Chapter 20, Problem 20QS

To determine

Concept Introduction:

Ending Work in Process of the departments:

The ending work in process of the department can be defined as the units left in the department after the units are transferred to the next department from the total available units. Total available units are the sum of units in the beginning and the units started in the process.

The ending work in process of the department can be calculated as under −

  $\begin{array}{l}Endingworkinprocess=BeginningDirectMaterials+BeginningConversioncost\\ +CostaddedforMaterial+Costaddedforconversion\\ –Transferredtothenextdepartment\end{array}$

Ending work in process = Beginning Direct Materials + Beginning Conversion cost + Cost added for Material + Cost added for conversion − Transferred to the next department

Ending work in process inventory accounts for −

1. Cutting Department
2. Binding Department

Answer to Problem 20QS

Solution:

Ending work in process inventory accounts for −

1. Cutting Department = $ 7,100
2. Binding Department = $ 17,042

Explanation of Solution

The ending work in process inventory accounts for cutting department and binding department are calculated as under −

1. For cutting Department −

Given,

• Beginning Direct Materials = $ 845
• Beginning Conversion cost = $ 2,600
• Cost added for Material = $ 8,240
• Cost added for conversion = $ 11,100
• Transferred to the binding department = $ 15,685

Ending work in process inventory accounts for cutting Department is −

  $\begin{array}{l}Endingworkinprocess=BeginningDirectMaterials+BeginningConversioncost\\ +CostaddedforMaterial+Costaddedforconversion\\ –Transferredtothebindingdepartment\\ Endingworkinprocess=\$845+\$2,600+\$8,240+\$11,100-\$15,685\\ Endingworkinprocess=\$7,100\end{array}$

2. For Binding Department −

Given,

• Beginning WIP from cutting department = $ 1,200
• Beginning Direct Materials = $ 1,926
• Beginning Conversion cost = $ 3,300
• Cost added for Material = $ 6,356
• Cost added for conversion = $ 18,575
• Transferred from cutting department = $ 15,685
• Transferred to the finished goods = $ 30,000

Ending work in process inventory accounts for cutting Department is −

  $\begin{array}{l}Endingworkinprocess=BeginningWIPfromcuttingdepartment\\ \text{ + }BeginningDirectMaterials+BeginningConversioncost\\ +Transferredfromcutting\\ +CostaddedforMaterial+Costaddedforconversion\\ –Transferredtothefinishedgoods\\ Endingworkinprocess=\$\text{ 1,200}+\$\text{ 1,926+ \$ 3,300+\$ 6,356}+\$18,575+\$15,685-\$30,000\\ Endingworkinprocess=\$\text{ 17,042}\end{array}$

Conclusion

Thus, the ending work in process for cutting and binding departments have been determined.