job costing and process costing problems

Chapter 8 * Modified from PPT slides of McGraw-Hill/Irwin

Process Costing Practice Problems

Lecture 20

Practice Problem 1: Compute Equivalent Units

Weighted Average Method

Practice Problem 2: Compute Equivalent Units

FIFO Method

Practice Problem 3: Compute Equivalent Units

Weighted Average Method

Practice Problem 4: Compute Equivalent Units

FIFO Method

Practice Problem 5: Compute Equivalent Units

Weighted Average Method

A B

C D

Material 0 Conversion costs 4,000

Material 20,000 Conversion costs 3,000

40,000 40,000

60,000 47,000The equivalent units

(100%*20,000) (15%*20,000)

(0%*10,000) (40%*10,000)

Practice Problem 6: Compute Equivalent Units

FIFO Method

Practice Problem 7: Compute Cost per Equivalent Units

Practice Problem 7: Compute Cost per Equivalent Units

Practice Problem 7: Compute Cost per Equivalent Units

Practice Problem 8: Assigning Costs to Goods Transferred out and Ending Inventory

6.4 3.8

Practice Problem 9: Compute Cost per Equivalent Units

Material (40%*600) 240

Conversion costs (47%*600) 282

600

3,520 3,322

2800 28002800

Practice Problem 9: Compute Cost per Equivalent Units

Material (22,880/3,520)

Conversion costs (13,288/3,322)

6.5

4.0

Practice Problem 10: Assigning Costs to Goods Transferred out and Ending Inventory

Compute the cost of goods transferred out and the ending inventory using the FIFO method

Total Materials ConversionTransferred out

WIP Beginning units

Complete beginning WIP

$24,286 $16,160 $8,126Prior period costs

EU (Step 2) [A] 240 282

6.5 4.0Cost per EU (Step 4) [B]

Cost to complete

beginning WIP [A x B] 2688 1560 1128

Units started and completed

6.5 4.0Cost per EU [B]

Cost of units started,

completed and transferred

out [B x C]

29,400 18,200 11,200

$19,760 $12,328Total cost of units transferred

out

$32,088

2800 2800 2800Number of units [C]

Practice Problem 10: Assigning Costs to Goods Transferred out and Ending Inventory

Total Materials Conversion

Ending WIP

6.5 4.0Cost per EU (Step 4)

480 240EU (Step 2)

4080Ending WIP Cost $3120 $960

$22880Total cost assigned $13288 $36,168

Transferred out* $19,760* $12,328*$32,088*

Practice Problem 10: Assigning Costs to Goods Transferred out and Ending Inventory