PROBLEM 4–15
Brady Products manufactures a silicone paste wax that goes through three processing departments—
Cracking, Blending, and Packing. All raw materials are introduced at the start of work in the Cracking
Department. The Work in Process T-account for the Cracking Department for a recent month is
given below:
Work in Process—Cracking Department
Inventory, May 1 63,700 Completed and transferred
Materials 397,600 to the Blending Department ?
Conversion 187,600
Inventory, May 31 ?
The May 1 work in process inventory consisted of 35,000 pounds with $43,400 in materials cost
and $20,300 in conversion cost. The May 1 work in process inventory was 100% complete with
respect to materials and 80% complete with respect to conversion. During May, 280,000 pounds
were started into production. The May 31 inventory consisted of 45,000 pounds that were 100%
complete with respect to materials and 60% complete with respect to conversion. The company
uses the weighted-average method to account for units and costs
Required:
1. Determine the equivalent units of production for May.
2. Determine the costs per equivalent unit for May.
3. Determine the cost of the units completed and transferred to the Blending Department during
May.
PROBLEM 4–17 Comprehensive Problem; Second Production Department—Weighted-Average
Method [LO2, LO3, LO4, LO5]
Bohemian Links Inc. produces sausages in three production departments—Mixing, Casing and
Curing, and Packaging. In the Mixing Department, meats are prepared and ground and then mixed
with spices. The spiced meat mixture is then transferred to the Casing and Curing Department,
where the mixture is force-fed into casings and then hung and cured in climate-controlled smoking
chambers. In the Packaging Department, the cured sausages are sorted, packed, and labeled. The company uses the weighted-average method in its process costing system. Data for April for the
Casing and Curing Department follow:
Percent Completed
Units Mixing Materials Conversion
Work in process inventory, April 1 . . . . . . . . . 1 100% 60% 50%
Work in process inventory, April 30 . . . . . . . . 1 100% 20% 10%
Mixing Materials Conversion
Work in process inventory, April 1 . . . . . . . . . $1,640 $26 $105
Cost added during April . . . . . . . . . . . . . . . . $94,740 $8,402
Mixing cost represents the costs of the spiced meat mixture transferred in from the Mixing Department.
The spiced meat mixture is processed in the Casing and Curing Department in batches; each
unit in the above table is a batch, and one batch of spiced meat mixture produces a set amount of
sausages that are passed on to the Packaging Department. During April, 60 batches (i.e., units)
were completed and transferred to the Packaging Department.
Required:
1. Determine the equivalent units for April for mixing, materials, and conversion. Do not round
off your computations.
2. Compute the costs per equivalent unit for April for mixing, materials, and conversion.
3. Determine the total cost of ending work in process inventory and the total cost of units transferred
to the Packaging Department in April.
4, Prepare a cost reconciliation report for the Casing and Curing Department for April.
CASE 4–20 Second Department—Weighted-Average Method [LO2, LO3, LO4]
Durall Company manufactures a plastic gasket that is used in automobile engines. The gaskets go
through three processing departments: Mixing, Forming, and Stamping. The company’s accountant
(who is very inexperienced) has prepared a summary of production and costs for the Forming
Department for October as follows:
Forming Department costs:
Work in process inventory, October 1, 8,000 units:
materials 100% complete; conversion 7?8 complete . . . . . . . . $ 22,420*
Costs transferred in from the Mixing Department . . . . . . . . . . . 81,480
Material added during October (added when processing
is 50% complete in the Forming Department) . . . . . . . . . . . . 27,600
Conversion costs added during October . . . . . . . . . . . . . . . . . . 96,900
Total departmental costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $228,400
Forming Department costs assigned to:
Units completed and transferred to the Stamping
Department, 100,000 units at $2.284 each . . . . . . . . . . . . . . $228,400
Work in process inventory, October 31, 5,000 units:
conversion 2?5 complete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Total departmental costs assigned . . . . . . . . . . . . . . . . . . . . . . . . $228,400
*Consists of cost transferred in, $8,820; materials cost, $3,400; and conversion costs,
$10,200.
After mulling over the data above, Durall’s president commented, “I can’t understand what’s
happening here. Despite a concentrated effort at cost reduction, our unit cost actually went up in
the Forming Department last month. With that kind of performance, year-end bonuses are out of
the question for the people in that department.”
The company uses the weighted-average method in its process costing.
Required:
1. Prepare a report for the Forming Department for October showing how much cost should have
been assigned to the units completed and transferred to the Stamping Department and to the
ending work in process inventory.
2. Explain to the president why the unit cost appearing on the report prepared by the accountant
