Question

4. Company C uses Process Costing system. Data about Company C is given below: Data for November Shaping Department Insertion Department Units: Beginning Work in Process 50.000 units Production started 120.000 units Transfer in From Previous ? Department Completed Goods Inv. 100.000 units 120.000 units Ending WIP Inv. 20.000 units 30.000 units Comp. as to Direct Material % 80 % 50 Comp. as to Convers. Work % 50 % 60 Costs: Beginning Work in Process $ 225.000 ? Transferred in from Previous Department $290.000 $ 270.000 Direct Materials Added $220.000 $ 207.000 Conversion Costs Added Required: Calculate Ending WIP Inventory-Shaping, Ending WIP Inventory-Insertion and Finished Goods Inventory. (25)

Answer 1

Cost of Production Report- Shaping Department

		Equivalent Units
Units	Physical Units	Direct Materials		Conversion
Units charged to production:
Begining WIP	-------
Plus: production Started	120000
Total physical units accounted for	120000
Units to be assigned costs:
Inventory in process	-
completed goods inventory	100000	100000	100%	100000	100%
ending WIP	20000	16000	80%	10000	50%
Total units to be assigned costs:	120000	116000		110000
Cost Information

Costs per equivalent unit		Direct Materials	Conversion
Total costs		$ 290000	$ 220000
Total equivalent units		116000	110000
Costs per equivalent unit		$ 2.5	$ 2

Shaping department		Direct Materials	Conversion	Total
cost of completed unit		250000 (2.5*100000)	200000 (2*100000)	450000	this is finished goods cost
Ending WIP		40000 (2.5*16000)	20000 (2*10000)	60000	this is ending wip cost
Total costs assigned				510000

Cost of Production Report- insertion Department

Units	Physical Units	Direct Materials		Conversion
Units charged to production:
Begning WIP	50,000
Plus: Received from Shaping Dept.	100000
Total physical units accounted for	150000
Units to be assigned costs:
Begning WIP	50,000	50000	100%	50000	100%
Started and completed (120000-50000)	70000	70000	100%	70000	100%
Transferred to Finished Goods	120000	120000		120000
Ending WIP	30000	15000	50%	18000	60%
Total units to be assigned costs:	150000	135000		138000

Costs per equivalent unit
Total costs		$ 270000	$ 207000
Total equivalent units		135000	138000
Costs per equivalent unit		$ 2	$ 1.5

Costs assigned to production
cost of begening WIP	$225000
Costs incurred (270000+207000)	$ 477000
Total costs accounted for	$ 702000

				225000
Begining WIP		$ 100000 (50000*2)	75000 (50000*1.5)
Started and completed in Dec		$ 140000 (70000*2)	$ 105000 (70000*1.5)
Transferred to Finished Goods		$ 240000	$ 180000	$420000	This is answer to Finished Goods ($).
Ending WIP		$ 30000 (15000*2)	$27000 (18000*1.5)	$57000	This is answer to Ending Inventory
Total costs assigned				$ 702000