Managerial Accounting: Tools for Business Decision-Making,

Fourth Canadian Edition

Weygandt, Kimmel, Kieso, Aly

PROBLEM 4-57B

(a)

Physical

Units

Equivalent Units

Quantities

Materials

Conversion

Costs

Units to be accounted for

Work in process, beginning

500

Started this period

2,500

Total units

2,500

Units accounted for

Started and completed

1,700

1,700

1,700

Work In process, ending

800

Materials (100%)

800

Conversion (40%)

320

(1)

Total equivalent units

2,500

2,500

2,020

Costs for this period (see below)

$65,000

$70,700

(2)

Cost per equivalent unit

$61.00

$26.00

$35.00

Costs

TOTAL

Materials

Conversion

Costs

Costs to be accounted for:

Work in process, beginning

$33,000

$15,000

$18,000

Added this period

102,700

50,000

52,700

Total costs

$135,700

$65,000

$70,700

____________________________________________________________________________________________________________________

Solutions Manual © 2015 John Wiley & Sons Canada, Ltd.

Unauthorized copying, distribution, or transmission of this page is prohibited

4-82

Managerial Accounting: Tools for Business Decision-Making,

Fourth Canadian Edition

Weygandt, Kimmel, Kieso, Aly

PROBLEM 4-57B (Continued)

(3)

Cost accounted for as follows:

Units transferred out

(1,700 × $61.00)

$103,700

$44,200

$59,500

Work in process, ending

32,000

Material (800 × $26.00)

20,800

Conversion (320 × $35.00)

11,200

Total costs

$135,700

$65,000

$70,700

(b)

SARKU COMPANY

Bicycle Department

Production Cost Report

For the Month Ended May 31, 2016

Equivalent Units

Quantities

Physical

Units

Materials

Conversion

Costs

(Step 1)

(Step 2)

Units to be accounted for

Work in process, May 1

Started into production

Total units

Units accounted for

Transferred out

500

2,000

2,500

1,700

1,700

1,700

Work in process, May 31

800

800

320

(800 x 40%)

Total units

2.500

2,500

2,020

____________________________________________________________________________________________________________________

Solutions Manual © 2015 John Wiley & Sons Canada, Ltd.

Unauthorized copying, distribution, or transmission of this page is prohibited

4-83

Managerial Accounting: Tools for Business Decision-Making,

Fourth Canadian Edition

Weygandt, Kimmel, Kieso, Aly

PROBLEM 4-57B (Continued)

Costs

Materials

Conversion

Costs

Total

Unit costs (Step 3)

Costs in May

Equivalent units

Unit costs (a) ÷ (b)

Costs to be accounted for

Work in process, May 1

Started into production

Total costs

(a)

(b)

$65,000

2,500

$26.00

$70,700

2,202

$35.00

$135,700

$61.00

$

33,000

102,700

$135,700

Cost Reconciliation Schedule (Step 4)

Costs accounted for

Transferred out (1,700 × $61)

Work in process, May 31

Materials (800 × $26.00)

Conversion costs (320 × $35)

Total costs

$20,800

11,200

$103,700

32,000

$135,700

____________________________________________________________________________________________________________________

Solutions Manual © 2015 John Wiley & Sons Canada, Ltd.

Unauthorized copying, distribution, or transmission of this page is prohibited

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