EXERCISE 21

LO.3, LO.4 & LO.7 (WA & FIFO EUP) CleanSweep producesoutdoor brooms. On April 30, 2008, the firm had 7,200 units inprocess that were 60 percent complete as the material, 40 percentcomplete as to direct labor, and 20 percent complete as tooverhead. During May, 374,000 brooms were started. Records indicatethat 368,400 units were transferred to Finished Goods Inventory inMay. Ending units in process were 70 percent complete as tomaterial, 25 percent complete as to direct labor, and 10 percentcomplete as to overhead.

a. Calculate the physicalunits to account for in May.

b. How many units werestarted and completed during May

c. Determine Mays EUPfor each category using the weighted average method.

d. Determine Mays EUP foreach category using the FIFO method.

e. Reconcile your answers topart (c) and (d)

EXERCISE 44

LO.3 (WA cost of production report; journal entries) BangorProducts manufactures electronic language translators. Analysis ofbeginning Work in Process Inventory for July 2008 revealed thefollowing:

800Units PercentComplete Costs Incurred

Direct material 45 $ 6,748

Directlabor 65 8,680

Overhead 40 5,710

Total beginninginventory $21,138

Direct labor costs were extremely high during June, because thecompany had a labor strike and paid a high premium to getproduction workers that month.

During July, Bangor Products started production ofanother 11,400 translators and incurred $259,012 for material,$58,200 for direct labor, and $188,210 for overhead. At the end ofJuly, the company had 400 units in process (70 percent complete asto material, 90 percent complete as to direct labor, and 80 percentcomplete as to overhead).

a. Prepare a cost ofproduction report for July using the weighted average method.

b. Journalize the Julytransactions.

c. Prepare T-accounts torepresent the flow of costs for Bangor Products for July. Use XXXwhere amounts are unknown and identify what each unknown amountrepresents.

EXERCISE 47

LO.4 (FIFO cost of production report) Use the information fromproblem 44 for Bangor Products.

a. Prepare a cost ofproduction report for July using the FIFO method.

b. In general, what differencesexist between the WA and FIFO methods of process costing and why dothese differences exist?