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Concept explainers
Concept introduction:
A
Work-in-progress (WIP) is a supply-chain management and production term telling partly finished goods in process of completion. WIP refers to the crude materials, overhead cost, and labour costs incurred for units that are at different stages of the production process. WIP is a part of the stock asset account on the
Requirement 1:
The number of units in hand that were transferred out and which are in closing work in progress (WIP).
Concept introduction:
The amount of work completed or job work is generally depicted by equivalent unit of production. Manufacturer who possesses partially finished goods in hand at the end of the month. Partially finished goods and fully finished goods in terms of fully finished goods. In other words, for determining per unit cost underlying cost accounting is used.
Requirement 2:
To explain:
The number equivalent units for material for the month.
Concept introduction:
The amount of work completed or job work is generally depicted by equivalent unit of production. Manufacturer who possesses partially finished goods in hand at the end of the month. Partially finished goods and fully finished goods in terms of fully finished goods. In other words, for determining per unit cost underlying cost accounting is used.
Requirement 3:
To explain:
The number equivalent units for conversion for the month.
Concept introduction:
Per unit cost of production is represented by cost per equivalent production. It is determined by dividing by EUP with TC
Requirement 4:
To explain:
The cost per equivalent units for material for the month.
Concept introduction:
Per unit cost of production is represented by cost per equivalent production. It is determined by dividing by EUP with TC
Requirement 5:
To explain:
The cost per equivalent units for conversion for the month.
Concept introduction:
Per unit cost of production is represented by cost per equivalent production. It is determined by dividing by EUP with TC
Requirement 6:
To explain:
The total cost of goods transfer for the month.
Concept introduction:
Work-in-progress (WIP) is a supply-chain management and production term telling partly finished goods in process of completion. WIP refers to the crude materials, overhead cost, and labour costs incurred for units that are at different stages of the production process. WIP is a part of the stock asset account on the balance sheet. These costs are later transferred to the finished goods account and ultimately to cost of sales.
Requirement 7:
To explain:
The total cost of closing work in progress(WIP) for the month.
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Chapter 3 Solutions
MANAGERIAL ACCOUNTING FUND. W/CONNECT
- Sonoma Products Inc. manufactures a liquid product in one department. Due to the nature of the product and the process, units are regularly lost during production. Materials and conversion costs are added evenly throughout the process. The following summaries were prepared for March: Calculate the unit cost for materials, labor, and factory overhead for March and show the costs of units transferred to finished goods and to ending work in process inventory.arrow_forwardThe following information concerns production in the Finishing Department for May. The Finishing Department uses the weighted average method. a. Determine the number of units in work in process inventory at the end of the month. b. Determine the number of whole units to be accounted for and to be assigned costs and the equivalent units of production for May. Assume that direct materials are placed in process during production.arrow_forwardThe following data appeared in the accounting records of Craig Manufacturing Inc., which uses the weighted average cost method: Case 1All materials are added at the beginning of the process, and labor and factory overhead are added evenly throughout the process. Case 2One-half of the materials are added at the start of the manufacturing process, and the balance of the materials is added when the units are one-half completed. Labor and factory overhead are applied evenly during the process. Make the following computations for each case: a. Unit cost of materials, labor, and factory overhead for the month b. Cost of the units finished and transferred during the month c. Cost of the units in process at the end of the montharrow_forward
- Aero Aluminum Inc. uses a process cost system. The records for May show the following information: Required: Prepare a cost of production summary for each department. (Hint: When preparing the Converting production summary, refer to the Rolling production summary for the costs transferred in during the month.)arrow_forwardTanaka Manufacturing Co. uses the process cost system. The following information for the month of December was obtained from the company’s books and from the production reports submitted by the department heads: Required: Prepare cost of production summaries for the Mixing, Blending, and Bottling (Hint: You must calculate the adjusted unit cost from Blending.) departments. Prepare a departmental cost work sheet. Draft the journal entries required to record the month’s operations. Prepare a statement of cost of goods manufactured for December. (Hint: Goods finished but not transferred to finished goods are considered part of work in process inventory.)arrow_forwardK-Briggs Company uses the FIFO method to account for the costs of production. For Crushing, the first processing department, the following equivalent units schedule has been prepared: The cost per equivalent unit for the period was as follows: The cost of beginning work in process was direct materials, 40,000; conversion costs, 30,000. Required: 1. Determine the cost of ending work in process and the cost of goods transferred out. 2. Prepare a physical flow schedule.arrow_forward
- Materials are added at the beginning of a production process, and ending work in process inventory is 30% complete with respect to conversion costs. Use the information provided to complete a production cost report using the weighted-average method.arrow_forwardThe following data show the units in beginning work in process inventory, the number of units started, the number of units transferred, and the percent completion of the ending work in process for conversion. Given that materials are added at the beginning of the process, what are the equivalent units for material and conversion costs for each quarter using the weighted-average method? Assume that the quarters are independent.arrow_forwardCost of production report The debits to Work in ProcessRoasting Department for Morning Brew Coffee Company for August, together with information concerning production, are as follows: All direct materials are placed in process at the beginning of production. A. Prepare a cost of production report, presenting the following computations: 1. Direct materials and conversion equivalent units of production for August 2. Direct materials and conversion costs per equivalent unit for August 3. Cost of goods finished during August 4. Cost of work in process at August 31 B. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (July).arrow_forward
- Yellowstone Fabricators uses a process cost system and applies actual factory overhead to work in process at the end of the month. The following data came from the records for March: There were no beginning inventories and no ending work in process inventory. From the information presented, compute the following: 1. Unit cost of production under absorption costing and variable costing. 2. Cost of the ending inventory under absorption costing and variable costing.arrow_forwardThe standard cost summary for the most popular product of Phenom Products Co. is shown as follows, together with production and cost data for the period. One gallon each of liquid lead and varnish are added at the start of processing. The balance of the materials is added when the process is two-thirds complete. Labor and overhead are added evenly throughout the process. There were no units in process at the beginning of the month. Required: Calculate equivalent production for materials, labor, and overhead. (Be sure to refer to the standard cost summary to help determine the percentage of materials in ending work in process.) Calculate materials and labor variances and indicate whether they are favorable or unfavorable, using the diagram format shown in Figure 8-4. Determine the cost of materials and labor in the work in process account at the end of the month.arrow_forwardGunnison Company had the following equivalent units schedule and cost information for its Sewing Department for the month of December: Required: 1. Calculate the unit cost for December, using the FIFO 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 for the unit cost from the month of November? Calculate Novembers unit cost and explain why this might be of interest to management.arrow_forward
- Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubPrinciples of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage LearningExcel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
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