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Problems: Set C
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Problems: Set C

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P3-1C Ignatenko Corporation manufactures water skis through two processes: Molding
and Packaging. In the Molding Department fiberglass is heated and shaped into the form
of a ski. In the Packaging Department, the skis are placed in cartons and sent to the finished goods warehouse. Materials are entered at the beginning of both processes. Labor
and manufacturing overhead are incurred uniformly throughout each process. Production
and cost data for the Molding Department for January 2011 are presented below.
Production Data

Complete four steps
necessary to prepare a
production cost report.

(SO 5, 6, 7)

January

Beginning work in process units
Units started into production
Ending work in process units
Percent complete—ending inventory

–0–
45,000
5,000
40%

Cost Data
Materials
Labor
Overhead

$501,750
95,700
150,000

Total

$747,450

Instructions
(a) Compute the physical units of production.
(b) Determine the equivalent units of production for materials and conversion costs.
(c) Compute the unit costs of production.
(d) Determine the costs to be assigned to the units transferred out and in process.

(e) Prepare a production cost report for the Molding Department for the month of January.
P3-2C Sierra Corporation manufactures in separate processes refrigerators and freezers for homes. In each process, materials are entered at the beginning and conversion
costs are incurred uniformly. Production and cost data for the first process in making
two products in two different manufacturing plants are as follows.
Stamping Department
Production Data—June

Plant A
R12 Refrigerators

Plant B
F24 Freezers

Work in process units, June 1
Units started into production
Work in process units, June 30
Work in process percent complete

–0–
21,000
5,000
80

–0–
20,000
2,000
50

Cost Data—June
Work in process, June 1

Materials
Labor
Overhead
Total

$

–0–
840,000
220,000
420,000

$1,480,000

$

–0–
720,000
221,000
292,000

$1,233,000

Instructions
(a) For each plant:
(1) Compute the physical units of production.
(2) Compute equivalent units of production for materials and for conversion costs.
(3) Determine the unit costs of production.
(4) Show the assignment of costs to units transferred out and in process.
(b) Prepare the production cost report for Plant A for June 2011.

P3-3C Forrest Company manufactures a nutrient, Everlife, through two manufacturing
processes: Blending and Packaging. All materials are entered at the beginning of each
process. On August 1, 2011, inventories consisted of Raw Materials $5,000, Work in

Journalize transactions.

(SO 3, 4)

1


2

chapter 3 Process Costing

Process—Blending $0, Work in Process—Packaging $3,945, and Finished Goods $7,500.
The beginning inventory for Packaging consisted of 500 units, two-fifths complete as to
conversion costs and fully complete as to materials. During August, 9,000 units were
started into production in Blending, and the following transactions were completed.
1.
2.
3.
4.
5.
6.

Purchased $25,000 of raw materials on account.
Issued raw materials for production: Blending $18,390 and Packaging $9,410.
Incurred labor costs of $23,770.
Used factory labor: Blending $13,230 and Packaging $10,540.

Incurred $41,500 of manufacturing overhead on account.
Applied manufacturing overhead at the rate of $20 per machine hour. Machine hours
were Blending 1,500 and Packaging 500.
7. Transferred 8,200 units from Blending to Packaging at a cost of $45,000.
8. Transferred 8,600 units from Packaging to Finished Goods at a cost of $68,500.
9. Sold goods costing $62,000 for $92,000 on account.
Instructions
Journalize the August transactions.
Assign costs and prepare
production cost report.

P3-4C Sieve Company has several processing departments. Costs charged to the
Assembly Department for October 2011 totaled $1,231,000 as follows.

(SO 5, 6, 7)
Work in process, October 1
Materials
Conversion costs

$34,000
20,000

Materials added
Labor
Overhead

$

54,000

1,006,000
63,000
108,000

Production records show that 25,000 units were in beginning work in process 40% complete
as to conversion cost, 375,000 units were started into production, and 30,000 units were in
ending work in process 40% complete as to conversion costs. Materials are entered at the
beginning of each process.
Instructions
(a) Determine the equivalent units of production and the unit production costs for the
Assembly Department.
(b) Determine the assignment of costs to goods transferred out and in process.
(c) Prepare a production cost report for the Assembly Department.
Determine equivalent units
and unit costs and assign
costs.

P3-5C Minerva Company manufactures bicycles and tricycles. For both products, materials are added at the beginning of the production process, and conversion costs are incurred uniformly. Production and cost data for the month of May 2011 are as follows.

(SO 5, 7)
Production Data—Bicycles

Units

Work in process units, May 1
Units started in production
Work in process units, May 31

1,000
1,500

800

Percent
Complete
80%
25%

Cost Data—Bicycles
Work in process, May 1
Materials
Conversion costs
Direct materials
Direct labor
Manufacturing overhead

$15,000
20,000

$ 35,000
50,000
29,320
45,680

Instructions
(a) Calculate the following.
(1) The equivalent units of production for materials and conversion.
(2) The unit costs of production for materials and conversion costs.


Problems: Set C

(3) The assignment of costs to units transferred out and in process at the end of the
accounting period.
(b) Prepare a production cost report for the month of May for the bicycles.
P3-6C Arlo Cleaner Company uses a weighted-average process costing system and
manufactures a single product—an all-purpose liquid cleaner. The manufacturing
activity for the month of March has just been completed. A partially completed production cost report for the month of March for the mixing and blending department is
shown below.

ARLO CLEANER COMPANY
Mixing and Blending Department
Production Cost Report
For the Month Ended March 31
Equivalent Units
QUANTITIES

Physical
Units

Materials

Conversion
Costs

Units to be accounted for
Work in process, March 1
(40% materials, 20%
conversion costs)
Started into production
Total units

15,000
85,000
100,000
90,000

?

?

10,000
100,000

?
?

?
?

Materials

Conversion
Costs

Total

Costs in March

$153,600

$82,800

$236,400

Equivalent units

?

?

Units accounted for
Transferred out
Work in process, March 31
(60% materials, 20%
conversion costs)
Total units accounted for
COSTS
Unit costs

Unit costs

$

?

ϩ

$

?

Costs to be accounted for
Work in process, March 1
Started into production
Total costs
Cost Reconciliation Schedule
Costs accounted for
Transferred out
Work in process, March 31
Materials
Conversion costs
Total costs

ϭ $

?

$ 8,100
228,300
$236,400

$
?
?

?

?
?

Instructions
(a) Prepare a schedule that shows how the equivalent units were computed so that you
can complete the “Quantities: Units accounted for” equivalent units section shown
in the production cost report above, and compute March unit costs.
(b) Complete the “Cost Reconciliation Schedule” part of the production cost report above.

Compute equivalent units
and complete production
cost report.

(SO 5, 7)

3


4

chapter 3 Process Costing

Determine equivalent units
and unit costs and assign
costs for processes; prepare
production cost report.

*P3-7C Bratt Company manufactures standard and premium bicycles. For both products, materials are added at the beginning of the production process, and conversion costs
are incurred uniformly. Bratt Company uses the FIFO method to compute equivalent
units. Production and cost data for the month of May are as follows.

(SO 8)
Production Data—Standard

Units

Work in process units, May 1
Units started into production
Work in process units, March 31

300
1,200
500

Cost Data—Standard

Units

Work in process, May 1
Direct materials
Direct labor
Manufacturing overhead
Production Data—Premium
Work in process units, May 1
Units started into production
Work in process units, May 31

Percent
Complete
70%
30%
Percent
Complete

$17,400
48,000
19,400
30,420
Units
100
900
200

Percent
Complete
75%
40%

Cost Data—Premium
Work in process, May 1
Direct materials
Direct labor
Manufacturing overhead

(a) Standard Bicycles
(1) Materials
(2) Materials
(3) Transferred out
WIP

1,200 E.U.
$40
$87,270

$27,950

$ 8,000
63,000
31,060
45,415

Instructions
(a) Calculate the following for both the standard and the premium bicycles.
(1) The equivalent units of production for materials and conversion.
(2) The unit costs of production for materials and conversion costs.
(3) The assignment of costs to units transferred out and in process at the end of the
accounting period.
(b) Prepare a production cost report for the month of March for the standard bicycles
only.