EXERCISE 1 - Physical Flow of Units In each case below, fill in the missing amount.

Case #1 Work in Process, October 1 5,000 gallons

Units started during October ?

Units completed during October 15,000 gallons

Work in Process,October 31 2,000 gallons

Case #2 Work in Process,March 1 16,000 tons

Units started during March 3,500 tons

Units completed during March 14,400 tons

Work in Process, March 31 ?

Case #3 Work in Process, December 1 250,000 pounds

Units started during December 900,000 pounds

Units completed during December?

Work in Process, December 31 350,000 pounds

EXERCISE 2 - Cost per Equivalent Unit [LO 3] The balance in beginning Work in Process at Bing Rubber Company for direct labor was $140,000. During the month of March, an additional $700,000 of direct labor was incurred, and 30,000 pounds of rubber were produced. At the end of March, 10,000 pounds of rubber were in process and the units were 50 percent complete. At the start of March, the company had 6,000 pounds of rubber that were 40 percent complete.

Required - Calculate the cost per equivalent unit for labor assuming that labor is added uniformly throughout the production process.

EXERCISE 3 - Calculation of Equivalent Units [LO 2] McMillian Tire Company produces tires used on small trailers. The month of June ended with 500 tires in process, 90 percent complete as to direct materials, and 50 percent complete as to conversion costs;2,000 tires were transferred to finished goods during the month, and 2,400 were started during the month. The beginning Work in Process inventory was 60 percent complete as to direct materials and 40 percent complete as to conversion costs.

Required - Determine the denominators to be used in the calculations of cost per equivalent unit for materials and conversion costs.

EXERCISE 4 - Comprehensive Problem, One Department [LO 3, 4] Regal Polish manufactures a single product in one department and uses a process costing system. At the start of May, there were 10,000 units in process that were 100 percent complete with respect to direct material and 60 percent complete with respect to conversion costs (labor and overhead). During the month, the company began production of 105,000 units. Ending Work in Process Inventory consisted of 5,000 units that were 100 percent complete with respect to material and 70 percent complete with respect to conversion costs.

Cost Information Beginning Work in Process Costs Added in May

Direct material $4,000 $76,500

Direct labor 200 8,880

Manufacturing overhead 300 9,915

Total $4,500 $95,295

Required

a. Calculate the cost per equivalent unit for each of the three cost items and in total.

b. Calculate the cost of items completed in May and the cost of ending Work in Process.

c. Reconcile the sum of the two costs in part b to the sum of beginning Work in Process and costs added in May.

EXERCISE 5 - Production Cost Report [LO 2, 3, 4, 5] Aussie Yarn Co. is a U.S. producer of woolen yarn made from wool imported from Australia. Raw wool is processed, spun, and finished before being shipped out to knitting and weaving companies. Material is added in the beginning of processing, and conversion costs are added evenly throughout processing. Aussie began the month of August with 6,000 units in process that were 100 percent complete as to materials and 70 percent complete as to labor and overhead. It started 29,000 units into production during the month of August of which 5,000 remained in ending Work in Process inventory and were 50 percent complete as to conversion costs. The cost data are as follows:

Beginning work in process:

Direct materials $5,000

Direct labor 1,300

Manufacturing overhead 1,800

$8,100

Costs added during August:

Direct materials $26,500

Direct labor 12,350

Manufacturing overhead 14,450

$53,300

Required - Prepare a production cost report for the month of August.

EXERCISE 6 - Comprehensive Problem, Two Departments [LO 2, 3, 4, 5] Simply Shine Shampoo is manufactured in two departments: Mixing and Packing. Once the shampoo mixture is completed in the Mixing Department, it is sent to Packaging, where a machine fills and seals individual bottles, which are then passed to a machine that places the bottles in individual boxes. The following information is related to production in March:

Mixing Packing

Unit Information

Beginning Work in Process

(Mixing: 100% material, 90% conversion costs) 15,000

(Packing: 60% material, 50% conversion costs) 14,500

Started during March: 660,000 570,000

Ending Work in Process

(Mixing: 100% material, 70% conversion costs) 30,000

(Packing: 80% material, 60% conversion costs) 35,000

Cost Information, Beginning Work in Process

Direct material $ 8,500 $ 925

Direct labor 1,200 60

Manufacturing overhead 2,500 115

Transferred-in cost - 3,805

Cost Added during March

Direct material $254,750 $ 85,700

Direct labor 78,720 11,350

Manufacturing overhead 130,700 17,000

Transferred-in cost - 457,950

Required - Prepare production costs reports for Mixing and Packing for the month of March.