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Answers to Tutorial 4: Process Costing
Question 1. Equivalent units, zero beginning inventory.
1. Direct materials cost per unit ($750,000 ÷ 10,000) $ 75

Conversion cost per unit ($798,000 ÷ 10,000) 79.8
Assembly Department cost per unit $154.8
2a. Steps 1 and 2: Summarize Output in Physical Units and Compute Output in Equivalent Units;
(Step 2)
(Step 1) Equivalent Units
Physical Direct Conversion
Flow of Production Units Materials Costs
Work in process, beginning (given) 0
Started during current period (given) 10,000
To account for 10,000
Completed and transferred out
during current period 9,000 9,000 9,000
Work in process, ending* (given) 1,000
1,000  100%; 1,000  50% 1,000 500
Accounted for 10,000
Work done in current period only 10,000 9,500
*Degree of completion in this department: direct materials, 100%; conversion costs, 50%.
Compute Equivalent Unit Costs,
Total
Production Direct Conversion
Costs Materials Costs
(Step 3)Costs added during February $1,548,000 $750,000 $798,000
Divide by equivalent units of work done
in current period (Solution Exhibit 17-l6A)  10,000  9,500
Cost per equivalent unit $ 75 $ 84
2b. Direct materials cost per unit $ 75

Conversion cost per unit 84
Assembly Department cost per unit $159
3. The difference in the Assembly Department cost per unit calculated in requirements 1 and 2
arises because the costs incurred in January and February are the same but fewer equivalent units of
work are done in February relative to January. In January, all 10,000 units introduced are fully
completed resulting in 10,000 equivalent units of work done with respect to direct materials and
conversion costs. In February, of the 10,000 units introduced, 10,000 equivalent units of work is done
with respect to direct materials but only 9,500 equivalent units of work is done with respect to
conversion costs. The Assembly Department cost per unit is, therefore, higher.
Question 2. Zero beginning inventory, materials introduced in middle of process
Steps 1 and 2: Summarize Output in Physical Units and Compute Output in Equivalent Units;
Mixing Department of Roary Chemicals for July 2012.
Steps 3, 4, and 5: Summarize Total Costs to Account For, Compute Cost per Equivalent Unit,
and Assign Total Costs to Units Completed and to Units in Ending Work in Process;
Mixing Department of Roary Chemicals for July 2012.
Question 3. Weighted-average method, equivalent units
Steps 1 and 2: Summarize Output in Physical Units and Compute Output in Equivalent Units;
Weighted-Average Method of Process Costing, Fenton Watches for May 2011.
(Step 2)
(Step 1) Equivalent Units
Physical Direct Conversion
Flow of Production Units Materials Costs
Work in process beginning (given) 80
Started during current period (given) 500
To account for 580
Completed and transferred out during current period 460 460 460
Work in process, ending* (1260%; 1230%) (given) 120 72 36
Accounted for 580 _____ _____
Work done to date 532 496
*Degree of completion in this department: direct materials - 60%; conversion costs - 30%.
Steps 3, 4, and 5: Compute Cost per Equivalent Unit, Summarize Total Costs to Account For, and
Assign Total Costs to Units Completed and to Units in Ending Work in Process;
Weighted-Average Method of Process Costing, Fenton Watches for May 2011.
Total
Production Direct Conversion
Costs Materials Costs
(Step 3) Work in process, beginning (given) $ 584,400 $ 493,360 $ 91,040
Costs added in current period (given) 4,612,000 3,220,0 00 1,392,000
Costs incurred to date $3,713,300 $1,483,040
Divide by equivalent units of work done
to date (Solution Step 2)  532  496
(Step 4) Cost per equivalent unit of work done to $ 6,98 0 $ 2,990
date
Total costs to account for $5,196,400
(Step 5) Assignment of costs:
Completed and transferred out (460 4,586,200 (460* $6,980) + (460*  $2,990)
units)
Work in process, ending (120 units) 610,200 (72† $6,980) + (36†  $2,990)
Total costs accounted for $5,196,400
*
Equivalent units completed and transferred out from Solution Step 2.
†
Equivalent units in work in process, ending from Solution Step 2.
Question 4. Process costing with beginning and ending work in process (Home task).
To be revised before Final exam

Question 5. Process costing with beginning and ending work in process, Transferred-in costs,
Weighted-average method
Solution “Steps 1-2” computes the equivalent units of work done to date in the Binding
Department for transferred-in costs, direct materials, and conversion costs. Solution “Steps 3-5”
summarizes total Binding Department costs for April 2012, calculates the cost per equivalent unit of
work done to date in the Binding Department for transferred-in costs, direct materials, and conversion
costs, and assigns these costs to units completed and transferred out and to units in ending work in
process using the weighted-average method.
Solution “Steps 1-2”.
Solution “Steps 3-5”.

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Answers to Tutorial 4: Process Costing

Question 1. Equivalent units, zero beginning inventory.

1. Direct materials cost per unit ($750,000 ÷ 10,000) $ 75

2b. Direct materials cost per unit $ 75

To be revised before Final exam

Solution “Steps 1-2”.

Solution “Steps 3-5”.

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