : 15000x80% 12000
    Conversion : 15000x40% 6000
    Equivalent units of production 202,000 196,000

    EXERCISE 4-3 Cost per Equivalent Unit-Weighted-Average Method [LO3]

    Answer :

    Cost : Materials Labor Overhead


    Cost of beginning work in process inventory $18,000 $5,500 $27,500
    Cost added during the period $238,900 $80,300 $401,500
    Total costs (a) $256,900 $85,800 $429,000
    Equivalent units of production (b) $35,000 $33,000 $33,000
    Cost per equivalent unit (a)/(b) $7.34 $2.6 $13

    EXERCISE 4-4 Applying Costs to Units-Weighted-Average Method [LO4]

    Answer :
    Materials Conversion Total
    Ending work in process inventory :
    Equivalent units of production (a) 300 100
    Cost per equivalent unit (see above) (b) $31.56 $9.32
    $1040
    0
    Units completed and transferred out:
    Units transferred to the next department (a) 1300 1300
    Cost per equivalent unit (see above) (b) $31.56 $9.32
    Cost of units transferred out (a)x(b) $41,028 $12,116
    $53,14
    4
    EXERCISE 4-5 (Appendix 4A) Computation of Equivalent Units-FIFO Methods
    [LO5]

    Answer :
    Materials Conversion
    To complete beginning work in process:
    Materials : 400 (100%-75%) 100
    Conversion : 400 (100%-25%) 300
    Units started and completed during the process 42,600 42,600
    Ending work in process :
    Materials : 500 x 80% complete 400
    Conversion : 500 x 30% complete 150
    Equivalent units of production 43,100 43,050

    EXERCISE 4-6 (Appendix 4A) Cost per Equivalent Unit-FIFO Method [L06]

    Answer :

    Materials Labor Overhead Total


    Cost added during the period (a) $193,320 $62,000 $310,000
    Equivalent units of production(b) 27,000 25,000 25,000
    Cost per equivalent unit (a)/(b) $7.16 $2.48 $12.4 22.04
    EXERCISE 4-7 (Appendix 4A) Applying Costs to units-FIFO Method [LO7]

    Answer :
    Materials Conversion Total
    Ending work in process inventory :
    Equivalent units of production(a) 800 200
    Cost per equivalent unit (see above) (b) $4.40 $1.30
    Cost of ending work in process inventory (a)x(b) $3520 $260 $3780
    Units transferred out :
    Cost in beginning work in process inventory $2,700 $380 $3080
    Cost to complete the units in beginning work
    in process inventory :
    Equivalent units of production required to
    Complete the units in beginning inventory 400 700
    Cost per equivalent units(see above) (b) $4.40 $1.30
    Cost to complete the units in beginning
    Inventory (a)x(b) $1,760 $910 $2670
    Cost of units started and completed this period :
    Units started and completed this period (a) 7,000 7,000
    Cost per equivalent unit (see above) (b) $4.40 $1.30
    Cost of units started and completed this
    Period (a)x(b) $30,800 $9,100 $39,900
    Total cost of units transffered out $45,650

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