Beige Industries operates several laminate flooring plants. Given the competitive pricing for​ flooring, Beige​'s manage

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Beige Industries operates several laminate flooring plants.Given the competitive pricing for​ flooring, Beige​'s
managers pay close attention to costs.
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The corporate controller has been pleased with the success ofthe​ company's benchmarking program.​ However, thecorporate controller has recently received anonymous​ e-mailsthat a plant manager has been manipulating his quarterly estimatesof percentage of completion in an attempt to obtain the bonus. Theplant in question provided the following​ data:
Summary of the Flow of Physical Units and Output inEquivalent Units; Weighted-Average Method of Process Costing, PlantC of Beige Industries for Quarter 4, 2020
Equivalent Units
Physical Units
Direct Materials
Conversion Costs
Completed and transferred out during current period
25,000
25,000
25,000
Work in process, endingª (given)
12,000
12,000 × 100%; 12,000 × 70%
12,000
8,400
Accounted for
37,000
Equivalent units of work done to date
37,000
33,400
ªDegree of completion reported in this plant: direct materials,100%; conversion costs, 70%.
Summary of Cost per Equivalent Unit and CostsAssigned to Units Completed and to Units in Ending Work-in-Processinventory; Weighted-Average Method of Process Costing, Plant C ofBeige Industries for Quarter 4, 2020
Total Production Costs
Direct Materials
Conversion Costs
Costs incurred to date
$92,500
$173,680
Divide by equivalent units of work done to date
37,000
33,400
Cost per equivalent unit of work done to date
$2.50
$5.20
Assignment of costs:
Completed and transferred out (25,000 units)
$192,500
(25,000 × $2.50)
(25,000 × $5.20)
Work in process, ending (12,000 units)
73,680
(12,000 × $2.50)
(8,400 × $5.20)
Total costs accounted for
$266,180
$92,500
$173,680
1.
80​%
50​%
2.
Based on the correct percentage of completion computed inrequirement​ 1, recalculate cost of goods completed andtransferred out and the cost of ending work in processinventory.
3.
Why might managers manipulate their quarterly estimates ofpercentage of​ completion? Explain.
4.
What is the ethical responsibility of eachplant​ controller?
5.
What should the corporate controller​ do?
6.
How might the corporate controller learn whether the dataprovided by particular plants are being​ manipulated?
Each plant uses a​ process-costing system, and at the endof every​ quarter, each plant manager submits a productionreport and a​ production-cost report. The production reportincludes the plant​ manager's estimate of the percentage ofcompletion of the ending work in process as to direct materials andconversion​ costs, as well as the quantity​ (sheets) oflaminate flooring completed. The corporate controller uses theseestimates to compute the cost per equivalent unit of work done foreach input for the quarter. Plants are​ ranked, and the twoplants with the lowest cost per equivalent unit for directmaterials and conversion costs are each given a bonus andrecognized in the company newsletter.