Solution manual introduction managerial accounting 5e by garrison chapter 04 supplement

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Solution manual introduction managerial accounting 5e by garrison chapter 04 supplement

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To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter Supplement Process Costing Using the FIFO Method Solutions to Questions 4S-1 Under the FIFO method, the equivalent units of production include only the work of the current period The equivalent units of production in the beginning inventory are excluded In contrast, under the weighted-average method, the equivalent units of production include the equivalent units that were in beginning inventory as well as the equivalent units due to work in the current period 4S-2 Under the FIFO method, units transferred out are divided into two groups The first group consists of units from the beginning work in process inventory The second group consists of units started and completed during the period 4S-3 The FIFO method is superior to the weighted-average method from the standpoint of cost control because current performance should be measured in relation to costs of the current period only, and the weighted-average method mixes the costs of the current period with costs of the prior period Thus, under the weighted-average method, the manager’s performance is influenced to some extent by what happened in the prior period © The McGraw-Hill Companies, Inc., 2009 All rights reserved Solutions Manual, Chapter Supplement 181 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Brief Exercise 4S-1 (10 minutes) FIFO Method To complete beginning work in process: Materials: 30,000 units × (100% − 65%) Conversion: 30,000 units × (100% − 30%) Units started and completed during October* Ending work in process: Materials: 15,000 units × 80% complete Conversion: 15,000 units × 40% complete Equivalent units of production Materials Conversion 10,500 160,000 12,000 182,500 21,000 160,000 6,000 187,000 * 175,000 units started – 15,000 units in ending work in process = 160,000 units started and completed © The McGraw-Hill Companies, Inc., 2010 All rights reserved 182 Introduction to Managerial Accounting, 5th Edition To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Brief Exercise 4S-2 (10 minutes) FIFO method Cost added during May (a) Equivalent units of production (b) Cost per equivalent unit (a) ÷ (b) Cost per equivalent unit for materials Cost per equivalent unit for labor Cost per equivalent unit for overhead Total cost per equivalent unit Materials Labor Overhead $193,320 $62,000 $310,000 27,000 25,000 25,000 $7.16 $2.48 $12.40 $ 7.16 2.48 12.40 $22.04 © The McGraw-Hill Companies, Inc., 2010 All rights reserved Solutions Manual, Chapter Supplement 183 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Brief Exercise 4S-3 (15 minutes) Materials Conversion Ending work in process inventory: Equivalent units of production Cost per equivalent unit Cost of ending work in process inventory Units transferred out: Cost in beginning inventory 400 $2.32 $928 200 $0.75 $150 $1,078 $3,200 $650 $3,850 600 $2.32 1,200 $0.75 $1,392 $900 24,000 $2.32 24,000 $0.75 Cost to complete the units in beginning inventory: Equivalent units of production required to complete the beginning inventory Cost per equivalent unit Cost to complete the units in beginning inventory Cost of units started and completed this period: Units started and completed this period (26,000 units completed and transferred to the next department – 2,000 units in beginning work in process inventory) Cost per equivalent unit Cost of units started and completed this period Total cost of units transferred out Total $55,680 $2,292 $18,000 $73,680 $79,822 © The McGraw-Hill Companies, Inc., 2010 All rights reserved 184 Introduction to Managerial Accounting, 5th Edition To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Exercise 4S-4 (10 minutes) Mixing Department Cost Reconciliation Costs to be accounted for: Cost of beginning work in process inventory Costs added to production during the period Total cost to be accounted for $ 1,460 36,540 $38,000 Costs accounted for as follows: Cost of ending work in process inventory Cost of units completed and transferred out Total cost accounted for $ 3,120 34,880 * $38,000 *The cost of units completed and transferred out can be deduced as follows: Cost of beginning Costs added Cost of ending Cost of units work in process + to production = work in process + completed and inventory during the period inventory transferred out Cost of units $1,460 + $36,540 = $3,120 + completed and transferred out Cost of units completed and = $1,460 + $36,540 - $3,120 transferred out Cost of units completed and = $34,880 transferred out © The McGraw-Hill Companies, Inc., 2010 All rights reserved Solutions Manual, Chapter Supplement 185 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Exercise 4S-5 (10 minutes) To complete beginning work in process: Materials: 500 units x (100% – 80%) Conversion: 500 units x (100% – 40%) Units started and completed during the period (153,600 units started – 400 units in ending inventory) Ending work in process Materials: 400 units x 75% complete Conversion: 400 units x 20% complete Equivalent units of production Materials Conversion 100 153,200 300 153,600 300 153,200 80 153,580 © The McGraw-Hill Companies, Inc., 2010 All rights reserved 186 Introduction to Managerial Accounting, 5th Edition To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Exercise 4S-6 (20 minutes) FIFO Method To complete beginning work in process: Materials: 5,000 units × (100% − 80%) Labor: 5,000 units × (100% − 60%) Overhead: 5,000 units × (100% − 60%) Units started and completed during the period* Ending work in process: Materials: 8,000 units × 75% Labor: 8,000 units × 50% Overhead: 8,000 units × 50% Equivalent units of production Materials Labor Overhead 1,000 2,000 2,000 37,000 6,000 44,000 37,000 4,000 43,000 37,000 4,000 43,000 * 45,000 units started into production – 8,000 units in ending work in process = 37,000 started and completed Cost added during the period (a) Equivalent units of production (b) Cost per equivalent unit (a) ÷ (b) Materials Labor $52,800 $21,500 44,000 43,000 $1.20 $0.50 Overhead $32,250 43,000 $0.75 © The McGraw-Hill Companies, Inc., 2010 All rights reserved Solutions Manual, Chapter Supplement 187 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Exercise 4S-7 (15 minutes) FIFO Method Work in process, June Started into production during the month Total tons in process Deduct work in process, June 30 Completed and transferred out during the month To complete beginning work in process: Materials: 20,000 tons × (100% − 90%) Labor and overhead: 20,000 tons × (100% − 80%) Units started and completed during the month* Ending work in process: Materials: 30,000 tons × 60% complete Labor and overhead: 30,000 tons × 40% complete Equivalent units of production Tons of Pulp 20,000 190,000 210,000 30,000 180,000 Equivalent Units Labor and Materials Overhead 2,000 4,000 160,000 160,000 18,000 180,000 12,000 176,000 * 190,000 tons started into production – 30,000 tons in ending work in process = 160,000 tons started and completed © The McGraw-Hill Companies, Inc., 2010 All rights reserved 188 Introduction to Managerial Accounting, 5th Edition To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Exercise 4S-8 (45 minutes) FIFO Method Computation of the total cost per equivalent unit of production: Cost per equivalent unit of production for material Cost per equivalent unit of production for conversion Total cost per equivalent unit of production $25.40 18.20 $43.60 Computation of equivalent units in ending inventory: Units in ending inventory (a) Percentage completed (b) Equivalent units of production (a) × (b) Materials 300 70 % 210 Conversion 300 60 % 180 Computation of equivalent units required to complete the beginning inventory: Units in ending inventory (a) Percentage completed (b) Equivalent units of production (a) × (b) Materials 400 20 % 80 Units transferred to the next department Units from the beginning inventory Units started and completed during the period Conversion 400 60 % 240 3,100 400 2,700 © The McGraw-Hill Companies, Inc., 2010 All rights reserved Solutions Manual, Chapter Supplement 189 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Exercise 4S-8 (continued) Materials Conversion Ending work in process inventory: Equivalent units of production 210 180 Cost per equivalent unit $25.40 $18.20 Cost of ending work in process inventory $5,334 $3,276 Total $8,610 Units transferred out: Cost from the beginning work in process inventory $8,120 $2,920 $11,040 Cost to complete the units in beginning work in process inventory: Equivalent units of production required to complete the units in beginning inventory 80 240 Cost per equivalent unit $25.40 $18.20 Cost to complete the units in beginning inventory $2,032 $4,368 $6,400 Cost of units started and completed this period: Units started and completed this period 2,700 2,700 Cost per equivalent unit $25.40 $18.20 Cost of units started and completed this period $68,580 $49,140 $117,720 Total cost of units transferred out .$135,160 © The McGraw-Hill Companies, Inc., 2010 All rights reserved 190 Introduction to Managerial Accounting, 5th Edition To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Exercise 4S-9 (15 minutes) FIFO Method Labor & Materials Overhead To complete the beginning work in process: Materials: 20,000 pounds × (100% − 100%) Labor and overhead: 20,000 pounds × (100% − 30%) Pounds started and completed during July* 355,000 Ending work in process: Materials: 25,000 pounds × 100% complete 25,000 Labor and overhead: 25,000 pounds × 60% complete Equivalent units of production 380,000 14,000 355,000 15,000 384,000 * 380,000 pounds started – 25,000 pounds in ending work in process inventory = 355,000 pounds started and completed this month © The McGraw-Hill Companies, Inc., 2010 All rights reserved Solutions Manual, Chapter Supplement 191 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem 4S-10A (45 minutes) FIFO method Equivalent Units of Production To complete beginning work in process: Materials: 20,000 units x (100% − 100%) Conversion: 20,000 units x (100% − 75%) Units started and completed during the period (180,000 units started − 40,000 units in ending inventory) Ending work in process: Materials: 40,000 units x 100% complete Conversion: 40,000 units x 25% complete Equivalent units of production Cost per Equivalent Unit Cost added during the period (a) Equivalent units of production (b) Cost per equivalent unit (a) ÷ (b) Materials Conversion 140,000 40,000 180,000 5,000 140,000 10,000 155,000 Materials Conversion $334,800 180,000 $1.86 $238,700 155,000 $1.54 See the next page Cost Reconciliation Costs to be accounted for: Cost of beginning work in process inventory ($25,200 + $24,800) Costs added to production during the period ($334,800 + $238,700) Total cost to be accounted for Costs accounted for as follows: Cost of ending work in process inventory Costs of units transferred out Total cost accounted for $ 50,000 573,500 $623,500 $ 89,800 533,700 $623,500 © The McGraw-Hill Companies, Inc., 2010 All rights reserved 192 Introduction to Managerial Accounting, 5th Edition To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem 4S-10A (continued) Costs of Ending Work in Process Inventory and Units Transferred Out Ending work in process inventory: Equivalent units of production Cost per equivalent unit Cost of ending work in process inventory Materials Conversion 40,000 $1.86 $74,400 Units transferred out: Cost in beginning work in process inventory $25,200 Cost to complete the units in beginning work in process inventory: Equivalent units of production required to complete the beginning inventory Cost per equivalent unit $1.86 Cost to complete the units in beginning inventory $0 Cost of units started and completed this period: Units started and completed this period 140,000 Cost per equivalent unit $1.86 Cost of units started and completed this period $260,400 Cost of units transferred out Total 10,000 $1.54 $15,400 $89,800 $24,800 $50,000 5,000 $1.54 $7,700 $7,700 140,000 $1.54 $215,600 $476,000 $533,700 © The McGraw-Hill Companies, Inc., 2010 All rights reserved Solutions Manual, Chapter Supplement 193 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem 4S-11A (45 minutes) FIFO method Equivalent Units of Production To complete beginning work in process: Materials: 10,000 units x (100% − 100%) Conversion: 10,000 units x (100% − 30%) Units started and completed during the period (170,000 units started − 20,000 units in ending inventory) Ending work in process: Materials: 20,000 units x 100% complete Conversion: 20,000 units x 40% complete Equivalent units of production Cost per Equivalent Unit Cost added during the period (a) Equivalent units of production (b) Cost per equivalent unit (a) ÷ (b) Materials Conversion 150,000 20,000 170,000 7,000 150,000 8,000 165,000 Materials Conversion $139,400 170,000 $0.82 $244,200 165,000 $1.48 See the next page Cost Reconciliation Costs to be accounted for: Cost of beginning work in process inventory ($8,500 + $4,900) Costs added to production during the period ($139,400 + $244,200) Total cost to be accounted for Costs accounted for as follows: Cost of ending work in process inventory Costs of units transferred out Total cost accounted for $ 13,400 383,600 $397,000 $ 28,240 368,760 $397,000 © The McGraw-Hill Companies, Inc., 2010 All rights reserved 194 Introduction to Managerial Accounting, 5th Edition To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem 4S-11A (continued) Costs of Ending Work in Process Inventory and Units Transferred Out Ending work in process inventory: Equivalent units of production Cost per equivalent unit Cost of ending work in process inventory Materials Conversion 20,000 $0.82 $16,400 Units transferred out: Cost in beginning work in process inventory $8,500 Cost to complete the units in beginning work in process inventory: Equivalent units of production required to complete the beginning inventory Cost per equivalent unit $0.82 Cost to complete the units in beginning inventory $0 Cost of units started and completed this period: Units started and completed this period 150,000 Cost per equivalent unit $0.82 Cost of units started and completed this period $123,000 Cost of units transferred out Total 8,000 $1.48 $11,840 $28,240 $4,900 $13,400 7,000 $1.48 $10,360 $10,360 150,000 $1.48 $222,000 $345,000 $368,760 © The McGraw-Hill Companies, Inc., 2010 All rights reserved Solutions Manual, Chapter Supplement 195 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Analytical Thinking (60 minutes) To complete beginning work in process: Transferred in: 450 units × (100% − 100%) Materials: 450 units × (100% − 100%) Conversion: 450 units × (100% − 60%) Units started and completed during the period (1,950 units started − 600 units in ending inventory) Ending work in process: Transferred in: 600 units x 100% complete Materials: 600 units x 0% complete Conversion: 600 units x 35% complete Equivalent units of production Cost added during the period (a) Equivalent units of production (b) Cost per equivalent unit (a) ÷ (b) Transferred In 1,350 600 1,950 Transferred In $17,940 1,950 $9.20 Materials Conversion 1,350 1,350 180 1,350 210 1,740 Materials Conversion $6,210 1,350 $4.60 $13,920 1,740 $8.00 © The McGraw-Hill Companies, Inc., 2010 All rights reserved 196 Introduction to Managerial Accounting, 5th Edition To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Analytical Thinking (continued) Ending work in process inventory: Equivalent units of production Cost per equivalent unit Cost of ending work in process inventory Units transferred out: Cost in beginning work in process inventory Cost to complete units in beginning work in process inventory: Equivalent units of production required to complete the beginning inventory (see above) Cost per equivalent unit Cost to complete units in beginning inventory Cost of units started and completed this period: Units started and completed this period Cost per equivalent unit Cost of units started and completed this period Cost of units transferred out Transferred In Materials Conversion Total 600 $9.20 $5,520 $4.60 $0 210 $8.00 $1,680 $7,200 $4,068 $1,980 $2,160 $8,208 $9.20 $4.60 180 $8.00 $0 $0 $1,440 1,350 $9.20 1,350 $4.60 1,350 $8.00 $12,420 $6,210 $10,800 $1,440 $29,430 $39,078 The effects of the price increases will tend to show up more under the FIFO method The reason is that the FIFO method keeps the costs of the current period separate from the costs of prior periods Thus, under the FIFO method, management will be able to see the effect of price increases on unit costs without any distorting influence from what has happened in the past © The McGraw-Hill Companies, Inc., 2010 All rights reserved Solutions Manual, Chapter Supplement 197 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Analytical Thinking (continued) Under the weighted-average method, however, costs carried over from the prior period are averaged in with costs of the current period, which will tend to reduce somewhat the impact of increased materials prices on current period unit costs © The McGraw-Hill Companies, Inc., 2010 All rights reserved 198 Introduction to Managerial Accounting, 5th Edition ... McGraw-Hill Companies, Inc., 2010 All rights reserved 182 Introduction to Managerial Accounting, 5th Edition To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com... McGraw-Hill Companies, Inc., 2010 All rights reserved 184 Introduction to Managerial Accounting, 5th Edition To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com... McGraw-Hill Companies, Inc., 2010 All rights reserved 186 Introduction to Managerial Accounting, 5th Edition To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com

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