Tambin Inc. produces a gasoline additive that, when added to the gas tank of the average automobile, is designed to increase gas mileage by 20%. The company's controller suspects that the year-end dollar balances shown below in the inventory accounts may be incorrect. Work in process, December 31 (materials 100 % complete; conversion 60% complete) Finished goods, December 31 Work in process, beginning of year (materials 100% complete; conversion 50% complete) Started into production Costs added during the year Units completed during the year Costs Units Materials 27,000 There were no finished goods inventories at the beginning of the year. The company uses the weighted-average method of process costing. There is only one processing department. A review of the company's inventory and cost records shows the following: 607,000 Units 750,000 Costs 32,000 37,000 $ 67,000 Conversion $ 120,500 $ 29,000 $ 55,000 $ 757,000 $ 2,070,000 Required: 1. Determine the equivalent units and the costs per equivalent unit for materials and conversion for the year. (Round your "Cost per equivalent unit" answers to 2 decimal places.) 2. Determine the amount of cost that should be assigned to the ending work in process and finished goods inventories. 3. Prepare the necessary correcting journal entry to adjust the work in process and finished goods inventories to the correct balances as of December 31. (Round intermediate calculations to 2 decimal places.)
Tambin Inc. produces a gasoline additive that, when added to the gas tank of the average automobile, is designed to increase gas mileage by 20%. The company's controller suspects that the year-end dollar balances shown below in the inventory accounts may be incorrect. Work in process, December 31 (materials 100 % complete; conversion 60% complete) Finished goods, December 31 Work in process, beginning of year (materials 100% complete; conversion 50% complete) Started into production Costs added during the year Units completed during the year Costs Units Materials 27,000 There were no finished goods inventories at the beginning of the year. The company uses the weighted-average method of process costing. There is only one processing department. A review of the company's inventory and cost records shows the following: 607,000 Units 750,000 Costs 32,000 37,000 $ 67,000 Conversion $ 120,500 $ 29,000 $ 55,000 $ 757,000 $ 2,070,000 Required: 1. Determine the equivalent units and the costs per equivalent unit for materials and conversion for the year. (Round your "Cost per equivalent unit" answers to 2 decimal places.) 2. Determine the amount of cost that should be assigned to the ending work in process and finished goods inventories. 3. Prepare the necessary correcting journal entry to adjust the work in process and finished goods inventories to the correct balances as of December 31. (Round intermediate calculations to 2 decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Topic Video
Question
Please do not give solution in image format thanku
Transcribed Image Text:Tambin Inc. produces a gasoline additive that, when added to the gas tank of the average automobile, is designed to increase gas
mileage by 20%. The company's controller suspects that the year-end dollar balances shown below in the inventory accounts may be
incorrect.
Work in process, December 31 (materials 100% complete;
conversion 60% complete)
Finished goods, December 31
Work in process, beginning of year
(materials 100% complete;
conversion 50% complete)
Started into production
Costs added during the year
Units completed during the year
Costs
Units Materials
There were no finished goods inventories at the beginning of the year. The company uses the weighted-average method of process
costing. There is only one processing department.
A review of the company's inventory and cost records shows the following:
27,000
607,000
Units
750,000
Costs
32,000
37,000
$ 67,000
Conversion
$ 120,500
$ 29,000
$ 55,000
$ 757,000 $ 2,070,000
Required:
1. Determine the equivalent units and the costs per equivalent unit for materials and conversion for the year. (Round your "Cost per
equivalent unit" answers to 2 decimal places.)
2. Determine the amount of cost that should be assigned to the ending work in process and finished goods inventories.
3. Prepare the necessary correcting journal entry to adjust the work in process and finished goods inventories to the correct balances as
of December 31. (Round intermediate calculations to 2 decimal places.)
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Step 1: Concept introduction
VIEWStep 2: 1. Determination of equivalent units and cost per equivalent unit for material and conversion.
VIEWStep 3: 2. Determination of cost to be assigned to ending WIP and finished goods
VIEWStep 4: 3. Determination of correction entries to adjust WIP and finished goods
VIEWSolution
VIEW
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 9 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education