Question

ACC 321 BBAs3 Problem (chapter 17) Honeybutter, Inc., manufactures a product that goes through two departments prior to completion. The following information is available on work in the mixing department during June. Amount Completed Materials Conversion 317 Units Work in process, June 1 .......... 70,000 Started into production ........... 460,000 Completed and transferred out ..... 450,000 Work in process, June 30 ......... 80,000 5/7 3/4 5/8 Cost in the beginning work in process inventory and cost added during June were as follows: Work in process, June 1 ..... Cost added during June ...... Materials $ 35,000 391,000 Conversion $ 17,000 282,000 The company uses the weighted-average method to compute unit costs. The mixing de- partment is the first department in the production process; after mixing has been completed, the units are transferred to the bottling department. a) Determine the equivalent units for both material & conversion costs (in good form). b) Get the costs to account for, for both material & conversion costs (in good form). c) Calculate the costs per equivalent unit for both costs. d) What did it cost to make a unit during June? e) Prepare the journal entry for units completed in June. f) Justify the ending balance for Work-in Process inventory at June 30. g) Would you have gotten the same answer for d) if we had used the FIFO method? Why?

I only need the answers for e-g please :)

Answer 1

Answer is given below

General Journal Work in process - Bottling Department To Work in process - Mixing Department (Being transfer of completed units to Bottling unit Debit Credit $644,982 please see working below $644,982 f) The ending balance in Work in process consists the work done for equivalent units only Direct Material Conversion cost Total Cost of Ending Work in Process $50,118 (60,000*$0.84) $29,900 (50,000*$0.60) $50,118 Cost per equivalent unit is rounded off to 2 decimals g) FIFO method will give different cost per unit In FIFO method current period cost is divided by the equivalent units. Hence cost will be higher But in Weighted average method the opening WIP and Current period cost will be divided by the equivalent units Hence cost will be averaged out and lower than FIFO Weighted average $1.43 FIFO $1.45 Cost per equivalent unit Weighted Average cost method Schedule of Physical and Equivalent Units- Weighted Average Physical Units % Completed Equivalent Units Direct % Material Completed Conversion Cost Analysis of Physical Flow of Units Units to be accounted for Beginning WIP Inventory Units Started Total Units To Account for 70,000 460,000 530,000 Units accounted for Units Completed during Period: Units completed and transferred out Units in Ending WIP Inventory Total Units Accounted for Total Equivalent units 450,000 80,000 530,000 100% 75% 450,000 60,000 100% 62.50% 450,000 50,000 62 510,000 500,000 Unit Cost Analysis Schedule-Weighted Average Direct Material Conversion Cost Total Costs Cost to Account for Opening Work in process Current Period Costs Total cost $35,000 $391,000 $426,000 $17,000 $282,000 $299,000 $52,000 $673,000 $725,000 Divided by Equivalent units Cost per equivalent unit (Current period cost /Equivalent units) 510,000 $0.84 500,000 $0.60 | $1.43 Note : In weighted average method Opening WIP cost and Current period cost is added and then divided by equivalent units for EUP Analysis of Total Cost Production Cost Worksheet Direct Material Conversion Cost Costs Units Started and completed during period Cost incurred on Opening Work in process during the month Direct Material Conversion cost Total costs of units completed and transferred to Finished Goods $375,882 $375,882 $269,100 $644,982 $269,100 $269,100 $375,882 $50,118 Ending Work in process Inventory Direct Material Conversion cost Total Cost of Ending Work in Process Total Costs Accounted for $50,118 $29,900 $80,018 $725,000 $29,900 $29,900 $299,000 $50,118 $426,000 FIFO Method Schedule of Physical and Equivalent Units- FIFO Physical Units Equivalent Units % Direct % Conversion Completed Material Completed cost Analysis of Physical Flow of Units Units to be accounted for Beginning WIP Inventory Units Started Total Units To Account for 70,000 460,000 530,000 29% 100% 20,000 380,000 57% 100% 40,000 380,000 Units accounted for Units Completed during Period: From Beginning WIP in Inventory Units started and completed during Period Units completed and transferred out Units in Ending WIP Inventory Total Units Accounted for Total Equivalent units 70,000 380,000 450,000 80,000 530,000 75% 60,000 63% 50,000 460,000 470,000 Unit Cost Analysis Schedule-FIFO Method Direct Material Conversion Cost Total Costs Cost to Account for Opening Work in process $35,000 $17,000 $52,000 Current Period Costs Total cost $391,000 $391,000 $282,000 $282,000 $673,000 $725,000 Divided by Equivalent units Cost per equivalent unit (Current period cost/Equivalent units) 460,000 $0.85 470,000 $0.60 $1.45 Note: In FIFO method only current period cost is divided by equivalent units to arrive at cost per equivalent unit Analysis of Total Cost Production Cost Worksheet Direct Material Conversion Cost Total Costs Units Started and completed during period Opening WIP cost Cost incurred on Opening WIP during the month Direct Material Conversion cost Total costs of units completed and transferred to Finished Goods $35,000 $17,000 $323,000 $17,000 $24,000 $52,000 41,000 equivalent unit X EUP $323,000 $228,000 $644,000 $375,000 $228,000 $269,000 $51,000 Ending Work in process Inventory Direct Material Conversion cost Total Cost of Ending Work in Process Total Costs Accounted for $51,000 $30,000 $81,000 $725,000 $30,000 $30,000 $299,000 $51,000 $426,000