handout ch 04 ind

8/3/2019 Handout Ch 04 Ind

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Work in process, May 1: 200 unitsMaterials: 50% complete. $ 3,000Conversion: 30% complete. 1,000

Units started into production in May: 5,000Units completed and transferred out in May: 4,800

Costs added to production in MayMaterials cost $ 74,000Conversion cost 70,000

Work in process, May 31: 400 unitsMaterials 40% complete.Conversion 25% complete.

Cost

Production Report Example


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Section 1: Quantity Schedule with Equivalent Units


Units to be accounted for:

W ork in process, May1 111 Sta rted into production .1111 Tota l units .1111

Equiva lent unitsM ate ria ls Conve rsio

Units accounted for a s follow s:From be genning, Ma y1 111 111 111

( x %) --m a te ria ls1 1 11 1( x %) -- conversion1 1 11 1


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Section 1: Quantity Schedule with Equivalent Units


Units to be accounted for:Work in process, May1 111

Sta rted into production .1111

Tota l units .1111

Equivalent unitsM a te ria ls Conve rsio

Units accounted for as follows:Beginning, May1 111 111 111 Com ple te d a nd tra nsfe rre d . 1 111 .1111 .1111


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Section 1: Quantity Schedule with Equivalent UnitsUnits to be accounted for:

Work in process, May 1 111 Started into production . 1111

Total units . 1111

Equivalent unitsMaterials Conversion

Units accounted for as follows:Beginning, May 1 111 111 111 Completed and transferred . 1 111 .1111 .1111 Work in process, May 11 111

Materials % complete11 111 .1111 .1 111


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Production Report ExampleSection 1: Quantity Schedule with Equivalent Units

Units to be accounted for:Work in process, May 1 111 Started into production . 1111 Total units . 1111

Equivalent unitsMateria ls Conversion

Units accounted for as follows:Beginning, May 1 111 111 111

Completed and transferred .1 111

.1111 .1111 Work in process, May 11 111 Materia ls % complete11 111 Conversion % complete11 111

.1111 .1 111 .1111


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Section 2: Compute cost per equivalent unit

Production Report Example`

TotalCost Materials Conversion

Cost to be accounted for:Work in process, May 1 .1111$Costs added in the Shipping

and Milling Department .111111 .11111 .11111 Total cost .111 111$ .11111$ .11111$

Equivalent units . 1 111 .1111


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Section 2: Compute cost per equivalent unitCost to be accounted for:

Work in process, May 1 .1111$Costs added in the Shipping

and Milling Department .111111 .11111 .11111 Total cost .111111$ .11111$ .11111$

Equivalent units . 1111 .1111 Cost per equivalent unit , 11 111$

$74,000 4,860 units = $15.226 (rounded)


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TotalCost Materials Conversion

Cost to be accounted for:

Work in process, May 1 .1111$Costs added in the Shipping

and Milling Department .111111 .11111 .11111 Total cost .111 111$ .11111$ .11111$

Equivalent units .1 111

.1111 Cost per equivalent unit , 11 111$ ,11 111$Total cost per equivalent unit = $ . + $ . = $ ,1 11 1 1 1 11 1 1 1 11 1 1


$70,000 4,840 units = $14.463 (rounded)

Section 2: Compute cost per equivalent unit



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Section 3: Cost ReconciliationProduction Report Example

Total Equivalent UnitsCost Materials Conversion

Cost accounted for as follow s:Transfer to next depertemen:

From beginning inventrory:Cost in beginning inventory .1111 Cost to complete these unit:Material, at $ . per EU1 11 1 1 .1 111 111Conversion, at $ , per EU1 11 1 1 .1111 11

Total cost .1111

$Unit started and completedthis month, at $ , per E1 11 1 1 .111111 .1111 .1111 Total cost transfeered .111111$


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Cost accounted for as follows:Transferred out during May $ . 111 111 .1 111 .1111 Work in process, May : 11

Materials 111 Conversion 111

Total work in process, May 11

Total cost accounted for


Section 3: Cost Reconciliation


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Cost accounted for as follows:Transferred out during May . 111 111$ .1111 .1111 Work in process, May : 11

Materials, at $ , 1 11 1 1 .1111 111 Conversion, at $ , 11111 .1111 111

Total work in process, May 11 .1111 Total cost accounted for $ . 111 111

160 units @ $15.226


Section 3: Cost Reconciliation

100 units @ $14,463

All costsaccounted for


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Operation Costing

Operation costing employs some aspectsof both job-order and process costing.

Conversion costsassigned to batches

as in process costing.

Conversion costsassigned to batches

as in process costing.

Material Costs Chargedto batches as in

job-order costing.

Material Costs Chargedto batches as in

job-order costing.

Job-order Costing ProcessCostingOperation Costing(Products produced in batches)

Comparison of Equivalent units


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E q u i v a l e n t U n i t

M a te r ia l sC o n v e r siE q u iv a l e n t u n i ts-w e ig h t-a v e r a g e m e th o d .1 111 .1 111 L e ss e q u iv a l e n t u n i t i n b e g i n n i n g i n v e n to r y

u n i ts x %1 1 1 1 1 111

u n i ts x %1 1 1 1 1 11 E q u iv a le n t u n i ts o f p r o d u c t i o n -F I F O m e th o d.1 111 .1 111

Comparison of Equivalent unitsUnder theWeight-average and

FIFO method

handout ch 04 ind

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