17-41 (30-35 min.) Weighted-average and standard-costing method.
1.
Solution Exhibit 17-41A computes the equivalent units of work done in November 2010
by Penelope’s Pearls Company for direct materials and conversion costs.
2. and 3.
Solution Exhibit 17-41B summarizes total costs of the Penelope’s Pearls
Company for November 30, 2012 and, using the standard cost per equivalent unit for direct
materials and conversion costs, assigns these costs to units completed and transferred out and to
units in ending work in process. The exhibit also summarizes the cost variances for direct
materials and conversion costs for November 2012.
SOLUTION EXHIBIT 17-41A
Steps 1 and 2: Summarize Output in Physical Units and Compute Output in Equivalent Units;
Standard Costing Method of Process Costing,
Penelope’s Pearls Company for the month ended November 30, 2012.
(Step 1)
Physical
Units
Flow of Production
Work in process, beginning (given)
Started during current period (given)
To account for
Completed and transferred out during current period:
From beginning work in process§
24,000 × (100% − 100%); 24,000 × (100% – 70%)
Started and completed
99,000 × 100%, 99,000 × 100%
Work in process, ending* (given)
25,400 × 100%; 25,400 × 50%
Accounted for
Equivalent units of work done in current period
24,000
124,400
148,400
(Step 2)
Equivalent Units
Direct
Conversion
Materials
Costs
(work done before current period)
24,000
0
7,200
99,000
99,000
25,400
12,700
_______
124,400
_______
118,900
99,000†
25,400
_______
148,400
§
Degree of completion in this department: direct materials, 100%; conversion costs, 70%.
†
123,000 physical units completed and transferred out minus 24,000 physical units completed and transferred out
from beginning work-in-process inventory.
*Degree of completion in this department: direct materials, 100%; conversion costs, 50%.
17-46