Name: _________________________________ Class time: 12:30 1:30 Quiz 3 1. Andy owns a factory that makes gourmet chocolate pudding. There are two processes: the pudding first goes through the mixing process and then goes through the packaging process. The following information relates to the packaging process. Costs from the mixing process are transferred in when the process is complete. Direct materials (plastic pudding cups) are added at the end of the packaging process. Conversion costs are incurred evenly throughout the process. Gallons of pudding: Beginning WIP 450 Transferred in from mixing 1,100 Completed and transferred out of production 860 Ending WIP (60% complete with packaging) 690 Costs: Beginning WIP - Transferred in from mixing $5,420 - Direct materials $0 - Conversion costs $1,350 Total beginning WIP $8,570 Costs added during September: ? Transferred in from mixing $2,250 ? Direct materials $6,600 ? Conversion costs $975 Total costs added during September $9,825 A) Draw a timeline to illustrate the packaging process (1pt) DM added 0% 60% 100% 690 units EWIP 860 units finished B) Calculate the total equivalent units for transferred in costs, direct materials and conversion costs. (2 pts) Phys Trans DM Conv Beg WIP 450 Started (transferred in) 1,100 Phys units to acct. for 1,550 Completed 860 860 860 860 End WIP 690 690 0 414 Phys. units accounted for 1,550 EU accounted for 1,550 860 1,274 C) Compute the cost per equivalent unit for transferred in, direct materials and conversion costs. (2.5pts) Trans DM Conv. Total Beg WIP $5,420 $0 $1,350 $6,770 Costs added $2,250 $6,600 $975 $9,825 Costs to account for $7,670 $6,600 $2,325 $16,595 Divided by EU / 1,550 / 860 / 1,274 = Cost per EU $4.948 $7.674 $1.825 D) Compute the total cost of the units in Ending WIP. Label the amount of transferred in, direct material, and conversion costs. (2.5pts) Trans DM Conv. Total Completed 860 units * ($4.948 + $7.674 + $1.825) $12,424 End WIP: Transferred in 690 units * ($4.948) $3,414 DM 0 units * $7.674) $0 Conv. 414 * ($1.825) $756 Costs accounted for Costs to account for $7,670 $6,600 $2,325 $16,594 E) Compute the average cost of the units that are finished and leave the packaging process (1pt) Sum of the three different cost per EU: ($4.948 + $7.674 + $1.825) = $14,447 Or divide COGM by units completed: $12,424 / 860 units = $14.447 F) When the units are finished with the packaging process, are the costs associated with those units considered as a transferred in cost, cost of goods manufactured, or cost of goods sold? (1pt) Cost of goods manufactured Andy Baumhover Name: ______________________________
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