Problem 1 (ch 23)Victoria Falls Flour Mill Company started many years ago producing a single product. It has grown to produce many diverse consumer products ranging from foods to paper goods. Currently, the corporation is barely making a profit, and the price of its stock has languished. Division managers have traditionally been incentivized with stock options and awards. However, management is evaluating a new bonus plan based on segment profits within each division. Below are 20X4 facts about the Sugar Products Division, which generates 10% of overall corporate revenue. The Sugar Products Division has two key products - raw sugar and candy.Total sales of raw sugar and candy$ 45,750,000Traceable, controllable, sugar division fixed costs10,250,000Traceable, uncontrollable, sugar division fixed costs3,600,000Non-traceable, controllable, sugar division fixed costs1,500,000Non-traceable, uncontrollable, sugar division fixed costs1,750,000Variable selling, general, & administrative costs9,050,000Variable product costs21,700,000General corporate expenses for all divisions8,000,000Prepare a contribution income statement for the aggregated Sugar Division (one column). If the division manager is to be evaluated on controllable contribution margin, would the Sugar Division manager appear to be entitled to a bonus? &L&"Arial,Bold"&20 &R&"Myriad Web Pro,Bold"&20B-23.05 B-23.05 Worksheet 1 (ch 23)20X4 Divisional Report for Sugar ProductsContribution Income StatementSales$ 45,750,000Less: &L&"Myriad Web Pro,Bold"&12Name: Date: Section: &R&"Myriad Web Pro,Bold"&20B-23.05 B-23.05 Problem 2 (ch 23)Downhill Manufacturing produces snow skis in a two-step production process - cutting and laminating. The manufacturing center is supported by two service centers - a health clinic and a janitorial service. The following table reveals certain facts about each activity:Health clinicJanitorial serviceCutting departmentLaminating departmentEmployees241015Square footage1,20060012,0008,000Cost incurred$ 180,000$ 125,000$ 700,000$ 800,000(a)Using the direct method, allocate the service department costs to production. The clinic costs are to be allocated based on employees, and the janitorial costs are to be allocated based on the square footage.(b)Using the step method, allocate the service department costs to production. The clinic costs are to be allocated based on employees, and the janitorial costs are to be allocated based on the square footage. The first step will be to allocate clinic costs. The clinic employees maintain their space and do not rely upon the janitorial service. However, janitorial employees occasionally sustain an injury and utilize the clinic. B-23.08 Worksheet 2 (ch 23)(a)Health clinicJanitorial serviceCutting departmentLaminating departmentCost incurred$ 180,000$ 125,000$ 700,000$ 800,000Clinic allocation----Janitorial allocation----Total cost$ -$ -$ -$ -Clinic allocations:Jani.

1. Problem 1 (ch 23)Victoria Falls Flour Mill Company started
many years ago producing a single product. It has grown to
produce many diverse consumer products ranging from foods to
paper goods. Currently, the corporation is barely making a
profit, and the price of its stock has languished. Division
managers have traditionally been incentivized with stock
options and awards. However, management is evaluating a new
bonus plan based on segment profits within each division.
Below are 20X4 facts about the Sugar Products Division, which
generates 10% of overall corporate revenue. The Sugar
Products Division has two key products - raw sugar and
candy.Total sales of raw sugar and candy$
45,750,000Traceable, controllable, sugar division fixed
costs10,250,000Traceable, uncontrollable, sugar division fixed
costs3,600,000Non-traceable, controllable, sugar division fixed
costs1,500,000Non-traceable, uncontrollable, sugar division
fixed costs1,750,000Variable selling, general, & administrative
costs9,050,000Variable product costs21,700,000General
corporate expenses for all divisions8,000,000Prepare a
contribution income statement for the aggregated Sugar
Division (one column). If the division manager is to be
evaluated on controllable contribution margin, would the Sugar
Division manager appear to be entitled to a bonus?
&L&"Arial,Bold"&20 &R&"Myriad Web Pro,Bold"&20B-23.05
B-23.05
Worksheet 1 (ch 23)20X4 Divisional Report for Sugar
ProductsContribution Income StatementSales$
45,750,000Less:
&L&"Myriad Web Pro,Bold"&12Name:
Date: Section: &R&"Myriad Web
Pro,Bold"&20B-23.05
B-23.05
Problem 2 (ch 23)Downhill Manufacturing produces snow skis

2. in a two-step production process - cutting and laminating. The
manufacturing center is supported by two service centers - a
health clinic and a janitorial service. The following table
reveals certain facts about each activity:Health clinicJanitorial
serviceCutting departmentLaminating
departmentEmployees241015Square
footage1,20060012,0008,000Cost incurred$ 180,000$
125,000$ 700,000$ 800,000(a)Using the direct method,
allocate the service department costs to production. The clinic
costs are to be allocated based on employees, and the janitorial
costs are to be allocated based on the square footage.(b)Using
the step method, allocate the service department costs to
production. The clinic costs are to be allocated based on
employees, and the janitorial costs are to be allocated based on
the square footage. The first step will be to allocate clinic
costs. The clinic employees maintain their space and do not
rely upon the janitorial service. However, janitorial employees
occasionally sustain an injury and utilize the clinic.
B-23.08
Worksheet 2 (ch 23)(a)Health clinicJanitorial serviceCutting
departmentLaminating departmentCost incurred$ 180,000$
125,000$ 700,000$ 800,000Clinic allocation----Janitorial
allocation----Total cost$ -$ -$ -$ -Clinic
allocations:Janitorial allocations:(b)Health clinicJanitorial
serviceCutting departmentLaminating departmentCost incurred$
180,000$ 125,000$ 700,000$ 800,000Clinic allocation----
Janitorial allocation----Total cost$ -$ -$ -$ -Clinic
allocations:Janitorial allocations:
B-23.08
Problem 3 (ch 24)Pure Comfort manufactures and sells
mattresses with adjustable air chambers. Pure Comfort has been
producing and selling approximately 500,000 units per year.
Each units sells for $600, and there are no variable selling,
general, or administrative costs. The company has been
approached by a foreign supplier who wishes to provide the air
compressor component for $90 per unit. Total annual

3. manufacturing costs, including air compressors, is as
follows:Direct materials$ 50,000,000Direct
labor80,000,000Variable factory overhead16,000,000Fixed
factory overhead35,000,000If Pure Comfort outsources the air
compressor, it is expected that direct materials will be reduced
by 20%, direct labor by 30%, and variable factory overhead by
25%. There will be no reduction in fixed factory
overhead.(a)Should Pure Comfort outsource the air
compressor?(b)If outsourcing the air compressor will free up
capacity, and enable Pure Comfort to increase production and
sales to 600,000 units per year, would it make sense to
outsource?
B-24.02
Worksheet 3 (ch 24)(a)InternalOutsourceDirect materials$ -$
-Direct labor--Variable factory overhead--Fixed factory
overhead--Outsourced compressors--Total cost of each option$
-$ -(b)
B-24.02
Problem 4 (ch 24)Summit Paintball Supply manufactures
paintballs used by recreational gamers. The cost of producing a
box of 2,500 paintballs is as follows:Direct materials$
12.50Direct labor6.25Variable factory overhead18.75Fixed
factory overhead25.00Variable selling, general, and
administrative costs18.75Fixed selling, general, and
administrative costs4.00The fixed factory overhead and fixed
SG&A cost is allocated based on an assumption that the
business will produce 400,000 boxes of paintballs per year. The
company has capacity to produce 500,000 boxes without
impacting either category of fixed cost.(a)The market for
paintballs has become very competitive. Management has
requested to know the break-even price that can be charged for
a box of paintballs, assuming production and sale of 400,000
boxes.(b)Management has received a special order request for
100,000 boxes of "private label" paintballs. The order specifies
a per box price of $75. How will profitability be impacted if
the order is accepted?

4. B-24.03
Worksheet 4 (ch 24)(a)(b)
B-24.03
Problem 5 (ch 24)Air Mall produces a catalog that is placed in
airline seatbacks during international flights. Passengers
typically skim the catalog during flights and can buy selected
merchandise from flight attendants, duty and tax free, while
over international waters. Below is a report for a recent
period:TotalBeveragesJewelryElectronicsSales$ 2,600,000$
1,400,000$ 500,000$ 700,000Variable
expenses1,635,000980,000200,000455,000Contribution margin$
965,000$ 420,000$ 300,000$ 245,000Fixed
expenses900,000300,000300,000300,000Income (loss)$
65,000$ 120,000$ -$ (55,000)The fixed expense is the
amount paid for printing the catalog and paying the airline to
include the item in seatbacks. Management is evaluating
discontinuing the sale of electronics products. Fixed costs will
not change; however, jewelry sales are expected to increase by
30%.Determine if overall income will be improved if the sale of
electronics products is ceased.
B-24.04
Worksheet 5 (ch 24)TotalBeveragesJewelryElectronicsSales$ -
$ -$ -$ -Variable expenses----Contribution margin$ -$ -$
-$ -Fixed expenses----Income (loss)$ -$ -$ -$ -
B-24.04
Problem 1 (ch 21)Logan Township acquired its water system
from a private company on June 1. No receivables were
acquired with the purchase. Therefore, total accounts
receivable on June 1 had a zero balance.
Logan plans to bill customers in the month following the month
of sale, and 70% of the resulting billings will be collected
during the billing month. In the next following month, 90% of
the remaining balance should be collectable. The remaining
uncollectible amounts will relate to citizens who have moved

5. away. Such amounts are never expected to be collected and will
be written off.
Water sales during June are estimated at $3,000,000, and
expected to increase 30% in July. August sales will be 10% less
than July sales.(a)For each dollar of sales, how much is
expected to be collected?(b)Estimate the monthly cash
collections for June, July, August, and September.(c)As of the
end of August, how much will be the estimated amount of
receivables from which future cash flows are anticipated?
&L&"Arial,Bold"&12 &R&"Myriad Web Pro,Bold"&20B-21.02
B-21.02
Worksheet1 (ch
21)(a)(b)JuneJulyAugustSeptember(c)JuneJulyAugustTotal
Receivables
&L&"Myriad Web Pro,Bold"&12Name:
Date: Section: &R&"Myriad Web
Pro,Bold"&20B-21.02
B-21.02
Problem 2 (ch 21)Scalia Systems manufactures rugged handheld
computers for use in adverse working environments. Scalia
tries to maintain inventory at 40% of the following month's
expected unit sales. Scalia began the year with 8,000 units in
stock, based on the following unit sales projections prepared by
the sales
manager:January20,000February25,000March18,000April22,000
Prepare a schedule of planned unit production for January
through March.
B-21.03
Worksheet 2 (ch 21)Planned production in
units:JanuaryEstimated units sold
B-21.03
Accounting spreadsheets often involve column or row headings
that involve months (or days, etc.). If you type the first time
period in the sequence (e.g., January in this spreadsheet), and

6. then simply drag that cell across or down, it will automatically
enter the next logical month(s)/day(s) in the correct order.
Problem 3 (ch 21)Prepare a direct materials purchasing plan for
January, February, and March, based on the following facts:
Lana Gonzales owns a business that assembles ceiling fan units.
Each fan requires one motor system and four blades. Motors
cost $40 each, and blades are $3.50 each. Lana is able to
reliably obtain motors as needed, and does not maintain them in
inventory. However, blades are stocked in inventory sufficient
to produce 30% of the following month's expected production.
Planned production is as
follows:January10,000February12,000March15,000April11,000I
n accordance with the stocking plan, January's beginning
inventory included 12,000 blades.
B-21.04
Worksheet 3 (ch 21)Direct materials purchasing
plan:JanuaryFebruaryMarchScheduled
production10,00012,00015,000Raw materials needed:Motors (1
per unit)Fan blades needed
B-21.04
Problem 4 (ch 21)Nolan Johnson is CFO for a newly formed
furniture manufacturing company. Below is the anticipated
monthly production for the first year of operation, and beyond.
Nolan is interested in learning which of the first twelve months
will require cash outlays of more than $100,000 toward the
purchase of lumber. Each unit requires 20 board feet of lumber
at $5.80 per board foot. All lumber is purchased in the month
prior to its expected use. Lumber purchases are paid for 10% in
the month of purchase, 40% in the month following the month
of purchase, and 50% in the second month following the month
of
purchase.MonthUnitsJanuary0February800March500April1,200
May700June900July300August600September800October1,300N
ovember400December400January600Which months will require
cash outlays in excess of the $100,000 amount? Does the

7. production in any given month necessarily correspond to the
cash flow for that same month? What are the business
implications of your observation?
B-21.05
Worksheet 4 (ch 21)Anticipated cash payments:CASH
PAYMENTSUnitsPurchasing ActivityTotal Board Feet
(20 per unit)Total Cost of Lumber
($5.80 per foot)Paid in Month
(10%)Paid in Month Relating to Prior Month
(40%)Paid in Month Relating to Two Months Prior
(50%)TotalJanuary0February800March500April1,200May700Ju
ne900July300August600September800October1,300November4
00December400January600
B-21.05
Problem 5 ( ch 21)The chief financial officer for Cast In Stone
concrete products had previously established a line of credit
with a local bank that enables Cast In Stone to borrow 80% of
the company's inventory balance. The company currently has
1,000 units in stock, and is performing "on budget." The budget
anticipated that direct labor cost would be $15 per hour, and
factory overhead is applied to production based on $7.50 per
direct labor hour. Each unit requires 2.5 labor hours and 800
pounds of direct material. The direct material costs $0.10 per
pound.Determine the amount of credit available under the
borrowing agreement.
B-21.07
Worksheet 5 (ch 21)Amount available under line of
credit:UnitsPer Unit CostPer Unit
TotalTotal available under line of credit
B-21.07
Problem 6 (ch 21)Printers Plus is a retailer of printers and ink
cartridges. The printers carry a low profit margin and the ink
cartridges a very high margin. Following is an aggregated
budgeted performance plan for 20X5.Budgeted Performance
Report
All Stores

8. For the Year Ending December 31, 20X5SalesPrinters$
4,500,000Cartridges4,500,000Total sales$ 9,000,000Less:
Variable expensesPrinters$ 4,000,000Cartridges1,500,000Total
variable expenses$ 5,500,000Contribution margin$
3,500,000Traceable fixed costs1,550,000Location margin$
1,950,000Common fixed costs1,400,000Stores margin$
550,000Although total sales met expectations for the year,
management is upset that the targeted margins were not
achieved. Following is the "store by store" actual performance
report. Evaluate the detailed data and write a paragraph
explaining the loss. If each store has a positive margin, as
shown in the following report, why is management upset?Actual
Performance Report
All Stores
For the Year Ending December 31, 20X5Store AStore BStore
CSalesPrinters$ 2,000,000$ 2,500,000$
1,000,000Cartridges500,0002,000,0001,000,000Total sales$
2,500,000$ 4,500,000$ 2,000,000Less: Variable
expensesPrinters$ 1,777,778$ 2,222,222$
888,889Cartridges166,667666,667333,333Total variable
expenses$ 1,944,444$ 2,888,889$ 1,222,222Contribution
margin$ 555,556$ 1,611,111$ 777,778Traceable fixed
costs450,000600,000500,000Location margin$ 105,556$
1,011,111$ 277,778
B-22.03
Worksheet 6 ( ch 21)
B-22.03
Problem 1 (ch 17)Ashley Corporation provided the following
list of cost data related to its manufacturing operations for the
month of September 20X4.Beginning raw materials inventory$
966,400Raw materials purchased (net)2,345,500Ending raw
materials inventory818,200Direct labor costs322,300Indirect
materials125,500Indirect labor88,900Factory utilities and
maintenance456,000Factory depreciation56,600Other factory
related overhead24,400Beginning work in

9. process777,000Ending work in process717,000(a)Arrange the
cost data into a statement of cost of goods manufactured.(b)If
Ashley's cost of goods sold for the month was $4,000,000, how
much was the increase or decrease in finished goods inventory
for the month of September?
&R&"Myriad Web Pro,Bold"&20B-17.06
B-17.06
Worksheet 1 (ch 17)(a)ASHLEY CORPORATIONSCHEDULE
OF COST OF GOODS MANUFACTUREDFOR THE MONTH
ENDING SEPTEMBER 30, 20X4Direct materials:$ --$ --Raw
materials transferred to production$ -Direct labor-Factory
overhead$ ------Total manufacturing costs$ --$ --Cost of
goods manufactured$ -(b)
&L&"Myriad Web Pro,Bold"&12Name:
Date: Section: &R&"Myriad Web
Pro,Bold"&20B-17.06
B-17.06
Problem 2 (ch 18)Mel Cheek is a fishing guide on the Chenega
River. The fish are usually found 20 to 50 miles upriver. Once
the fish are located, Mel slows the boat to trolling speed and
fishes for about 6 hours before returning to dock. Mel has
noted that overall fuel costs vary based on "miles upriver" and
he is considering changing his guide fee to separately charge
customers for estimated fuel costs. Below is Mel's log for 15
typical days showing "miles upriver to locate fish" and "total
fuel cost".DayMiles UpriverFuel
Cost137$862419332273428805499962574733858378794493102
477112980124596133583143687153180Total516$1,273(a)Use
the high-low method to determine the "fixed fuel cost"
associated with the trolling time, and the "variable fuel cost"
associated with running up and down the river.(b)If the sole
objective of the fuel charge is to approximately recover actual
costs incurred each day, would "$2.50 per mile upriver" be a
fair formula? What alternative formula might you suggest?
B-18.03

10. Worksheet 2 (ch 18)(a)MILES RUNCOSTHIGHLOW(b)
B-18.03
Problem 3 (ch 18)Greg Morrison recently graduated from
mortuary school. He is considering opening his own funeral
home. A funeral home is a high-fixed cost business, as it
requires considerable expenditures for facilities, labor, and
equipment, no matter how many families are served. Assume
the annual fixed cost of operations is $800,000. Further assume
that the only significant variable cost relates to burial
containers like urns and caskets. An average casket costs
$1,200. Greg's banker has asked a variety of questions in
contemplation of providing a loan for this business.(a)If the
average family is charged $6,000 for services and a burial
container, how many families must be served to clear the break-
even point?(b)If the banker believes Greg will only serve 100
families during the first year in business, how much will the
business lose during its first year of operation?(c)If Greg
believes his profits will be at least $100,000 during the first
year, how much is he anticipating for total revenue?(d)The
banker has suggested that Greg can reduce his fixed costs by
$150,000 if he will not buy any vehicles. Greg can instead rent
vehicles as needed. The variable cost of renting is $700 per
family served. Will this suggestion help Greg reach the break-
even point sooner?
B-18.05
Worksheet 3 (ch 18)(a)Break-Even Point in Families
=(b)(c)Sales for a Target Income =(d)New Break-Even Point in
Families =
B-18.05
Problem 4 (ch 19)Ekpro Products manufactures containment
chambers for environmentally friendly incinerators. Each
chamber is built to customer specifications. Most of the direct
labor time is spent on welding activities. Following is the job
cost sheet for an incinerator manufactured for Benzate
Corporation:EkproJob Cost SheetJob:BenzateForm
ReferenceDirect LaborDirect MaterialApplied

11. OverheadTotalHoursRateTotalQtyCost Per
UnitTotalQtyRateTotalMay 8, 20X7Rod
BurnerDTS.05.08.X7.RB9$25$ 225$ 225Sandy
SharpDTS.05.08.X7.SS1$12$ 12$
12SteelMR.05.08.X7.RB10$ 80$ 800$ 800May 9,
20X7Sandy SharpDTS.05.09.X7.SS2$12$ 24$ 24Applied
Overhead??$ 360$ 360Totals12$ 261$ 800$ 360$
1,421(a)What types of costs do you imagine would be included
in factory overhead? If overhead is applied based on direct
labor hours, what is the application rate?(b)Ekpro is considering
installation of a robotic machine that will do all welding
operations. How might this decision impact the total overhead
and the application method?(c)How does the applied overhead
relate to the actual overhead? When they are not the same, what
happens to the difference? Why is actual overhead not assigned
to each job?
B-19.04
Worksheet 4 (ch 19)(a)(b)(c)
B-19.04
Problem 5 (ch 19)Cool Sun produces awnings and screens.
Prepare journal entries to reflect the following transactions.
After you complete the entries, determine the amount to include
in raw materials, work in process, and finished goods.Aug. 4,
20X5Purchased fabric and aluminum to be used in the
manufacturing process. The purchase price was $4,000, on
account.Aug. 8, 20X5Transferred 60% of the raw materials
purchased on August 4 into production.Aug. 8, 20X5Incurred
direct labor costs of $3,000. Factory overhead is applied at
40% of the direct labor cost.Aug. 9, 20X5Transferred completed
awnings with total assigned costs of $4,400 to finished
goods.Aug. 10, 20X5Sold and delivered half of the finished
goods (from August 9) to a customer for $4,000 cash.
B-19.06
Worksheet 5 (ch 19)GENERAL JOURNAL Page
1DateAccountsDebitCredit8-4-X5To record purchase of raw
materials8-8-X5To transfer raw materials to production, record

12. direct labor costs on job, and apply overhead at the
predetermined rate8-9-X5To transfer completed units to
finished goods inventory8-10-X5To record sale of finished
awning for $4,0008-10-X5To transfer finished goods to cost of
goods sold
B-19.06
Problem 6 (ch 19)Information for three different companies
follows. Each company applies factory overhead at the rate of
40% of direct labor cost. In each scenario, the following entry
was made to record the actual overhead costs:Factory
Overhead85,000Salaries Payable50,000Utilities
Payable15,000Supplies4,000Accumulated
Depreciation16,000Prepare a compound journal entry for each
company to transfer raw materials to production, record direct
labor costs on each job, and apply overhead at the
predetermined rate. If the scenario involves underapplied or
overapplied overhead, prepare an additional journal entry to
transfer the amount to Cost of Goods Sold.Company ARaw
materials transferred to production totaled $100,000, and direct
labor cost was $212,500.Company BRaw materials transferred
to production totaled $110,000, and direct labor cost was
$200,000.Company CRaw materials transferred to production
totaled $90,000, and direct labor cost was $225,000.
B-19.07
Worksheet 6 (ch 19)GENERAL
JOURNAL DateAccountsDebitCreditATo record costs and
apply overhead at the predetermined rate ($212,500 X 40% =
$85,000)BTo record costs and apply overhead at the
predetermined rate ($200,000 X 40% = $80,000)BCTo record
costs and apply overhead at the predetermined rate ($225,000 X
40% = $90,000)C
B-19.07
Problem 7 (ch 20)Zeus Corporation produces cultured diamonds
via a secretive process that grows the diamonds in a vacuum
chamber filled with a carbon gas cloud. The diamonds are
produced in a single continuous process, and Zeus uses the

13. weighted-average process costing method of accounting for
production.
The production process requires constant utilization of facilities
and equipment, as well as direct labor by skilled technicians.
As a result, direct labor and factory overhead are both deemed
to be introduced uniformly throughout production.Zeus
Corporation prepared the following "unit reconciliation" for the
month of July:Unit Reconciliation:Quantity
ScheduleBeginning Work in Process5,000Started into
Production6,000Total Units into Production11,000Equivalent
Units Calculations:ConversionDirect
MaterialsDirect
LaborFactory OverheadTo Finished
Goods8,0008,0008,0008,000Ending Work in
Process3,0001,8001,5001,500Total Units
Reconciled11,0009,8009,5009,500Ending WIP Completion
Status:
Materials = 60% and Conversion = 50%The above beginning
work in process inventory had an assigned cost of $3,000,000,
divided between direct materials (30%), direct labor (20%), and
factory overhead (50%).Additional costs incurred during July
were $9,500,000, divided between direct materials (15%), direct
labor (25%), and factory overhead (60%).Prepare a schedule
showing the calculation of cost per equivalent unit.
B-20.03
Worksheet 7 (ch 20)Cost Per Equivalent Unit:ConversionTotal
CostDirect
MaterialsDirect
LaborFactory
OverheadBeginning Work in ProcessCost incurred during
periodTotal costEquivalent unitsCosts per equivalent unit
B-20.03
Problem 8 (ch 20)Zeus Corporation produces cultured diamonds
via a secretive process that grows the diamonds in a vacuum
chamber filled with a carbon gas cloud. The diamonds are

14. produced in a single continuous process, and Zeus uses the
weighted-average process costing method of accounting for
production.
Below is the company's calculation of cost per equivalent unit
for October. During October, the company completed and
transferred 8,000 diamonds to finished goods. An additional
4,000 units were still in process at the end of the month. The
ending work in process was 60% complete with respect to direct
materials and 40% complete with respect to both elements of
conversion cost.Prepare a schedule showing the allocation of
total cost between finished goods and ending work in
process.Cost Per Equivalent Unit:ConversionTotal
CostDirect
MaterialsDirect
LaborFactory
OverheadBeginning Work in Process$ 3,900,000$ 1,170,000$
780,000$ 1,950,000Cost incurred during
period9,300,0001,860,0002,325,0005,115,000Total cost$
13,200,000$ 3,030,000$ 3,105,000$ 7,065,000Equivalent
units÷ 10,400÷ 9,600÷ 9,600Costs per equivalent
unit$ 291.35$ 323.44$ 735.94$1,059.38$1,350.72
B-20.04
Worksheet 8 (ch 20)Cost Allocation:Equivalent
Units:ConversionTotal
CostDirect
MaterialsDirect
LaborFactory
OverheadTransferred to Finished GoodsEnding Work in
ProcessTotal Ending Work in ProcessTotal Cost Allocation
B-20.04
Problem 9 (ch 20)Howorth Dental Products is a London-based
producer of a patented anti-microbial dental floss. All raw
material is introduced at the beginning of the production
process, but considerable processing time is needed to create
the anti-microbial qualities of the specially designed floss.

15. Howorth measures output in meters of floss and applies the
weighted-average process costing method. The following
information is available for a recent period:Beginning work in
process inventory:140,000 meters at a cost of £46,200 for direct
materials, £24,900 for direct labor, and £24,900 for factory
overhead. The conversion process was 55% complete.Units
started into production:260,000 metersUnits completed and
transferred to finished goods:380,000 metersEnding work in
process inventory:20,000 meters, 30% completeAdditional costs
incurred during the period:Direct materials, £85,400
Direct labor, £98,200
Factory overhead, £98,600Prepare a cost of production report
for Howorth.
B-20.05
Worksheet 9 (ch 20)Howorth DentalCost of Production
ReportWeighted-average methodUnit
Reconciliation:QuantityBeginning Work in ProcessStarted into
ProductionTotal Units into ProductionEquivalent Units
Calculations:ConversionDirect
MaterialsDirect
LaborFactory
OverheadTransferred to Finished GoodsEnding Work in
ProcessTotal Units ReconciledEnding WIP Completion Status:
Materials = 100% and Conversion = 30%Cost Per Equivalent
Unit:ConversionTotal CostDirect
MaterialsDirect
LaborFactory
OverheadBeginning Work in ProcessCosts Incurred During
PeriodTotal costEquivalent Units (from above)Costs per
equivalent unitCost Allocation:EQUIVALENT UNITS (from
above):CONVERSIONTotal
CostDirect
MaterialsDirect
LaborFactory
OverheadTransferred to Finished Goods( units @
each)Ending Work in ProcessIncurred (Material @

16. )Incurred (Conver. @ )Total Ending Work in
ProcessTotal Cost Allocation
B-20.05
Problem 10 (ch 20)Vasquez Systems produces high-quality table
tops. Each table top is produced from a single large tree in a
three-step process consisting of milling, sanding, and cutting.
All raw material is introduced at the start of the milling process.
The company uses a process costing system for all costs
incurred throughout the production cycle. The following data
were extracted from each department's cost of production report
prepared for April:Milling Dept.The beginning balance of work
in process was $275,000. During April, additional costs of
$690,000 were incurred. The additional costs were attributable
to direct materials (70%), direct labor (20%), and factory
overhead (10%). The ending balance of work in process was
$160,000.Sanding Dept.The beginning balance of work in
process was $175,000. During April, additional costs of
$400,000 were incurred. The additional costs were attributable
to direct labor (70%) and factory overhead (30%). The ending
balance of work in process was $290,000.Cutting Dept.The
beginning balance of work in process was $365,000. During
April, additional costs of $150,000 were incurred. The
additional costs were attributable to direct labor (60%) and
factory overhead (40%). The ending balance of work in process
was $210,000.Prepare summary journal entries to reflect costs
incurred by each department during April, as well as the
transfer of costs between departments and into finished goods.
B-20.06
Worksheet 10 (ch 20)GENERAL
JOURNAL DateAccountsDebitCreditAprilTo record material,
labor, and overhead for MillingAprilTo transfer completed units
from Milling to SandingAprilTo record labor and overhead for
SandingAprilTo transfer completed units from Sanding to
CuttingAprilTo record labor and overhead for CuttingAprilTo
transfer completed units to finished goods
B-20.06