Question

EXERCISE 18.11 The following information pertains to May activity in Accessory World’s Coating Department:

Cost data:
Total cost of beginning inventory on May 1 . . . . . . . . . . . . . . . . . . . . . . . . . $45,300
Direct materials costs incurred in May. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,925
Conversion costs incurred in May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,525
Cut sets transferred in during May. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ?
Physical units data:
Units in process, May 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000 sets
Units started in May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ? sets
Units in process, May 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000 sets
Percentage of completion data:
Direct materials, May 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60%
Conversion, May 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Cut sets transferred in, May 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ?
Direct materials, May 31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70%
Conversion, May 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Cut sets transferred in, May 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ?

Compute how many cut mat sets were started in the Coating Department during May.
b. Prepare a schedule showing: (1) the number of mat sets transferred out of the Coating Department
in May, and (2) the number of mat sets started and completed by the Coating Department
in May.
c. Compute the equivalent units of input resources for the Coating Department in May.
d. Compute the cost per equivalent unit of input resource for the Coating Department in May.
e. Prepare the summary journal entry required to transfer the cost of finished mat sets from the
Coating Department’s Work in Process Inventory to the company’s Finished Goods Inventory in
May.
f. Compute the total cost assigned to the Coating Department’s ending inventory in process on
May 31.

Answer 1

FIFO method
Beggining units	6000	Transferred out	45,000
Started into production	48000	Ending units	9,000
	54000		54000
Equivalent units	Material	Conversion	Transferred in
Beginning units	6000	6000	6000
Completion in current period	40%	20%	0%
A	2400	1200	0
Units started and completed	39000	39000	39,000
Completion	100%	100%	100%
B	39000	39000	39000
Ending Units	9,000	9,000	9,000
Completion	70%	90%	100%
C	6300	8100	9000
Total units A+B+C	47700	48300	48000
Per unit cost	Cost	Total units	Per unit cost
Material cost	11925	47700	0.25
Conversion cost	84525	48300	1.75
transferred in	288000	48000	6.00
	384450		8.00

Cost of goods sold	Material	convertion cost	transferred in
Beginning inventory completed
Completion	40%	20%	0%
Per unit cost	0.25	1.75	6.00
Units	6000	6000	6000
Total cost   A	600.00	2100	0	2700
Units started and completed
Completion	100%	100%	100%
Per unit cost	0.25	1.75	6.00
Units	39000	39000	39000
Total cost    B	9750.00	68250	234000	312000
Beginning work in progress C	0	0	0	45300
Total cost A+B+C	10350	70350	234000	360000
Ending work in progress
Completion	70%	90%	100%
Per unit cost	0.25	1.75	6.00
Units	9,000	9,000	9,000
Total cost	1575	14175	54000	69750