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 50% complete) Finished goods, December 31 Work in process, beginning of year (materials 100% complete; conversion 80% complete) 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 Started into production Costs added during the year Units completed during the year Equivalent units of production Cost per equivalent unit Materials Cost of ending work in process inventory Cost of finished goods inventory Conversion Units 41,000 46,000 Units Materials Conversion 36,000 845,000 840,000 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.) $ $ Costs $ 76,000 $129,500 2. Determine the amount of cost that should be assigned to the ending work in process and finished goods inventories. Total Costs Materials Conversion $ 38,000 $ 64,000 $766,000 0 $2,160,000
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 50% complete) Finished goods, December 31 Work in process, beginning of year (materials 100% complete; conversion 80% complete) 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 Started into production Costs added during the year Units completed during the year Equivalent units of production Cost per equivalent unit Materials Cost of ending work in process inventory Cost of finished goods inventory Conversion Units 41,000 46,000 Units Materials Conversion 36,000 845,000 840,000 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.) $ $ Costs $ 76,000 $129,500 2. Determine the amount of cost that should be assigned to the ending work in process and finished goods inventories. Total Costs Materials Conversion $ 38,000 $ 64,000 $766,000 0 $2,160,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.
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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 50% complete)
Finished goods, December 31
Work in process, beginning of year (materials 100% complete;
conversion 80% complete)
Started into production
Costs added during the year
Units completed during the year
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
Equivalent units of production
Cost per equivalent unit
Materials
Cost of ending work in process inventory
Cost of finished goods inventory
Conversion
Materials
Units
41,000
46,000
Units
36,000
845,000
840,000
Conversion
$
$
Costs
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.)
$ 76,000
$129,500
Total
Materials Conversion
00
$766,000
2. Determine the amount of cost that should be assigned to the ending work in process and finished goods inventories.
0
0
Costs
64,000
$2,160,000
Transcribed Image Text:2. Determine the amount of cost that should be assigned to the ending work in process and finished goods inventories.
Cost of ending work in process inventory
Cost of finished goods inventory
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Journal entry worksheet
< A
Note: Enter debits before credits.
Materials
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.)
Event
1
Record entry
Record the entry to adjust the work in process and finished goods inventories
Conversion
General Journal
Clear entry
$
S
Total
Debit
0
Credit
View general journal
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