accounting chapter 20

Process Costing

Chapter 20

Learning Objectives

1. Describe the flow of costs through a process costing system

2. Calculate equivalent units of production for direct materials and conversion costs

3. Prepare a production cost report using the weighted average method

Learning Objectives

4. Prepare journal entries for a process costing system

5. Use a production cost report to make decisions

6. Prepare a production cost report using the first-in, first-out method (Appendix 20A)

Learning Objective 1

Describe the flow of Describe the flow of costs through a costs through a process costing process costing

systemsystem

Job Order Costing vs.Process Costing

Process Costing Methods

• Weighted-average• First-in, first-out (FIFO—see Appendix 20A)

Process Costing—Calculating Cost per Unit

$600 ÷ 10,000 crayons = $0.06 per crayon$600 ÷ 10,000 crayons = $0.06 per crayon

Cost per Unit ofEach Process Is Used to:

• Control costs• Set selling prices• Calculate account balances

– Work-in-Process Inventory– Finished Goods Inventory– Cost of Goods Sold

Comparison of Cost Flows: Job Order Costing and Process Costing

Direct Materials

Direct Labor

Manufacturing Overhead

Work-in-Process Inventory

Job 27

Job 28

Job 29

Finished Goods Inventory

Job 27

Job 28

Cost ofGoods Sold

Job 27

Exhibit 20-2 Comparison of Cost Flows: Job Order Costing and Process CostingExhibit 20-2 Comparison of Cost Flows: Job Order Costing and Process Costing

PANEL A: Job Order Costing (Smart Touch Learning)

Balance Sheet Income Statement

Comparison of Cost Flows: Job Order Costing and Process Costing

Direct Materials

Direct Labor

Direct Materials

Direct Labor

Job 27

Job 28

Job 29

Job 27

Job 28

Cost ofGoods Sold

Job 27

FinishedGoods

Inventory

Work-in-Process InventoryMixing Work-in-Process

InventoryMolding

Packaging

Costof Goods

Exhibit 20-2 Comparison of Cost Flows: Job Order Costing and Process CostingExhibit 20-2 Comparison of Cost Flows: Job Order Costing and Process Costing

PANEL A: Job Order Costing (Smart Touch Learning)

Balance Sheet Income Statement

PANEL B: Process Costing (Cheerful Colors) Balance Sheet

Income Statement

Match each costing system characteristic to job order costing, process costing, or both.

1.Used by companies that manufactures identical items through a series of uniform production steps or processes.

Process costing

2.Transfers costs from Work-in-Process Inventory to Finished Goods Inventory to Cost of Goods Sold.

3.Used by companies that manufacture unique products or provide specialized services.

Job order costing

4.Has multiple Work-in-Process Inventory accounts.

Process costing

5.Tracks direct materials, direct labor, and manufacturing overhead costs.

Calculate equivalent Calculate equivalent units of production for units of production for

direct materials and direct materials and conversion costsconversion costs

All Costs Must Be Accounted For

Total Costs Incurredduring Period inDepartment 1

Costs Transferred toDepartment 2

at End of Period

Costs Remaining inDepartment 1

at End of Period

Exhibit 20-3 Assignment of Department 1 Costs at the End of the PeriodExhibit 20-3 Assignment of Department 1 Costs at the End of the Period

Equivalent Unitsof Production (EUP)

Cheerful Colors’ production plant has 10,000 crayons in ending Work-in-Process Inventory—Packaging. The crayons are 40% complete for direct materials and 80% complete for conver-sion. What are the equivalent units of pro-duction for direct materials? For conversion costs?

Direct materials10,000 crayons × 40% = 4,000 EUP

Conversion costs10,000 crayons × 80% = 8,000 EUP

Direct Labor + Manufacturing OverheadDirect Labor + Manufacturing Overhead

6. The Cutting Department has 6,500 units in process at the end of September that are 100% complete for direct materials and 85% complete for conversion costs. Calculate the equivalent units of production for direct materials and conversion costs.

Direct materials

6,500 units × 100% = 6,500 EUP

Direct materials

6,500 units × 100% = 6,500 EUP

Conversion costs

6,500 units × 85% = 5,525 EUP

Prepare a production Prepare a production cost report using the cost report using the

weighted average weighted average methodmethod

Flow of Costs in Producing Puzzles

AssemblyProcess

DirectMaterials Cardboard, picture, glue

DirectLabor

Workers operatingpressing machines

ManufacturingOverhead

Maintenance and depreciationon pressing machines

CuttingProcess

DirectMaterials Box

DirectLabor

Workers operatingcutting machines

ManufacturingOverhead

Maintenance and depreciationon cutting machines

Exhibit 20-4 Flow of Costs in Producing PuzzlesExhibit 20-4 Flow of Costs in Producing Puzzles

Partiallycompleted

puzzles

Completedpuzzles

Steps to Preparing aProduction Cost Report

1. Summarize the flow of physical units

2. Compute output in terms of equivalent units of production

3. Compute the cost per equivalent unit of production

4. Assign costs to units completed and units in process

Production Cost Report Terms

• To account for– Amount in process at the beginning of the period

+– Amount started or added during the period

• Accounted for– Still in process

or– Completed and transferred out

Production Cost Report – July Data for Puzzle Me

Step 1: Summarize theFlow of Physical Units

To account for = Beginning balance + Amount started

= 0 units + 50,000 units

= 50,000 units

Accounted for = Transferred out + In process

= 50,000 units

50,000 units = 40,000 units + In process

50,000 units = 40,000 units + 10,000 units

Production Cost Report—Assembly Department—Whole Units

Step 1: Physical flow of units

Step 2: Compute Output in Terms of Equivalent Units of Production

Direct Materials

Conversion Costs

Direct Materials

Completed units 40,000 units × 100% = 40,000 EUP

In process units 10,000 units × 100% = 10,000 EUP

Total EUP for direct materials50,000 EUP

Conversion Costs

Direct Materials

In process units 10,000 units × 100% = 10,000 EUP

Total EUP for direct materials50,000 EUP

Conversion Costs

In process units 10,000 units × 25% =2,500 EUP

Total EUP for conversion costs42,500 EUP

Production Cost Report—Assembly Department—EUP

Step 2: EUP

Step 3: Compute the Cost—Cost per EUP for Direct Materials

Cost per EUP for Direct Materials

= Total direct materials costs

Equivalent units of production for direct materials

= $140,00050,000 EUP

= $2.80 per EUP

Step 3: Compute the Cost—Cost per EUP for Conversion Costs

Cost per EUP for Conversion Costs

= Total conversion costs

Equivalent units of production for conversion costs

= $68,00042,500 EUP

= $1.60 per EUP

Production Cost Report—Assembly Department—Costs to Account For

Step 3:Costs to

Account for

Step 4: Assign Costs to Units Completed and Units In Process

Direct Materials

Conversion Costs

Direct Materials

Completed 40,000 EUP × $2.80 per EUP = $ 112,000

In process 10,000 EUP × $2.80 per EUP = 28,000

Total $140,000

Conversion Costs

Direct Materials

Total $140,000

Conversion Costs

Total $68,000

Production Cost Report—Assembly Department—Costs Accounted For

Step 4: Costs Accounted

Production Cost Report— July Data for Puzzle Me

To account for = Beginning balance + Amount transferred in

= 5,000 units + 40,000 units

= 45,000 units

= 5,000 units + 40,000 units

= 45,000 units

= 5,000 units + 40,000 units

= 45,000 units

45,000 units = 38,000 units + 7,000 units

Production Cost Report—Cutting Department—Whole Units

Transferred In

Direct Materials

Conversion Costs

Transferred InCompleted units 38,000 units × 100% = 38,000 EUPIn process units7,000 units × 100% = 7,000 EUPTotal EUP for transferred in 45,000 EUP

Direct Materials

Conversion Costs

Direct MaterialsCompleted units 38,000 units × 100% = 38,000 EUPIn process units 7,000 units × 0% = 0 EUPTotal EUP for direct materials 38,000 EUP

Conversion Costs

Direct MaterialsCompleted units 38,000 units × 100% = 38,000 EUPIn process units 7,000 units × 0% = 0 EUPTotal EUP for direct materials 38,000 EUP

Conversion CostsCompleted units 38,000 units × 100% = 38,000 EUPIn process units 7,000 units × 30% = 2,100 EUPTotal EUP for conversion costs 40,100 EUP

Production Cost Report—Cutting Department—EUP

Cutting Department:Costs to Account For

Step 3: Compute the Cost—Cost per EUP for Transferred In

Cost per EUP for Transferred In

= Total transferred in costs

Equivalent units of production for transferred in

= $198,00045,000 EUP

= $4.40 per EUP

= $19,00038,000 EUP

= $0.50 per EUP

= $16,00040,100 EUP

= $0.40 per EUP

Production Cost Report—Cutting Department—Costs to Account For

Transferred In

Direct Materials

Conversion Costs

Transferred InCompleted 38,000 EUP × $4.40 per EUP = $ 167,200In process 7,000 EUP × $4.40 per EUP = 30,800Total $ 198,000

Direct Materials

Conversion Costs

Direct MaterialsCompleted 38,000 EUP × $0.50 per EUP = $ 19,000In process 0 EUP × $0.50 per EUP = 0Total $ 19,000

Conversion Costs

Direct MaterialsCompleted 38,000 EUP × $0.50 per EUP = $ 19,000In process 0 EUP × $0.50 per EUP = 0Total $ 19,000

Conversion CostsCompleted 38,000 EUP × $0.40 per EUP = $ 15,200In process 2,100 EUP × $0.40 per EUP = 840Total $ 16,040

Production Cost Report—Cutting Department—Costs Accounted For

The Finishing Department started the month with 500 units in process, received 2,000 units from the Assembly Department, and transferred 2,100 units to the finished goods storage area. All materials are added at the beginning of the process. The units in process at the end of the month are 45% complete in respect to conversion costs. The Finishing Department incurred the following costs:

Beginning WIP Added this month Total

Transferred In $ 6,250 $ 25,000 $ 31,250

Direct Materials 500 2,000 2,500

Conversion Costs 1,250 5,590 6,840

Total $ 8,000 $ 32,590 $ 40,590

7. How many units are still in process at the end of the month?

To account for = 500 units + 2,000 units= 2,500 units

Accounted for = 2,100 units + In Process2,500 units = 2,100 units + In Process

In Process = 400 units

8. Compute the equivalent units of production for the Finishing Department.

Transferred InCompleted units 2,100 units × 100% = 2,100 EUPIn process units 400 units × 100% = 400 EUPTotal EUP for transferred in 2,500 EUP

Direct MaterialsCompleted units 2,100 units × 100% = 2,100 EUPIn process units 400 units × 100% = 400 EUPTotal EUP for direct materials 2,500 EUP

Conversion CostsCompleted units 2,100 units × 100% = 2,100 EUPIn process units 400 units × 45% = 180 EUPTotal EUP for conversion costs 2,280 EUP

9. Determine the cost per equivalent unit for transferred in, direct materials, conversion costs, and total costs.

Transferred In $31,250 = $ 12.50 per EUP2,500 EUP

Direct Materials $2,500 = $ 1.00 per EUP2,500 EUP

Conversion Costs $6,840 = $ 3.00 per EUP2,280 EUP

10. Determine the cost to be transferred to Finished Goods Inventory.

$16.50 per EUP × 2,100 EUP = $34,650

Prepare journal entries Prepare journal entries for a process costing for a process costing

systemsystem

Raw Materials Purchased

Transaction 1—Raw Materials Purchased: During July, the company purchased materials on account for $175,000.

Raw Materials Purchased

Transaction 1—Raw Materials Purchased: During July, the company purchased materials on account for $175,000.

L ↑ + E

RM ↑ A/P ↑

Raw Materials Used in Production

Transaction 2—Raw Materials Used in Production: During July, direct materials were assigned to the two production departments: $140,000 to the Assembly Department and $19,000 to the Cutting Department; $2,000 in indirect materials were accumulated in Manufacturing Overhead.

Raw Materials Used in Production

Transaction 2—Raw Materials Used in Production: During July, direct materials were assigned to the two production departments: $140,000 to the Assembly Department and $19,000 to the Cutting Department; $2,000 in indirect materials were accumulated in Manufacturing Overhead.

L + E ↓

RM ↓WIP - Assembly ↑

WIP - Cutting ↑

MOH ↑

Labor Costs Incurred

Transaction 3—Labor Costs Incurred: During the month, Puzzle Me incurred $20,000 in direct labor costs in the Assembly Department; $3,840 in direct labor costs in the Cutting Department; and $1,500 in indirect labor costs which were accumulated in Manufacturing Overhead.

Labor Costs Incurred

Transaction 3—Labor Costs Incurred: During the month, Puzzle Me incurred $20,000 in direct labor costs in the Assembly Department; $3,840 in direct labor costs in the Cutting Department; and $1,500 in indirect labor costs which were accumulated in Manufacturing Overhead.

L ↑ + E ↓

WIP - Assembly ↑WIP - Cutting ↑

WagesPayable ↑

MOH ↑

Additional ManufacturingCosts Incurred

Transaction 4—Additional Manufacturing Costs Incurred: In addition to the indirect materials and indirect labor costs, Puzzle Me incurred $35,000 in machinery depreciation and $20,000 in indirect costs that were paid in cash, which included rent and utilities.

Additional ManufacturingCosts Incurred

Transaction 4—Additional Manufacturing Costs Incurred: In addition to the indirect materials and indirect labor costs, Puzzle Me incurred $35,000 in machinery depreciation and $20,000 in indirect costs that were paid in cash, which included rent and utilities.

L + E ↓

AccumulatedDepreciation ↑

Cash ↓

MOH ↑

Allocation ofManufacturing Overhead

Transaction 5—Allocation of Manufacturing Overhead: Puzzle Me used a predetermined overhead allocation rate to allocate indirect costs to the departments: $48,000 to the Assembly Department and $11,000 to the Cutting Department.

Allocation ofManufacturing Overhead

Transaction 5—Allocation of Manufacturing Overhead: Puzzle Me used a predetermined overhead allocation rate to allocate indirect costs to the departments: $48,000 to the Assembly Department and $11,000 to the Cutting Department.

L + E ↑

WIP - Assembly ↑WIP - Cutting ↑

MOH ↓

Transfer from the Assembly Department to the Cutting Department

Transaction 6—Transfer from the Assembly Department to the Cutting Department: At the end of July, when the production cost report for the Assembly Department was prepared, Puzzle Me assigned $176,000 to the 40,000 units transferred from the Assembly Department to the Cutting Department.

Transfer from the Assembly Department to the Cutting Department

Transaction 6—Transfer from the Assembly Department to the Cutting Department: At the end of July, when the production cost report for the Assembly Department was prepared, Puzzle Me assigned $176,000 to the 40,000 units transferred from the Assembly Department to the Cutting Department.

A ↑ ↓

WIP - Assembly ↓WIP - Cutting ↑

Transfer from Cutting Departmentto Finished Goods Inventory

Transaction 7—Transfer from Cutting Department to Finished Goods Inventory: At the end of July, when the production cost report for the Cutting Department was prepared, Puzzle Me assigned $201,400 to the 38,000 units transferred from the Cutting Department to Finished Goods Inventory. This is the cost of goods manufactured.

Transfer from Cutting Departmentto Finished Goods Inventory

Transaction 7—Transfer from Cutting Department to Finished Goods Inventory: At the end of July, when the production cost report for the Cutting Department was prepared, Puzzle Me assigned $201,400 to the 38,000 units transferred from the Cutting Department to Finished Goods Inventory. This is the cost of goods manufactured.

A ↑ ↓

FG ↑WIP - Cutting ↓

Puzzles Sold

Transaction 8—Puzzles Sold: During July, Puzzle Me sold 35,000 puzzles. We have already determined from the production cost report for the Cutting Department that the cost of goods manufactured is $5.30 per puzzle. Therefore, the cost of 35,000 puzzles is $185,500 (35,000 puzzles × $5.30). The puzzles were sold on account for $8.00 each, which is a total of $280,000 (35,000 puzzles × $8.00).

Puzzles Sold

Transaction 8—Puzzles Sold: During July, Puzzle Me sold 35,000 puzzles. We have already determined from the production cost report for the Cutting Department that the cost of goods manufactured is $5.30 per puzzle. Therefore, the cost of 35,000 puzzles is $185,500 (35,000 puzzles × $5.30). The puzzles were sold on account for $8.00 each, which is a total of $280,000 (35,000 puzzles × $8.00).

A ↑ ↓

L + E ↑ ↓

A/R ↑FG ↓

Sales Revenue ↑COGS ↑

Adjust Manufacturing Overhead

Transaction 9—Adjust Manufacturing Overhead: The actual manufacturing overhead costs incurred were $58,500, which includes the indirect materials in Transaction 2, the indirect labor in Transaction 3, and the accumulated depreciation and other indirect costs in Transaction 4. The amount of manufacturing overhead allocated to the two departments was $59,000, as shown in Transaction 5.

L + E Manufacturing Overhead

Trans. 2 2,000 Trans. 5 59,000

Trans. 3 1,500

Trans. 4 35,000

Trans. 4 20,000

Bal 500

Adjust Manufacturing Overhead

Transaction 9—Adjust Manufacturing Overhead: The actual manufacturing overhead costs incurred were $58,500, which includes the indirect materials in Transaction 2, the indirect labor in Transaction 3, and the accumulated depreciation and other indirect costs in Transaction 4. The amount of manufacturing overhead allocated to the two departments was $59,000, as shown in Transaction 5.

L + E ↑ ↓

MOH ↑COGS ↓

Trans. 2 2,000 Trans. 5 59,000

Trans. 3 1,500

Trans. 4 35,000

Trans. 4 20,000

Bal 500

Key Accounts After Posting

Work-in-Process Inventory—Assembly

Balance, June 30 0 Trans. 6 176,000

Trans. 2 140,000

Trans. 3 20,000

Trans. 5 48,000

Balance, July 31 32,000

Work-in-Process Inventory—Cutting

Balance, June 30 23,200 Trans. 7 201,400

Trans. 2 19,000

Trans. 3 3,840

Trans. 5 11,000

Trans. 6 176,000

Balance, June 30 0 Trans. 8 185,500

Trans. 7 201,400

Cost of Goods Sold

Trans. 8 185,500 Trans. 9 500

11. Castillo Company has three departments: Mixing, Bottling, and Packaging. At the end of the month, the production cost reports for the departments show the costs of the products completed and transferred were $75,000 from Mixing to Bottling, $50,000 from Bottling to Packaging, and $65,000 from Packaging to Finished Goods Inven-tory. Prepare the journal entries for the transfer of the costs.

Transfer from Mixing to Bottling

Work-in-Process Inventory—Bottling 75,000

Work-in-Process Inventory—Mixing 75,000

Transfer from Bottling to Packaging

Work-in-Process Inventory—Packaging 50,000

Work-in-Process Inventory—Bottling 50,000

Transfer from Packaging to Finished Goods Inventory

Finished Goods Inventory 65,000

Work-in-Process Inventory—Packaging 65,000

Use a production cost Use a production cost report to make report to make

decisionsdecisions

How Managers Use ProductionCost Reports to Make Decisions

• Controlling costs• Evaluating performance• Pricing products• Identifying the most profitable products• Preparing the financial statements

12. Describe some ways managers use production cost reports to make business decisions.

Managers use production cost reports to:• Control costs• Evaluate performance• Price products• Identify profitability of different products• Prepare financial statements

Prepare a production Prepare a production cost report using the cost report using the

first-in, first-out first-in, first-out methodmethod

(Appendix 20A)(Appendix 20A)

Production Cost Report— July Data for Puzzle Me

= 5,000 units + 40,000 units

= 45,000 units

July Units Accounted For

BeginningInventory

5,000 units

Started andCompleted

in July33,000 units

Completed in July—38,000 units

Exhibit 20A-1 July Units Accounted ForExhibit 20A-1 July Units Accounted For

July Units Accounted For

BeginningInventory

5,000 units

Started andCompleted

in July33,000 units

EndingInventory

7,000 units

Started in July—40,000 units

Completed in July—38,000 units

Units Accounted For—45,000 units

Exhibit 20A-1 July Units Accounted ForExhibit 20A-1 July Units Accounted For

= 5,000 units + 40,000 units

= 45,000 units

Accounted for = Beginning balance + Started and completed + In process

= 5,000 units + 40,000 units

= 45,000 units

45,000 units = 5,000 units + Started and completed + 7,000 units

45,000 units = 5,000 units + 33,000 units + 7,000 units

Production Cost Report—Cutting Department—FIFO Method—Whole Units

Transferred In

Direct Materials

Conversion Costs

Transferred InBeginning WIP units 5,000 units × 0% = 0 EUPStarted and completed units 33,000 units × 100% = 33,000 EUPIn process units 7,000 units × 100% = 7,000 EUPTotal EUP for transferred in 40,000 EUP

Direct Materials

Conversion Costs

Direct MaterialsBeginning WIP units 5,000 units × 100% = 5,000 EUPStarted and completed units 33,000 units × 100% = 33,000 EUPIn process units 7,000 units × 0% = 0 EUPTotal EUP for direct materials 38,000 EUP

Conversion Costs

Direct MaterialsBeginning WIP units 5,000 units × 100% = 5,000 EUPStarted and completed units 33,000 units × 100% = 33,000 EUPIn process units 7,000 units × 0% = 0 EUPTotal EUP for direct materials 38,000 EUP

Conversion CostsBeginning WIP units 5,000 units × 40% = 2,000 EUPStarted and completed units 33,000 units × 100% = 33,000 EUPIn process units 7,000 units × 30% = 2,100 EUPTotal EUP for conversion costs 37,100 EUP

Timing of Conversion Costs

Exhibit 20A-3 Timing of Conversion CostsExhibit 20A-3 Timing of Conversion Costs

Beginning Inventory 60% 40%

Started and Completed 100%

Ending Inventory 30% 70%

June July August

Production Cost Report—Cutting Department—FIFO Method—EUP

Cutting Department:Costs to Account For

= $176,00040,000 EUP

= $4.40 per EUP

= $19,00038,000 EUP

= $0.50 per EUP

= $14,84037,100 EUP

= $0.40 per EUP

Production Cost Report—Cutting Department—FIFO Method—Costs to Account For

Transferred In

Direct Materials

Conversion Costs

Transferred In

Beginning WIP $ 22,000

To complete beginning WIP 0 EUP × $4.40 per EUP = 0

Started and Completed 33,000 EUP × $4.40 per EUP = 145,200

Transferred to FG 167,200

In process: 7,000 EUP × $4.40 per EUP = 30,800

Total $ 198,000

Direct Materials

Conversion Costs

Transferred In

Total $ 198,000

Direct Materials

Beginning WIP $ 0

To complete beginning WIP 5,000 EUP × $0.50 per EUP = 2,500

In process: 0 EUP × $0.50 per EUP = 0

Total $ 19,000

Conversion Costs

Transferred In

Total $ 198,000

Direct Materials

Beginning WIP $ 0

To complete beginning WIP 5,000 EUP × $0.50 per EUP = 2,500

In process: 0 EUP × $0.50 per EUP = 0

Total $ 19,000

Conversion Costs

Beginning WIP $ 700

To complete beginning WIP 2,000 EUP × $0.40 per EUP = 800

In process: 2,100 EUP × $0.40 per EUP = 840

Total $ 15,540

*Adjusted for $1 to correct rounding error

Production Cost Report—Cutting Department—FIFO Method—Costs Accounted For

Production Cost Report—Cutting Department—Costs Accounted For

Bishop Company uses the FIFO method in its process costing system. The Finishing Department started the month with 500 units in process that were 20% complete, received 2,000 units from the Assembly Department, and transferred 2,100 units to the finished goods storage area. All materials are added at the beginning of the process. The units in process at the end of the month are 45% complete with respect to conversion costs. The department incurred the following costs:

Beginning WIP Added this month Total

Transferred In $ 6,250 $ 25,000 $ 31,250

Direct Materials 500 2,000 2,500

Conversion Costs 1,250 5,450 6,700

Total $ 8,000 $ 32,450 $ 40,450

= 2,500 units

2,500 units = 500 units + 1,600 units + In process

400 units = In process

14. Compute the equivalent units of production for the Finishing Department for the current month.

Transferred InBeginning WIP units 500 units × 0% = 0 EUPStarted and completed units 1,600 units × 100% = 1,600 EUPIn process units 400 units × 100% = 400 EUPTotal EUP for transferred in 2,000 EUP

Direct MaterialsBeginning WIP units 500 units × 0% = 0 EUPStarted and completed units 1,600 units × 100% = 1,600 EUPIn process units 400 units × 100% = 400 EUPTotal EUP for direct materials 2,000 EUP

Conversion CostsBeginning WIP units 500 units × 80% = 400 EUPStarted and completed units 1,600 units × 100% = 1,600 EUPIn process units 400 units × 45% = 180 EUPTotal EUP for conversion costs 2,180 EUP

15. Determine the cost per equivalent unit for the current period for transferred in, direct materials, and conversion costs.

Transferred In:$25,000

2,000 EUP = $12.50 per EUP

Direct Materials:$2,000

2,000 EUP = $1.00 per EUP

Conversion Costs:$5,450

2,180 EUP = $2.50 per EUP

Transferred InBeginning WIP $ 6,250To complete beginning WIP 0 EUP × $12.50 per EUP = 0Started and Completed 1,600 EUP × $12.50 per EUP =

20,000Transferred to FG $ 26,250

Direct MaterialsBeginning WIP $ 500To complete beginning WIP 0 EUP × $1.00 per EUP = 0Started and Completed 1,600 EUP × $1.00 per EUP =

1,600Transferred to FG 2,100

Conversion CostsBeginning WIP $ 1,250To complete beginning WIP 400 EUP × $2.50 per EUP = 1,000Started and Completed 1,600 EUP × $2.50 per EUP =

4,000Transferred to FG 6,250

End of Chapter 20

accounting chapter 20

pearson education

prentice hall20

prentice hallcopyright

prentice hallcost

process inventoryjob

process costingcopyright

process costingpanel

process inventorymoldingwork

Education

chapter 20-1. chapter 20-2 chapter 20 job order costing...

chapter 20-1. chapter 20-2 chapter 20 budgetary planning...

chapter 20 accounting and finance in the international...

college accounting heintz & parry 20 th edition. chapter 16...

chapter 20 - internal control - office of financial …...

chapter 20 - internal control - washington · state...

chapter 6 – expenditure accounts · 20 special education...

1 accounting changes and error corrections chapter 20

chapter 20: accounting for pensions and postretirement...

20-1 using accounting for quality and cost management...

chapter 20 corporate accounting: earnings and distribution

chapter 1-1 chapter 1 managerial accounting managerial...

chapter 1-1 financial accounting and accounting standards...

chapter 20-1. chapter 20-2 chapter 20 job order cost...

chapter 7-1. chapter 7-2 chapter 7 accounting information...

chapter 19-1 chapter 19 managerial accounting accounting...

chapter 4 - general accounting · chapter 4 - general...

chapter 1-1. chapter 1-2 chapter 1 managerial accounting...

20 - 0 advanced accounting by debra jeter and paul chaney...

chapter 1-1 tax accounting. chapter 1-2 introduction to...