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    Jan 23, 2012, 10:33 AM
    Process costing
    Double Eagle Corporation produces the prestigious “Double Eagle” golf ball in one department using a process costing system. At the beginning of January, 10,000 golf balls were in work-in-process. During January, 20,000 more golf balls were started. The ending work-in-process included 6,000 balls which were 100 percent completed for direct materials, 75 percent completed for direct labor, and 75 percent completed for overhead.

    The following table lists the cost information for Department A.

    Materials Labor Overhead
    Beginning Work-in-Process $10,000 $2,000 $3,200
    Costs Added During January 20,000 5,125 8,200

    Calculate the answers to the following questions.

    1. How many golf balls were completed during January?
    2. Calculate the equivalent units for materials in the ending work-in-process.
    3. Calculate the equivalent units for labor in the ending work-in-process.
    4. Calculate the equivalent units for overhead in the ending-in-process.
    5. Using the formula on page 94, calculate the cost per equivalent unit for materials.
    6. Using the formula on page 94, calculate the cost per equivalent unit for labor.
    7. Using the formula on page 94, calculate the cost per equivalent unit for overhead.
    8. What is the total equivalent cost of one golf ball in the month of January?
    9. What is the cost of the golf balls completed during January?
    (Hint: Number of golf balls completed times the equivalent cost per golf ball.)
    10. What is the cost of the ending work-in-process inventory?
    (Hint: Equivalent units for materials in ending WIP times the cost per equivalent unit for materials
    Equivalent units for labor in ending WIP times the cost per equivalent unit for labor
    Equivalent units for overhead in ending WIP times the cost per equivalent unit for overhead


    Check Figure: The sum of your answers to questions 9 and 10 should equal $48,525 (the total costs that must be accounted for in either the work-in-process and completed goods inventories.

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