FUNDAMENTAL ACCOUNTING PRINCIPLES
FUNDAMENTAL ACCOUNTING PRINCIPLES
24th Edition
ISBN: 9781264044375
Author: Wild
Publisher: McGraw-Hil
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Chapter 20, Problem 21QS

Requirement 1:

To determine

To compute:

The roasting department's equivalent units of production for materials for the month using FIFO method.

Requirement 1:

Expert Solution
Check Mark

Answer to Problem 21QS

Solution:


    Materials
    Equivalent Units
    18,000 units

Explanation of Solution

The equivalent units of production for Materials can be calculated as under −
First, units added and completed 100 % from the process will be calculated.
  Units added and completed 100 % = Units transferred out  Beginning inventory units

Given,

  • Units transferred out = 17,000 units ( 2,000 units + 18,000 units − 3,000 units)
  • Beginning inventory units = 2,000 units

  Units added and completed 100 % = Units transferred out  Beginning inventory unitsUnits added and completed 100 % = 17,000 units  2,000 unitsUnits added and completed 100 % = 15,000 units

Out of total units transferred, 15,000 units were added and completed and transferred out during the process.
Equivalent units of production as FIFO method will be calculated as under −

    Equivalent units of production -FIFO
    Direct Materials
    Units to complete - Beginning Inventory

    Direct Materials (2,000 X 30%)
    600
    Units completed and transferred out
    15,000
    Units completed - Ending Inventory

    Direct Materials (3,000 X 80%)
    2,400
    Equivalent units of production18,000

The above calculations can be explained as under −

For beginning inventory

Given,

  • Units in beginning inventory = 2,000 units
  • For direct material completed percentage = 70 %

   Equivalent units for Beginning inventory= Units in beginning inventory X(1 percent of completion) Units to be counted from beginning inventory for materials −
  Equivalent units= 2,000 units X ( 1  70%)Equivalent units= 2,000 units X 30 %Equivalent units= 600 units

For units added, completed and transferred out −
15,000 units calculated as above
For ending inventory

Given,

  • Units in ending inventory = 3,000 units
  • For direct material completed percentage = 80 %

  Equivalent units for ending inventory = Units in beginning inventory X Percent of completion

Equivalent units for ending inventory for materials −
  Units to be counted as completed = 3,000 units X 80%Units to be counted as completed = 2,400 units

Total equivalent units for production for materials will be calculated as under −
  Total equivalent units for production = Beginning equivalent units + Completed and transferred                                                               + Ending equivalent units

Given,

For materials −

  • Beginning equivalent units = 600 units
  • Completed and transferred = 15,000 units
  • Ending equivalent units = 2,400 units

  Total equivalent units for production = 600 units + 15,000 units + 2,400 units Total equivalent units for production = 18,000 units

Conclusion

Thus, the roasting department's equivalent units of production for materials for the month using FIFO method have been calculated.

Requirement 2:

To determine

To compute:

The roasting department's cost per equivalent unit of production for materials for the month using FIFO method.

Requirement 2:

Expert Solution
Check Mark

Answer to Problem 21QS

Solution:

The roasting department's cost per equivalent unit of production for materials for the month using FIFO method = $ 1.55 per unit

Explanation of Solution

The cost per equivalent unit for materials is calculated as under −

    Cost per Equivalent unit - FIFO
    Direct Materials
    Costs incurred during the period
    27,900
    Equivalent units of production
    18,000
    Cost per Equivalent unit1.55

Given,

For materials −

  • Costs incurred during the period = $ 27,900
  • Equivalent units of production = 18,000 units
  •   Cost per equivalent units=Total cost added during the processEquivalent units of productionCost per equivalent units=$27,90018,000 units Cost per equivalent units= $ 1.55 per unit

Conclusion

Thus, the roasting department's cost per equivalent unit of production for materials for the month using FIFO method has been calculated.

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Chapter 20 Solutions

FUNDAMENTAL ACCOUNTING PRINCIPLES

Ch. 20 - Prob. 11DQCh. 20 - Prob. 12DQCh. 20 - Prob. 13DQCh. 20 - Companies such as Apple commonly prepare a process...Ch. 20 - Prob. 15DQCh. 20 - Prob. 16DQCh. 20 - Prob. 17DQCh. 20 - How could a company manager use a process cost...Ch. 20 - Explain a hybrid costing system. Identify' a...Ch. 20 - Prob. 1QSCh. 20 - Prob. 2QSCh. 20 - Process vs. job order operations C1 For each of...Ch. 20 - Physical flow reconciliation C2 Prepare a physical...Ch. 20 - Prob. 5QSCh. 20 - A FIFO: Computing equivalent units C4 Refer to QS...Ch. 20 - Prob. 7QSCh. 20 - Prob. 8QSCh. 20 - Prob. 9QSCh. 20 - Prob. 10QSCh. 20 - Prob. 11QSCh. 20 - Prob. 12QSCh. 20 - Prob. 13QSCh. 20 - Prob. 14QSCh. 20 - Prob. 15QSCh. 20 - Prob. 16QSCh. 20 - A FIFO: Journal entry to transfer costs P4 Refer...Ch. 20 - Prob. 18QSCh. 20 - Weighted average: Assigning costs to output C3...Ch. 20 - Prob. 20QSCh. 20 - Prob. 21QSCh. 20 - Prob. 22QSCh. 20 - Recording costs of materials P1 Hotwax mates...Ch. 20 - Prob. 24QSCh. 20 - Recording costs of factory overhead P1 P3 Prepare...Ch. 20 - Recording transfer of costs to finished goods P4...Ch. 20 - Exercise 20-1 Process vs. job order operations C1...Ch. 20 - Exercise 20-2 Comparing process and job order...Ch. 20 - Prob. 3ECh. 20 - Prob. 4ECh. 20 - Prob. 5ECh. 20 - Prob. 6ECh. 20 - Prob. 7ECh. 20 - Exercise 20-8 Weighted average: Computing...Ch. 20 - Prob. 9ECh. 20 - Prob. 10ECh. 20 - Prob. 11ECh. 20 - Prob. 12ECh. 20 - Exercise 20-13A FIFO: Completing a process cost...Ch. 20 - Exercise 20-14 Production cost flow and...Ch. 20 - Exercise 20-15 Recording product costs P1 P2 P3...Ch. 20 - Prob. 16ECh. 20 - Prob. 17ECh. 20 - Prob. 18ECh. 20 - Prob. 19ECh. 20 - Prob. 20ECh. 20 - Prob. 21ECh. 20 - Exercise 20-22 Recording costs of labor P2 Prepare...Ch. 20 - Prob. 23ECh. 20 - Prob. 24ECh. 20 - Exercise 20-25 Recording cost flows in a process...Ch. 20 - Exercise 20-26 Interpretation of journal entries...Ch. 20 - Prob. 1APSACh. 20 - Prob. 2APSACh. 20 - Prob. 3APSACh. 20 - Problem 20-4A Weighted average: Process cost...Ch. 20 - Problem 20-5AA FIFO: Process cost summary:...Ch. 20 - Prob. 6APSACh. 20 - Prob. 7APSACh. 20 - Prob. 1BPSBCh. 20 - Prob. 2BPSBCh. 20 - Prob. 3BPSBCh. 20 - Prob. 4BPSBCh. 20 - Problem 20-5BA FIFO: Process cost summary;...Ch. 20 - Problem 20-6BAFIFO: Costs per equivalent unit;...Ch. 20 - Problem 20-7BA FIFO: Process cost summary,...Ch. 20 - Prob. 20SPCh. 20 - Prob. 20CPCh. 20 - Prob. 1GLPCh. 20 - Apple has entered into contracts that require the...Ch. 20 - Apple and Google work to maintain high-quality and...Ch. 20 - Prob. 3AACh. 20 - Prob. 1BTNCh. 20 - Prob. 2BTNCh. 20 - Many companies use technology to help them improve...Ch. 20 - Prob. 4BTNCh. 20 - Prob. 5BTNCh. 20 - Prob. 6BTN
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