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Chapter 6: Process Costing: 6-8j Problems

Book Title: Cornerstones of Cost Management
Printed By: Retno Ajeng Anissa Widiatri (rajenganissaw@gmail.com)
© 2017 Cengage Learning, Cengage Learning

Chapter Review
6-8j Problems

Problem 6.31

Weighted Average Method, Physical Flow, Equivalent Units, Unit Costs, Cost
Assignment, ABC

Objective 3 - Describe process costing for settings with ending work-in-

process inventories.5 - Prepare a departmental production report using the
weighted average method.

Swasey Fabrication, Inc., manufactures frames for bicycles. Each frame

passes through three processes: Cutting, Welding, and Painting. In
September, the Cutting Department of the Tulsa, Oklahoma, plant reported
the following data:

a. In Cutting, all direct materials are added at the beginning of the process.

b. Beginning work in process consisted of 40,500 units, 20 percent

complete with respect to direct labor and overhead. Costs in beginning
inventory included direct materials, $1,215,000; direct labor, $222,600;
and applied overhead, $150,000.

c. Costs added to production during the month were direct materials,

$2,565,000; direct labor, $3,471,150. Overhead was assigned using the
following information:

Activity Rate Actual Driver Usage

Inspection $150 per inspection hour 4,000 inspection hours

Maintenance $750 per maintenance 1,600 maintenance hours

hour

Receiving $300 per receiving order 2,000 receiving orders

d. At the end of the month, 121,500 units were transferred out to Welding,
leaving 13,500 units in ending work in process, or 25 percent complete.

Required:

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1. Prepare a physical flow schedule.

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

costs.

3. Compute unit cost under weighted average.

4. Calculate the cost of goods transferred to Welding at the end of the month.
Calculate the cost of ending inventory.

5. Prepare the journal entry that transfers the goods from Cutting to Welding.

Problem 6.32

FIFO Method, Physical Flow, Equivalent Units, Unit Costs, Cost Assignment

Objective 3 - Describe process costing for settings with ending work-in-

process inventories.4 - Prepare a departmental production report using the
FIFO method.

Refer to the data in Problem 6.31. Assume that the FIFO method is used.

Required:

1. Prepare a physical flow schedule.

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

costs.

3. Compute unit cost. Round to three decimal places.

4. Calculate the cost of goods transferred to Painting at the end of the month.
Calculate the cost of ending inventory.

Problem 6.33

Weighted Average Method, Single Department Analysis, Uniform Costs

Objective 5 - Prepare a departmental production report using the weighted

average method.

Hatch Company produces a product that passes through three processes:

Fabrication, Assembly, and Finishing. All manufacturing costs are added
uniformly for all processes. The following information was obtained for the
Fabrication Department for December:

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