Weighted-average method, spoilage. World Class Steaks is a meat-processing firm based in Texas. It operates under the weighted-average method of
Required
For the prep department, summarize the total costs to account for and assign those costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in process. (Problem 18-37 explores additional facets of this problem.)
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Chapter 18 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Additional Business Textbook Solutions
Construction Accounting And Financial Management (4th Edition)
Horngren's Accounting (11th Edition)
Horngren's Financial & Managerial Accounting, The Financial Chapters (6th Edition)
Managerial Accounting (4th Edition)
Financial Accounting, Student Value Edition (4th Edition)
Horngren's Accounting (12th Edition)
- Mt. Palomar Manufacturing Co. uses a process cost system. Its manufacturing operation is carried on in two departments: Machining and Finishing. The Machining Department uses the weighted average cost method, and the Finishing Department uses the FIFO cost method. Materials are added in both departments at the beginning of operations, but the added materials do not increase the number of units being processed. Units are lost in the Machining Department throughout the production process, and inspection occurs at the end of the process. The lost units have no scrap value and are considered to be a normal loss. Production statistics for July show the following data: Required: Prepare a cost of production summary for each department. (Round unit costs to three decimal places.) Which department will have an easier time determining how its unit costs compare from month to month? Why?arrow_forwardBenson Pharmaceuticals uses a process-costing system to compute the unit costs of the over-the-counter cold remedies that it produces. It has three departments: mixing, encapsulating, and bottling. In mixing, the ingredients for the cold capsules are measured, sifted, and blended (with materials assumed to be uniformly added throughout the process). The mix is transferred out in gallon containers. The encapsulating department takes the powdered mix and places it in capsules (which are necessarily added at the beginning of the process). One gallon of powdered mix converts into 1,500 capsules. After the capsules are filled and polished, they are transferred to bottling, where they are placed in bottles that are then affixed with a safety seal, lid, and label. Each bottle receives 50 capsules. During March, the following results are available for the first two departments: Overhead in both departments is applied as a percentage of direct labor costs. In the mixing department, overhead is 200% of direct labor. In the encapsulating department, the overhead rate is 150% of direct labor. Required: 1. Prepare a production report for the mixing department using the weighted average method. Follow the five steps outlined in the chapter. (Note: Round to two decimal places for the unit cost.) 2. Prepare a production report for the encapsulating department using the weighted average method. Follow the five steps outlined in the chapter. (Note: Round to four decimal places for the unit cost.) 3. CONCEPTUAL CONNECTION Explain why the weighted average method is easier to use than FIFO. Explain when weighted average will give about the same results as FIFO.arrow_forwardHealthway uses a process-costing system to compute the unit costs of the minerals that it produces. It has three departments: Mixing, Tableting, and Bottling. In Mixing, at the beginning of the process all materials are added and the ingredients for the minerals are measured, sifted, and blended together. The mix is transferred out in gallon containers. The Tableting Department takes the powdered mix and places it in capsules. One gallon of powdered mix converts to 1,600 capsules. After the capsules are filled and polished, they are transferred to Bottling where they are placed in bottles, which are then affixed with a safety seal and a lid and labeled. Each bottle receives 50 capsules. During July, the following results are available for the first two departments (direct materials are added at the beginning in both departments): Overhead in both departments is applied as a percentage of direct labor costs. In the Mixing Department, overhead is 200 percent of direct labor. In the Tableting Department, the overhead rate is 150 percent of direct labor. Required: 1. Prepare a production report for the Mixing Department using the weighted average method. Follow the five steps outlined in the chapter. Round unit cost to three decimal places. 2. Prepare a production report for the Tableting Department. Materials are added at the beginning of the process. Follow the five steps outlined in the chapter. Round unit cost to four decimal places.arrow_forward
- PBB Company manufactures high end product. Because of the high volume of this type of product, the company employs a process cost system using the weighted average method to determine costs. Product Parts are manufactured in the Molding Department and transferred to the assembly Department were they are partially assembled. After assembly, the product is sent to packaging department. Cost per unit data for the high end product has been completed through the Molding department. Annual cost and production figures for the assembly Department are presented below: Production Data Beg. Inventory 50% Complete as to Assembly materials; 20% complete 3,000 as to Conversion units 45,000 Transferred In during the year units 40,000 Transferred to Packaging Department units 4,000 Ending Inventory 80% complete units Cost Data: Transferred-In Materials Conversion Current Period P 1,240,800 P 97,020 P 236,470 Work in Process, beginning 82,200 6,660 11,930 Damage product are identified on inspection…arrow_forward[The following information applies to the questions displayed below.] Victory Company uses weighted average process costing. The company has two production processes. Conversion cost is added evenly throughout each process. Direct materials are added at the beginning of the first process. Additional information for the first process follows. Beginning work in process inventory Units started this period Units completed and transferred out Ending work in process inventory. Beginning work in process inventory. Direct materials Conversion Costs added this period Direct materials Conversion Total costs to account for Cost per equivalent unit of production Units Total costs + Equivalent units of production (from part 1) Cost per equivalent unit of production 78,000 876,000 760,000 194,000 $ 496,080 87,640 3,319,920 1,665, 160 Direct Materials. Percent Complete 100% 100% 2. Compute cost per equivalent unit of production for both direct materials and conversion. Costs EUP $ 583,7: 4,985,0…arrow_forward[The following information applies to the questions displayed below.] Victory Company uses weighted average process costing. The company has two production processes. Conversion cost is added evenly throughout each process. Direct materials are added at the beginning of the first process. Additional information for the first process follows. Beginning work in process inventory Units started this period Units completed and transferred out Ending work in process inventory Beginning work in process inventory Direct materials Conversion Costs added this period Direct materials Conversion Total costs to account for Cost assignment-Weighted average Completed and transferred out Direct materials Conversion Ending work in process Direct materials Conversion Total costs accounted for Units EUP 78,000 876,000 760,000 194,000 $ 496,080 87,640 3,319,920 1,665, 160 Direct Materials. Percent Complete 100% 3. Assign costs to the department's output-specifically, to the units transferred out and to…arrow_forward
- Gladden Dock Company manufactures boat docks on an assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Finishing Department. This problem focuses on the Assembly Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. The firm uses FIFO method and the controller prepared the following (correct) equivalent unit calculation. Unitscompleted Physical Units Direct Materials Conversion WIP, beginning 70 0 52.5 Started and completed 30 30 30 WIP, ending 10 10 5 Totals 110 40 87.5 Cost per Equiv Unit $4,000 $16,000 Work in process, beginning inventory: Current Costs:Direct materials $140,000 Direct materials $ 160,000Conversion costs $260,000 Conversion…arrow_forwardJorcano Manufacturing Company, which uses a process cost system to account for the costs of its only product, Product D. Production begins in the fabrication department where units of raw material are molded into various connecting parts. After fabrication is complete, the units are transferred to the assembly department. There is no material added in the assembly department. After assembly is complete, the units are transferred to a packaging department where packing material is placed around the units. After the units are ready for shipping, they are sent to a shipping area. At year-end, June 30, the following inventory of Product D is on hand: No unused raw material or packing material. Fabrication department: 300 units, 1/3 complete as to raw material and 1/2 complete as to direct labor. Assembly department: 1,000 units , 2/5 complete as to direct labor. Packaging department: 100 units 3/4 complete as to packing material and 1/4 complete as to direct labor. Shipping area: 400 units…arrow_forwardChippity Inc. is a fast-growing manufacturer of computer chips. Direct materials are added at the start of the production process. Conversion costs are added evenly during the process. Some units of this product are spoiled as a result of defects not detectable before inspection of finished goods. Spoiled units are disposed of at zero net disposal value. Chippity uses the weighted-average method of process costing. Summary data for September are: (Click the icon to view the data.) Required 1. For each cost category, compute equivalent units. Show physical units in the first column of your schedule. 2. Summarize total costs to account for, calculate cost per equivalent unit for each cost category, and assign total costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in process. Requirement 1. For each cost category, calculate equivalent units. Show physical units in the first column of your schedule. Enter the…arrow_forward
- Caricolor Limited operates a paint manufacturing plant, housing two distinct departments: themixing department and the quality control department. The paint undergoes sequentialprocessing in both of these departments.The company's process-costing system is structured around two primary cost categories:direct materials and conversion costs. Direct materials are introduced at the initial stages ofthe process, while conversion costs are gradually incurred throughout the process. Aftercompletion of the mixing department's tasks on the paint, the product is promptly forwardedto the quality control department. Caricolor employs the weighted-average method forprocess costing to calculate its manufacturing costs.Data for the mixing department for October 2020 are as follows: Required: 1. Compute equivalent units in the mixing department, for each cost category? 2. Summarize total mixing department costs for October 2020 for each cost category, and calculate the cost per equivalent unit?arrow_forwardWeighted-average method. Hoffman Company manufactures car seats in its Boise plant. Each car seat passes through the assembly department and the testing department. This problem focuses on the assembly department. The process-costing system at Hoffman Company has a single direct-cost category (direct materials) and a single indirect-cost category (conversion materials are added at the costs). Direct beginning of the process. Conversion costs are added evenly during the process. When the assembly department finishes work on each car seat, it is immediately transferred to testing. Hoffman Company uses the weighted-average method of process costing. Data for the assembly department for October 2019 are as follows: Physical Units (Car Seats) Direct Materials Conversion Costs Work in process, October 1ª 4,000 $1,248,000 $ 241,650 Started during October 2019 22,500 Completed during October 2019 26,000 Work in process, October 31b 500 Total costs added during October $4,635,000 $2,575,125…arrow_forwardChipville Inc. is a fast-growing manufacturer of computer chips. Direct materials are added at the start of the production process. Conversion costs are added evenly during the process. Some units of this product are spoiled as a result of defects not detectable before inspection of finished goods. Spoiled units are disposed of at zero net disposal value. Chipville uses the weighted-average method of process costing. Summary data for September are: (Click the icon to view the data.) Required 1. For each cost category, compute equivalent units. Show physical units in the first column of your schedule. 2. Summarize total costs to account for, calculate cost per equivalent unit for each cost category, and assign total costs to units completed and transferred out (including normal spoilage), to abnormal spoilage, and to units in ending work in process. Materials Costs incurred to date Divide by: Equivalent units of work done to date Cost per equivalent unit for work done to date Finally,…arrow_forward
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