Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN: 9781305087408
Author: Edward J. Vanderbeck, Maria R. Mitchell
Publisher: Cengage Learning
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Chapter 5, Problem 17E

a.

To determine

Determine the month’s unit cost in finishing.

a.

Expert Solution
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Explanation of Solution

Equivalent units for production: The activity of a processing department in terms of fully completed units is known as equivalent units. It includes the completed units of direct materials and conversion cost of beginning work in process, units completed and transferred out, and ending work in process.

Unit Cost of Production: The cost production derived in terms of corresponding units of production is called unit cost of production.

Determine the month’s unit cost.

 Production Cost  
Cost Elements

Beginning Work

In Process

Cost for

Month

TotalEquivalent unit

Unit

Cost

Materials$6004,8005,40015,0000.36
Labor$1,50015,00016,50015,0001.10
Factory overhead$9009,60010,50015,0000.70
Total$3,00029,40032,400 2.16

Table (1)

Working Note:

(1) Compute equivalent units.

ParticularsUnits
Units completed and transferred13,000
3,000 units in process, two-third completed2,000
Equivalent units of production for the month15,000

Table (2)

b.

To determine

Compute the total cost of the products transferred to finished goods.

b.

Expert Solution
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Explanation of Solution

Compute the total cost of the products transferred to finished goods.

ParticularsUnits Completed
Cost in Assembly (2)78,000
Cost in Fishing (3)28,080
Cost of goods transferred to finished goods106,080

Table (3)

(2) Compute cost in assembly.

Cost in assembly=((Transferred units to finished goods)×Unit cost)=13,000×$6=$78,000

(3) Compute cost in fishing.

Cost in blending=((Transferred units to finished goods)×Unit cost)=13,000×$2.16=$28,080

Compute unit cost.

Unit cost=(Cost of goods received from Mixing)Units received from mixing=$84,00014,000=$6 per unit

c.

To determine

Compute the total cost of the ending work in process inventory in blending.

c.

Expert Solution
Check Mark

Explanation of Solution

Compute the total cost of the ending work in process inventory in blending.

ParticularsUnits Completed
Cost in Assembly (4)18,000
Cost in Fishing: 
Material (5)720
Labor (6)2,200
Factory overhead (7)1,400
Cost of ending work in process inventory22,320

Table (4)

Working Note:

(4) Compute cost in assembly.

Cost in assembly=((Units in processat the end of the period)×Unit cost)=3,000×$6=$18,000

(5) Compute the cost in fishing (material).

Cost in fishing(Material)=((Unit in processat the end of period)×End of the period×Unit cost of material)=(3,000×23×$0.36)=$720

(6) Compute the cost in fishing (labor).

Cost in fishing(Labor)=((Unit in processat the end of period)×End of the period×Unit cost of labor)=(3,000×23×$1.10)=$2,200

(7) Compute the cost in fishing (factory overhead).

Factory overhead=((Unit in processat the end of the period)×End of the period×(Unit cost of factory overhead))=(3,00×23×$0.70)=$1,400

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Chapter 5 Solutions

Principles of Cost Accounting

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