## Appendix EX 20-28: Cost per Equivalent Unit – Average Cost Method### OverviewThe information provided relates to the production activities in the Forging Department for the month of June. The department utilizes the average cost method to track costs.### Account: Work in Process—Forging Department#### Table of Transactions| Date | Item | Debit | Credit | Balance Debit | Balance Credit ||------|------|-------|--------|---------------|----------------|| June 1 | Bal., 500 units, 40% completed | | | 5,000 | || June 30 | Direct materials, 3,700 units | 49,200 | | 54,200 | || June 30 | Direct labor | 25,200 | | 79,400 | || June 30 | Factory overhead | 25,120 | | 104,520 | || June 30 | Goods transferred, 3,600 units | | ? | ? | || June 30 | Bal., 600 units, 70% completed | | | ? | ? |### Analysis Tasksa. **Determine the cost per equivalent unit.**b. **Determine the cost of units transferred to Finished Goods.**c. **Determine the cost of units in ending Work in Process.**### Detailed Explanation- **Beginning Inventory (June 1):** 500 units at 40% completion relate to initial work in progress. The balance is recorded as 5,000 in debit. - **Additions during June (June 30):** - **Direct Materials:** 3,700 units are added with a debit cost of 49,200. - **Direct Labor:** The debit cost recorded is 25,200. - **Factory Overhead:** This also stands at a debit cost of 25,120.- **Transferred Goods:** 3,600 units were transferred, indicating completed production, but the exact debit and credit amounts need to be determined (?).- **Ending Inventory (June 30):** 600 units at 70% completion, with missing exact cost amounts.This account serves to illustrate the movement and allocation of production costs within the department, highlighting the significance of measuring and assigning costs through equivalent units under the average cost method. **Exercise 20-28****b.** - Transferred to Packing Department - Inventory in process, ending **Equivalent Units of Production****c.** - Cost per equivalent unit **d.** - Cost of units transferred to FG **e.** - Cost of units in ending WIP This exercise involves tracking production costs and inventory for a manufacturing process. It addresses the determination of equivalent units of production, calculation of cost per equivalent unit, and total costs for finished goods (FG) and work in process (WIP).

The equivalent units are the units computed as whole units multiplied by percentage of work…

Answered: Appendix EX 20-28 Cost per equivalent…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Date ACCOUNT Work in Process-Forging Department Nov. Item 1 Bal., 900 units, 60% completed 30 Direct materials, 12,900 units 30 Direct labor 30 Factory overhead 30 Goods transferred, 2 units 30 Bal., 1,400 units, 70% completed $ Debit 123,840 21,650 16,870 $ Credit ? ACCOUNT NO. Balance Debit Direct materials cost per equivalent unit Conversion cost per equivalent unit 10,566 134,406 156,056 172,926 ? Cost per equivalent units of $9.60 for Direct Materials and $3.00 for Conversion Costs. Based on the above data, determine each of the following amounts. ? If required, round your interim calculations to two decimal places. Round final answers (a-c) to the nearest dollar. a. Cost of beginning work in process inventory completed in November. Credit b. Cost of units transferred to the next department during November. $ c. Cost of ending work in process inventory on November 30. d. Costs per equivalent unit of direct materials and conversion included in the November 1 beginning work in…
PROBLEM 8 The following data for the month of September were taken form the cost records of Department 1 of Pro-Life products which uses process costing system: Opening inventory of work in process: Units – 500 (with all materials added and 50% of labor and overhead) Cost - Materials 2, 400 Labor 1, 500 Factory overhead 760 Put into production: Units – 5, 000 Costs - Materials 25, 100 Labor 19, 380 Factory overhead 14, 900 Completed and transferred – 4, 800 units Ending inventory of work in process: Units – 700 (with all materials, and 60% of labor and overhead) 10. The cost per equivalent unit (rounded to nearest centavo) under FIFO: 11. The cost per equivalent unit (rounded to nearest centavo) under weighted average:
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Equivalent Units of Production The following information concerns production in the Baking Department for March. All direct materials are placed in process at the beginning of production. ACCOUNT Work in Process-Baking Department ACCOUNT NO. Balance Date Item Debit Credit Debit Credit March 1 Bal., 8,400 units, 3/5 completed 26,880 31 Direct materials, 151,200 units 241,920 268,800 31 Direct labor 68.110 336,910 31 Factory overhead 38,318 375,228 31 Goods finished, 153,300 units 362,502 12,726 31 Bal. ? units, 3/5 completed 12,726 a. Determine the number of units in work in process inventory at March 31. units b. Determine the equivalent units of production for direct materials and conversion costs in March. If an amount box does not require an entry, leave it blank. Baking Department Equivalent Units of Production for Direct Materials and Conversion Costs Costs For March Direct Materials Conversion Equivalent Equivalent Whole Units Units Units Inventory in process, March 1 Started and…
Equivalent Units of Production The following information concerns production in the Baking Department for August. All direct materials are placed in process at the beginning of production. ACCOUNT Work in Process-Baking Department Date Item August 1 Bal., 8,100 units, 3/5 completed 31 Direct materials, 145,800 units 31 Direct labor 31 Factory overhead 31 Goods finished, 147,600 units 31 Bal., ? units, 4/5 completed Debit Credit 291,600 85,120 47,882 ACCOUNT NO. 420,426 Balance Balance Debit Credit 12,960 304,560 389,680 437,562 17,136 17,136 a. Determine the number of units in work in process inventory at August 31. units
Equivalent Units of Production: Weighted average method The following information concerns production in the Finishing Department for May. The Finishing Department uses the Weighted average method. ACCOUNT Work in Process—Finishing Department ACCOUNT NO. Date Item Debit Credit Balance Debit Credit May 1 Bal., 11,200 units, 80% completed 67,200 31 Direct materials, 54,900 units 200,934 268,134 31 Direct labor 124,600 392,734 31 Factory overhead 126,600 519,334 31 Goods transferred, 58,200 units 499,356 19,978 31 Bal., ? units, 30% completed 19,978 a. Determine the number of units in work in process inventory at the end of the month.fill in the blank 1 units 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. Whole units to be…
Equivalent Units of Production The following information concerns production in the Baking Department for March. All direct materials are placed in process at the beginning of production. ACCOUNT Work in Process—Baking Department ACCOUNT NO. Date Item Debit Credit Balance Debit Credit March 1 Bal., 6,000 units, 4/5 completed 24,000 31 Direct materials, 108,000 units 216,000 240,000 31 Direct labor 61,860 301,860 31 Factory overhead 34,800 336,660 31 Goods finished, 109,500 units 325,230 11,430 31 Bal. ? units, 3/5 completed 11,430 a. Determine the number of units in work in process inventory at March 31.fill in the blank e90ad102cfba051_1 units b. Determine the equivalent units of production for direct materials and conversion costs in March. If an amount is zero, enter in "0". Baking Department Equivalent Units of Production for Direct Materials and Conversion Costs For March…
The following information concerns production in the Finishing Department for May. The Finishing Department uses the Weighted average method. ACCOUNT Work in Process-Finishing Department ACCOUNT NO. Date Item Debit Credit Balance Debit Balance Credit May 1 Bal., 21,500 units, 65% completed 107,500 31 Direct materials, 105, 400 units 321,470 428,970 31 Direct labor 199, 300 628,270 31 Factory overhead 202, 500 830, 770 31 Goods transferred, 111,800 units 799, 370 31,400 31 Bal., ? units, 35% completed 31,400 a. Determine the number of units in work in process inventory at the end of the month. fill in the blank 1 of 1 units 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. Line Item Description Units Whole units to be accounted for fill in the blank 1 of 3 units Whole units to be assigned costs fill in the blank 2 of 3 units Equivalent…
The following information concerns production in the Baking Department for December. All direct materials are placed in process at the beginning of production. ACCOUNT Work in Process—Baking Department ACCOUNT NO. Date Item Debit Credit Balance Debit Credit Dec. 1 Bal., 4,500 units, 3/5 completed 8,955 31 Direct materials, 81,000 units 129,600 138,555 31 Direct labor 36,210 174,765 31 Factory overhead 20,364 195,129 31 Goods finished, 82,200 units 188,925 6,204 31 Bal., ? units, 2/5 completed 6,204 a. Based on the above data, determine each cost listed below. Round "cost per equivalent unit" answers to the nearest cent. 1. Direct materials cost per equivalent unit 1.6 2. Conversion cost per equivalent unit .7 3. Cost of the beginning work in process completed during December $fill in the blank 3 4. Cost of units started and completed during December $fill in the blank 4 5. Cost of the…

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