Solution manual accounting 25th edition warren chapter 20

CHAPTER 20
PROCESS COST SYSTEMS
DISCUSSION QUESTIONS
1.

a.

An assembly-type industry using mass production methods, such as TV assembly, would
use the process cost system because the products are somewhat standard and lose their
identities as individual items. In such industries, it is neither practical nor necessary to
identify output by jobs.

b.

A job order cost system would be used by a building contractor to accumulate the costs
for each individual building because the costs can be identified with each job without
great difficulty.

c.

A job order cost system is best suited for an automobile repair shop because costs can
be reasonably identified with each job.

d.

A process cost system would be best suited for a paper manufacturer because the
processes are continuous and the products are homogeneous.

e.

A job order cost system is best suited for a custom jewelry manufacturer because most of

the production consists of job orders, and costs can be reasonably identified with each job.

2.

Since all goods produced in a process cost system are identical units, it is not necessary to
classify production costs into job orders.

3.

In a process cost system, the direct labor and factory overhead applied are debited to the
work in process accounts of the individual production departments in which they occur. The
reason is that all products produced by the department are similar. Thus, there is no need to
charge these costs to individual jobs. For the process manufacturer, the direct materials and
the conversion costs are charged to the department and divided by the completed production
of the department to determine a cost per unit.

4.

The cost per equivalent unit is frequently determined separately for direct materials and
conversion costs because these two costs are frequently added at different rates in the
production process. For example, materials may be incurred entirely at the beginning of the
process, while conversion costs are typically incurred evenly throughout the process.

5.

The cost per equivalent unit is used to allocate direct materials and conversion costs between
completed and partially completed units.

6.

The transferred-in cost from Blending to Filling includes the materials costs, direct labor, and
applied factory overhead incurred to complete units in Blending.

7.

The most important purpose of the cost of production report is to assist in the control of
costs. This is accomplished by holding each department head responsible for the costs
incurred in the department.

8.

Cost of production reports can provide detailed data about the process. The reports can
provide information on the department by individual cost elements. This can enable
management to investigate problems and opportunities.

20-1
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CHAPTER 20

Process Cost Systems

DISCUSSION QUESTIONS (Continued)
9.

Yield is a measure of the materials usage efficiency of a process manufacturer. It is
determined by dividing the output volume of product by the input volume of product.
For example, if 950 tons of aluminum were rolled from 1,000 tons of ingot, then the yield
would be said to be 95%. Five percent of the ingot was scrapped during the rolling process.

10.

Just-in-time processing emphasizes combining process functions into manufacturing cells,
involving employees in process improvement efforts, eliminating wasteful activities, and
reducing the amount of work in process inventory required to fulfill production targets.


PRACTICE EXERCISES
PE 20–1A
Shipbuilding
Gasoline refining
Flour mill
Movie studio
Plastic manufacturing
Home construction

Job order
Process
Process
Job order
Process
Job order

PE 20–1B
Steel manufacturing
Business consulting
Web designer
Computer chip manufacturing
Candy making

Designer clothes manufacturing

Process
Job order
Job order
Process
Process
Job order

PE 20–2A
37,400 ounces started and completed (40,400 ounces completed – 3,000
ounces beginning WIP), or (38,000 ounces started – 600 ounces ending WIP)
PE 20–2B
7,500 tons started and completed (7,900 tons completed – 400 tons beginning
WIP), or (8,500 tons started – 1,000 tons ending WIP)


PE 20–3A

Percent
Total
Whole
Units

Inventory in process, beginning of period………………
Started and completed during the period………………
Transferred out of Filling (completed)…………………
Inventory in process, end of period………………………
Total units to be assigned costs…………………………

3,000
37,400*
40,400
600

Materials
Added In
Period

Equivalent
Units for
Materials

0%
100%

0
37,400

100%

37,400
600

41,000

38,000

* 40,400 – 3,000

PE 20–3B

Percent

Total
Whole
Units

Inventory in process, beginning of period………………
Started and completed during the period………………
Transferred out of Rolling (completed)…………………
Inventory in process, end of period………………………
Total units to be assigned costs…………………………
* 7,900 – 400

400
7,500*
7,900
1,000
8,900

Materials
Added In
Period

Equivalent
Units for
Materials

0%

100%

0
7,500

100%

7,500
1,000
8,500


CHAPTER 20

Process Cost Systems

PE 20–4A

Percent
Total
Whole
Units

Inventory in process, beginning of period………………
Started and completed during the period………………
Transferred out of Filling (completed)…………………
Inventory in process, end of period………………………
Total units to be assigned costs…………………………

Conversion Equivalent

Completed
Units for
in Period
Conversion

3,000
37,400*
40,400
600

40%
100%

1,200
37,400

25%

38,600
150

41,000

38,750

* 40,400 – 3,000

PE 20–4B

Percent

Total
Whole
Units

Inventory in process, beginning of period………………
Started and completed during the period………………
Transferred out of Rolling (completed)…………………
Inventory in process, end of period………………………
Total units to be assigned costs…………………………

Conversion Equivalent
Completed
Units for
in Period

400
7,500*
7,900
1,000

80%
100%

320
7,500

30%

7,820

300

8,900

* 7,900 – 400

PE 20–5A
Equivalent units of direct materials:

$13,300
38,000

= $0.35 per ounce

Equivalent units of conversion:

$3,100
38,750

= $0.08 per ounce

PE 20–5B
Equivalent units of direct materials:

$510,000
8,500

= $60 per ton

Equivalent units of conversion:

$81,200
8,120

= $10 per ton

Conversion

8,120


PE 20–6A

Direct
Materials
Costs

Conversion
Costs

Inventory in process, balance……………………………
0 +

Inventory in process, beginning of period……………

1,200 × $0.08

$ 1,200
96

37,400 × $0.08

$ 1,296
16,082

Cost of completed beginning work in process………
Started and completed during the period……………… 37,400 × $0.35 +

$17,378

Transferred out of Filling (completed)…………………
Inventory in process, end of period……………………

600 × $0.35 +

150 × $0.08

Inventory in process, ending……………………………

PE 20–6B

222
$17,600

Total costs assigned by the Filling Dept. ……………
Completed and transferred-out production…………

Total
Costs

$17,378
$222

Direct
Materials
Costs

Conversion
Costs

Total
Costs


Inventory in process, balance…………………………
Inventory in process, beginning of period……………

0 +

320 × $10

$ 25,000
3,200

Cost of completed beginning work in process………
Started and completed during the period……………

7,500 × $60 +

7,500 × $10

$ 28,200
525,000

Transferred out of Rolling (completed)………………
Inventory in process, end of period……………………

$553,200
1,000 × $60 +

300 × $10

63,000
$616,200

Total costs assigned by the Rolling Dept. ……………
Completed and transferred-out production…………

$553,200

Inventory in process, ending……………………………

$63,000


PE 20–7A
a.

Work in Process—Filling
Work in Process—Blending

Materials
Work in Process—Filling
Factory Overhead—Filling
Wages Payable
Finished Goods
Work in Process—Filling

b.

13,300
5,000
8,300
3,100
1,100
2,000
17,378
17,378

$222 ($1,200 + $13,300 + $3,100 – $17,378)

PE 20–7B
a.

Work in Process—Rolling
Work in Process—Casting

510,000

Work in Process—Rolling
Factory Overhead—Rolling

Wages Payable

81,200

Finished Goods
Work in Process—Rolling
b.

$63,000 ($25,000 + $510,000 + $81,200 – $553,200)

510,000

54,700
26,500
553,200
553,200


PE 20–8A
Energy cost per pound, June:

$14,875
42,500

= $0.35

Energy cost per pound, July:

$14,615
39,500

= $0.37

The cost of energy has increased by 2 cents per pound between June and
July, indicating inefficiency in the use of energy.

PE 20–8B
Material cost per ton, September:

$76,000
800

= $95

Material cost per ton, October:

$77,350
850

= $91

The cost of materials has decreased by $4 per ton between September and October,
indicating an improvement in the cost of materials.


Ex. 20–1
a.

b.

c.

d.

e.

Work in Process—Blending Department
Materials—Cocoa
Materials—Sugar
Materials—Dehydrated Milk

XXX

Work in Process—Molding Department
Work in Process—Blending Department

XXX

Work in Process—Packing Department
Work in Process—Molding Department

XXX

Finished Goods
Work in Process—Packing Department

XXX

Cost of Goods Sold
Finished Goods

XXX

XXX
XXX
XXX

XXX

XXX

XXX

XXX


CHAPTER 20

Process Cost Systems

Ex. 20–2

Materials

Factory Overhead—

Work in Process—

Smelting Dept.

Smelting Dept.

Factory Overhead—
Rolling Dept.

Work in Process—
Rolling Dept.

Finished Goods—

Factory Overhead—

Work in Process—

Finished Goods—

Converting Dept.

Converting Dept.

Sheared Sheet

Rolled Sheet

20-10
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Cost of Goods Sold

CHAPTER 20

Process Cost Systems

Ex. 20–3
a.

1.

2.

Work in Process—Refining Department
Materials

335,000

Work in Process—Refining Department
Wages Payable

127,000

335,000

127,000

Work in Process—Refining Department
Factory Overhead—Refining Department

3.

91,200
91,200

Work in Process—Sifting Department*
Work in Process—Refining Department

b.

555,600
555,600

* $26,800 + $335,000 + $127,000 + $91,200 – $24,400

Ex. 20–4
a.

Factory overhead rate:
$97,500 ÷ $75,000 = 130%
Work in Process—Blending Department
Factory Overhead—Blending Department
$6,300 × 130% = $8,190

b.

c.

$60 debit

d.

Underapplied factory overhead

8,190
8,190

($8,250 – $8,190)

Ex. 20–5
Equivalent Units
Whole
Units

Direct
Materials

Conversion

Inventory in process, beginning
840

(75% completed)

2

0

210

13,760

13,760

1

Started and completed

13,760

Transferred to Packing Department
Inventory in process, ending
(30% completed)

14,600

13,760

13,970

900

900

270

Total

15,500

14,660

14,240

1
2
3

3

840 units × (1 – 75%)
14,600 units – 840 units
900 units × 30%

20-11
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CHAPTER 20

Process Cost Systems

Ex. 20–6
a.

Drawing Department
Equivalent Units
Whole
Units

Direct
Materials

Conversion

Inventory in process, September 1
7,000

(40% completed)
Started and completed in September

78,000 2

78,000

78,000

Transferred to Winding Department in September
Inventory in process, September 30
(60% completed)

85,000

78,000

82,200

5,800

5,800

3,480

Total

90,800

83,800

85,680

1
2
3

b.

4,200 1

0

3

7,000 units × (1 – 40%)
85,000 units – 7,000 units
5,800 units × 60%

Winding Department
Equivalent Units
Whole
Units

Direct
Materials

Conversion

Inventory in process, September 1
3,200

(80% completed)
Started and completed in September

0

640

82,800

82,800

Transferred to finished goods in September
Inventory in process, September 30
(15% completed)

86,000

82,800

83,440

2,200

2,200

330

Total

88,200

85,000

83,770

1
2
3

82,800

2

3,200 units × (1 – 80%)
86,000 units – 3,200 units

2,200 units × 15%

Note: Of the 85,000 units transferred in from Drawing, 82,800 units were started and
completed in Winding and 2,200 units are in Winding ending work in process.

20-12

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1

3


Ex. 20–7
a.

Units in process, July 1……………………………………………………………
Units placed into production for July…………………………………………
Less units finished during July……………………………………………………
Units in process, July 31……………………………………………………………

8,000
162,000
(157,400)
12,600

Equivalent Units

b.

Direct
Materials

Whole
Units

Conversion

Inventory in process, July 1
8,000

(2/5 completed)
Started and completed in July

149,400

Transferred to finished goods in July
Inventory in process, July 31
(3/5 completed)

157,400

Total

170,000

1
2
3
4

12,600

2

3

1

0

4,800

149,400

149,400

149,400

154,200

12,600

7,560

162,000

161,760

4

8,000 units × (1 – 40%)
157,400 units – 8,000 units
8,000 units + 162,000 units – 157,400 units
12,600 units × 60%

20-13
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Ex. 20–8
a.

1.

$1.90 ($307,800 ÷ 162,000 units)

2.

$0.40 [($43,600 + $21,104) ÷ 161,760 units]

3.

$18,496, determined as follows:
Work in Process—Baking Department balance, July 1……………………
Conversion costs incurred during July
(4,800 equivalent units × $0.40)……………………………………………
Cost of beginning work in process completed during July………………

4.

$16,576
1,920
$18,496

$343,620 [($1.90 + $0.40) × 149,400 units]

Note to Instructors: The cost of the beginning work in process completed
during July, $18,496 (a. 3), plus the cost of the units started and completed
during July, $343,620 (a. 4), equals the cost of the units finished during July,
$362,116.

5.

$26,964, determined as follows:
Direct materials ($1.90 × 12,600 units)………………………………………
Conversion costs ($0.40 × 7,560 equivalent units)………………………
Cost of ending work in process………………………………………………

$23,940
3,024
$26,964

Note: The cost of the ending work in process is also the balance of Work in
Process—Baking Department as of July 31.
b.

The conversion costs in July decreased by $0.03 per equivalent unit,
determined as follows:
Work in Process—Baking Department balance, July 1………………………
Deduct direct materials cost incurred in June
($1.90 × 8,000 units, same cost per unit as July)………………………………
Conversion costs incurred in June
June conversion cost per equivalent unit
[$1,376 ÷ (8,000 units × 2/5)]…………………………………………………….
July conversion cost per equivalent unit…………………………………………
Less June conversion cost per equivalent unit…………………………………

Decrease in conversion cost per equivalent unit…………………………………

$16,576
15,200
$ 1,376

$ 0.43
$ 0.40
0.43
$(0.03)


Ex. 20–9
Equivalent units of production:
Conversion
Cereal

Boxes

Cost

(in pounds)

(in boxes)

(in boxes)

0
75,300

0
50,200

600
50,200

75,300
825

50,200
550

50,800
0

76,125

50,750

50,800

Inventory in process, March 1………………
Started and completed in March…………
Transferred to finished goods
in March………………………………………
Inventory in process, March 31……………
Total……………………………………………
Supporting explanation:

The whole unit inventory in process on March 1 includes both the cereal in the

hopper and the boxes in the carousel, and thus includes no equivalent units for
the material during the current period. The reason is because the costs for the
cereal and boxes were introduced to the Packing Department in February. Since
conversion costs are incurred only when the cereal is filled into boxes, all 600
boxes of the March 1 inventory in process will have conversion costs incurred
in March.
The product started and completed in March includes 50,200 boxes (50,800 boxes
completed less the 600 in the carousel on March 1). These boxes represent 75,300
pounds of cereal [50,200 × (24 oz. ÷ 16 oz.)], since there are 16 ounces to a pound.
The inventory in process on March 31 includes the remaining pounds of cereal in
the hopper and boxes in the carousel that are properly included in the equivalent
unit computation for March (since the costs were incurred in the department in
March). No conversion costs have been applied to these boxes, since they
remain unfilled.
Note to Instructors: An actual cereal-filling line begins with the empty box
carousel. The box carousel holds flattened boxes that are fed into a high-speed line
that opens the box up and places it on a conveyor. The conveyor brings the opened
box under a filler head. The cereal pours from the hopper through the filler head
into the open box (actually into the inner sealer bag). The box then moves down the
line to be boxed into a large shipping carton, which is then moved to the
warehouse.


Ex. 20–10
a.

Direct labor……………………………………………………………………………… $36,705
18,600
Factory overhead applied……………………………………………………………
Total conversion cost………………………………………………………………… $55,305

b.

Equivalent units of production for conversion costs:
Beginning inventory………………………………………………………………
Started and completed……………………………………………………………
Ending inventory (3/5 × 2,900 units)…………………………………………
Total equivalent units for conversion costs…………………………………

0
72,000
1,740
73,740

Conversion cost per equivalent unit:
= $0.75 conversion cost per equivalent unit
$55,305
73,740
c.

Equivalent units of production for direct materials costs:
Beginning inventory………………………………………………………………
Started and completed……………………………………………………………
Ending inventory (all units completed as to direct materials)……………
Total equivalent units for direct materials costs……………………………
Direct materials cost per equivalent unit:
= $2.70 direct materials cost per equivalent unit
$202,230
74,900

0
72,000
2,900
74,900


Ex. 20–11
a.

Units in process at beginning of period…………………………………………
Units placed in production during period………………………………………
Less units finished during period…………………………………………………
Units in process at end of period…………………………………………………

b.
Whole
Units

Inventory in process, beginning
(35% completed)
Started and completed
Transferred to finished goods
Inventory in process, ending
(45% completed)
Total units
1
2
3

640

Equivalent Units
Direct
Materials

Conversion

900
2
15,360
16,260

0
15,360
15,360

585
15,360
15,945

640
16,900

640
16,000

288
16,233

1

3

900 units × (1 – 35%)
16,260 units – 900 units
640 units × 45%

Costs

c.
Direct
Materials

Total costs for period in Assembly Department
Total equivalent units (from above)
Cost per equivalent unit
* $101,380 + $93,416
d.

900
16,000
(16,260)

$506,880 [($21.00 + $12.00) × 15,360 units]

$336,000
÷ 16,000
$ 21.00

Conversion

$194,796 *
÷ 16,233
$ 12.00


Ex. 20–12
a.

1.

$29,470; determined as follows:
Beginning work in process balance…………………………………………… $ 22,450
Conversion costs incurred during period
7,020
(585 equivalent units × $12.00)………………………………………………
Cost of beginning work in process completed during period…………… $ 29,470

2.

Cost of beginning work in process……………………………………………
Cost of units started and completed during period*………………………
Cost of units transferred to finished goods during period………………

$ 29,470
506,880
$536,350

* ($21.00 + $12.00) × 15,360 units
3.

$16,896; determined as follows:
Direct materials ($21.00 × 640 units)………………………………………… $ 13,440
3,456
Conversion costs ($12.00 × 288 equivalent units)…………………………
16,896
Cost of ending work in process inventory…………………………………… $
Note: The cost of the ending work in process is also the ending balance of
Work in Process—Assembly Department.

4.

$32.74 rounded ($29,470 ÷ 900 units)

b.

Yes. The production costs per unit increased during the current period. The
cost per unit of the units started and completed during the period is $33 ($21
+ $12). Since the cost per unit of the beginning work in process is
$32.74 [see part (4) above], the production costs during the current period
must have increased.

c.

The conversion cost in the current period increased by $0.73 per equivalent
unit, determined as follows:
Beginning work in process…………………………………………………………
Deduct direct materials cost incurred in prior period
($21.00 × 900 units, cost per unit unchanged)…………………………………
Conversion costs incurred in prior period………………………………………

$22,450

Current-period conversion cost per equivalent unit……………………………
Less prior-period conversion cost per equivalent unit
[$3,550 ÷ (900 units × $0.35)]………………………………………………………
Increase in conversion cost per equivalent unit during
current period…………………………………………………………………………

$12.00

18,900
$

3,550

11.27
$ 0.73


Ex. 20–13
1.

In computing the equivalent units for conversion costs applicable to the June 1
inventory, the 6,400 units are multiplied by 3/5 rather than 2/5, which is the
portion of the work completed in June. Therefore, the equivalent units should
be 2,560 (6,400 × 2/5) instead of 3,840.

2.

In computing the equivalent units for conversion costs for units started and
completed in June, the June 1 inventory of 6,400 units, rather than the June 30
inventory of 5,200 units, was subtracted from 55,000 units started in the
department during June. Therefore, the equivalent units started and completed
should be 49,800 instead of 48,600.

3.

The correct equivalent units for conversion costs should be 53,400, determined
as follows:
To process units in inventory on June 1:
6,400 × 2/5………………………………………………………………………………
2,560
To process units started and completed in June:
55,000 – 5,200………………………………………………………………………… 49,800
To process units in inventory on June 30:
1,040
5,200 × 1/5………………………………………………………………………………
53,400
Equivalent units of production………………………………………………………


CHAPTER 20

Process Cost Systems

Ex. 20–14
a.

8,600 units (1,200 + 8,300 – 900)

b.
Whole
Units

Inventory in process, November 1
(60% completed)
Started and completed in November
Transferred to finished goods in
November
Inventory in process, November 30
(70% completed)
Total units
1
2
3

Equivalent Units
Direct
Materials
Conversion

1,200
2
7,400
8,600

0
7,400
7,400

480
7,400
7,880

1

900
9,500

900
8,300

630
8,510

3

1,200 units × (1 – 60%)
8,600 units – 1,200 units
900 units × 70%

Costs
Direct
Materials

Total costs for November in Forging Department
Total equivalent units (from above)
Cost per equivalent unit
* $18,950 + $20,196

c.

$145,040 [7,400 units × ($15.00 + $4.60)]

$124,500
8,300
÷
$ 15.00

Conversion

÷

$39,146 *
8,510
$ 4.60


CHAPTER 20

Process Cost Systems

Ex. 20–15
a.

$23,064; determined as follows:
Beginning work in process balance………………………………………………… $ 20,856
Conversion costs incurred during November
2,208
(480 equivalent units × $4.60)………………………………………………………

$ 23,064
Cost of beginning work in process completed during November……………

b.

Cost of beginning work in process…………………………………………………
Cost of units started and completed during November*………………………
Cost of units transferred to finished goods during period……………………

$ 23,064
145,040
$168,104

* ($15.00 + $4.60) × 7,400 units
c.

$16,398; determined as follows:
Direct materials ($15.00 × 900 units)………………………………………………
Conversion costs ($4.60 × 630 equivalent units)…………………………………
Cost of ending work in process inventory…………………………………………

$ 13,500
2,898
$ 16,398

Note: The cost of the ending work in process is also the ending balance of the
Work in Process—Forging Department as of November 30.
d.

Direct materials cost per equivalent unit: $14.50 ($17,400 ÷ 1,200 units)

Conversion cost per equivalent unit: $4.80 ($3,456* ÷ 720 units**)
* Work in process, November 1…………………………………………………
Less direct materials cost………………………………………………………

$20,856
17,400

Conversion cost included in November 1, work in process………………

$ 3,456

** Equivalent units in November 1, work in process (1,200 × 60%) = 720 units
e.

Direct materials: Increase of $0.50 ($15.00 – $14.50)
Conversion: Decrease of $0.20 ($4.60 – $4.80)


Ex. 20–16
MORNING BREW COFFEE COMPANY
Cost of Production Report—Roasting Department
For the Month Ended August 31, 2014
Equivalent Units
UNITS

Whole

Direct

Units

Materials
(1)

Units charged to production:
Inventory in process, August 1
Received from materials storeroom

700
14,300

Total units accounted for by the
Roasting Department

15,000

Units to be assigned costs:
Inventory in process, August 1
(20% completed)
Started and completed in August
Transferred to finished goods in August
Inventory in process, August 31
(42% completed)
Total units to be assigned costs
1
2
3

700 units × (1 – 20%)
14,300 units – 400 units

400 units × 42%

Conversion
(1)

700
2
13,900

0
13,900

560 1
13,900

14,600

13,900

14,460

400
15,000

400
14,300

168 3
14,628

Ex. 20–16 (Concluded)
Costs
COSTS

Costs per equivalent unit:
Total costs for August in Roasting
Department
Total equivalent units
Cost per equivalent unit (2)

Direct
Materials

Conversion

$65,780
÷ 14,300
$ 4.60

$21,942
÷ 14,628
$ 1.50

Costs assigned to production:
Inventory in process, August 1
Costs incurred in August

$ 3,479
87,7221

Total costs accounted for by the
Roasting Department
Costs allocated to completed and
partially completed units:
Inventory in process, August 1 balance
To complete inventory in process,
August 1
Cost of completed August 1 work in
process
Started and completed in August
Transferred to finished goods in August (3)
Inventory in process, August 31 (4)

$91,201

$ 3,479
8402

840

63,9403

20,8504

$ 4,319
84,790

1,840 5

2526

$89,109
2,092

$

0

$

Total costs assigned by the Roasting
Department
1
2
3
4
5
6

b.

Total

$91,201

$65,780 + $21,942
560 units × $1.50
13,900 units × $4.60
13,900 units × $1.50

400 units × $4.60
168 units × $1.50

Materials:

From current period……………………………………………………
From beginning inventory……………………………………………
Decrease…………………………………………………………………

Conversion: From current period…………………………………………………
From beginning inventory……………………………………………
Increase…………………………………………………………………

$ 4.60
4.70
$(0.10)
$ 1.50
1.35
$ 0.15

The cost per equivalent unit of materials decreased by $0.10 per pound, and the cost
per equivalent unit of conversion cost increased by $0.15 per pound. Management
may wish to investigate the causes for the increase in the conversion cost.


Ex. 20–17
a.
KARACHI CARPET COMPANY
Cost of Production Report—Cutting Department
For the Month Ended January 31, 2014

Equivalent Units

Whole

Direct

UNITS

Units

Materials

Units charged to production:
Inventory in process, January 1
Received from Weaving Department

1,400
58,000

Total units accounted for by the
Cutting Department

59,400

Units to be assigned cost:
Inventory in process, January 1
(75% completed)
Started and completed in January

1,400

2
54,800

0
54,800

350
54,800

56,200

54,800

55,150

3,200
59,400

3,200
58,000

960
56,110

Transferred to finished goods in
January
Inventory in process, January 31
(30% completed)
Total units to be assigned cost
1

2
3

1,400 units × (1 – 75%)
58,000 units – 3,200 units
3,200 units × 30%

Conversion

1

3