1
Exercise 4-1 Process Costing Journal Entries [LO1] Arizona Brick Brick Corporation produces produces bricks in two processing processing departments—Moldin departments—Molding g and Fi March follows: a. Raw materials were issued for use in production: Molding Department, $28,000; and
Direct labor costs were were incurred: incurred: Molding Molding Department, Department, $18,000; $18,000; and Firing Departmen Departmen b. Direct anufac actu turi ring ng ove overh rhea ead d was was app applilied ed:: Mol Moldi ding ng Dep Depar artm tmen ent, t, $24 $24,0 ,000 00;; and and Firi Firing ng Dep Depa a c. Manuf nfired ed,, mol molde ded d bri brick cks s wer were e tra trans nsfe ferr rred ed from from the the Mol Moldi ding ng Depa Depart rtme ment nt to the the Firin iring g De De d. Unfir cost of the unfired, molded bricks was $67,000. Finish shed ed bric bricks ks were ere tra trans nsfe ferr rred ed from from the the Fir Firin ing g Dep Depar artm tmen entt to to the the fini finish shed ed good goods s war war e. Fini cost of the finished bricks was $108,000. f. Finished bricks were sold to customers. According to the company's process costing
Required:
Prepare journal entries to record items (a) through (f) above.
a.
b.
c.
d.
e.
f.
General Journal W ork in process-Molding Department W ork in process-Firing Department Raw materials
Debit 28,000 5,000
33,000
W ork in process-Molding Department W ork in process-Firing Department Salaries and wages payable
18,000
W ork in process-Molding Department W ork in process-Firing Department Manufacturing overhead
24,000
W ork in process-Firing Department W ork in process-Molding Department
67,000
Finished goods W ork in process-Firing Department
108,000
Cost of goods sold
106,000
Finished goods
Credit
5,000 23,000
37,000 61,000
67,000
108,000
106,000
ring. Information relating to the company's operations operations in
iring Department, $5,000. t, $5,000. tment, $37,000. partment. According to the company's process costing system, the ehouse. According to the company's compan y's process costing system, the ystem, the cost of the finished bricks sold was $106,000.
Exercise 4-2 Computation of Equivalent Units-Weighted-Average Method [LO2] Lindex Company uses a process costing system. The following data are available for one department f
Percent Completed Work in process, October 1 Work in process, October 31
Units 50,000 30,000
Materials 90% 70%
Conversion 60% 50%
The department started 390,000 units into production during the month and transferred 410,000 co next department. Required: Compute the equivalent units of production for October, assuming that the company uses the weight average method of accounting for units and costs.
Equivalent units of production
Materials Conversion 431,000 425,000
or October:
pleted units to the
ed-
Exercise 4-3 Cost Per Equivalent Unit-Weighted-Average Method [LO3] Billinstaff Industries uses the weighted-average method in its process costing system. Data for the Assembly Department for May appear below:
Work in process, May 1 Cost added during May Equivalent units of production
Materials Labor Overhead $ 14,550 $ 23,620 $ 118,100 $ 88,350 $ 14,330 $ 71,650 1,200 1,100 1,100
Required: Required:
Compute the cost per equivalent unit for materials, for labor, and for overhead. (Round your answers to 2 decimal places.)
Cost per Equivalent units
Materials Conversion Overhead $ 85.75 $ 34.50 $ 172.50
2
Compute the total cost per equivalent whole unit. (Round your final answer to 2 decimal places. Total cost per equivalent unit $ 292.75
)
Exercise 4-4 Applying Costs to Units-Weighted-Average Method [LO4] Data concerning a recent period's activity in the Prep Department, the first processing departm costing system, appear below: Materials Equivalent units of production in ending work in process Cost per equivalent unit
Conversion
300
100
$31.56
$9.32
A total of 1,300 units were completed and transferred to the next processing department durin Required:
Compute the cost of the units transferred to the next department during the period and the cost of ending work in process inventory. Materials
Cost of units tranferred out Cost of ending work in process inventory
$ $
41,028 9,468
Conversion
$ $
12,116 932
ent in a company that uses the weighted-average method in its process
the period.
Total
$ $
53,144 10,400
5 Exercise 4-5 Cost Reconciliation Report-Weighted-Average Method [LO5]
Lech-Zurs Bakerie Corporation uses a process costing system. The Baking Department is one of the pro strudel manufacturing facility. In July in the Baking Department, the cost of beginning work in process i ending work in process inventory was $1,120, and the cost added to production was $25,650.
Required:
Prepare a cost reconciliation report for the Baking Department for July. Baking Department Baking Department Cost to be accounted for: Cost of beginning work in process inventory Costs added to production during the period Total cost to be accounted for
Costs accounted for as follows: Cost of ending work in process inventory Cost of units completed and transferred out Total cost accounted for
$ $ $
4,830 25,650 30,480
$ $ $
1,120 29,360 30,480
Explanation:
The cost of units completed and transferred out can be deduced as follows: Cost of beginning work in process inventory
+
Costs added to production during the period
Cost of ending = work in process + inventory
Cost of units completed and transferred out
$4,830
+
$25,650
=
$1,120
+
Cost of units completed and transferred out
Cost of units completed and transferred out
=
$4,830
+
$25,650
−
$1,120
Cost of units completed and transferred out
=
$29,360
Exercise 4-6 Equivalent Units and Cost per Equivalent Unit-Weighted-Average Method [LO2, LO3] Kalox, Inc., manufactures an antacid product that passes through two departments. Data for May for the first department follow:
cessing departments in its apple inventory was $4,830, the cost of
Exercise 4-6 Equivalent Units and Cost per Equivalent Unit-Weighted-Average Method [L Kalox, Inc., manufactures an antacid product that passes through two departments. Data for May f follow:
Work in process, May 1 Gallons started in process Gallons transferred out Work in process, May 31 Cost added during May
Gallons Materials 80,000 $ 68,600 760,000
Labor Overhead $ 30,000 $ 48,000
790,000 50,000 $ 907,200
$ 370,000
$ 592,000
The beginning work in process inventory was 80% complete with respect to materials and 75% c overhead. The ending work in process inventory was 60% complete with respect to materials an and overhead.
Required: Assume that the company uses the weighted-average method of accounting for units and costs. 1 Compute the equivalent units for May’s activity
Equivalent units of production (Gallons)
Materials
Labor
820,000
800,000
Overhead
800,000
2 Determine the costs per equivalent unit for Ma Materials
Cost per equivalent unit
$
1.19
Labor
$
0.50
Overhead
$
0.80
O2, LO3] r the first department
mplete with respect to labor and 20% complete with respect to labor
for the first department.
. (Round your answers to 2 decimal places.)
Exercise 4-7 Comprehensive Exercise; Second Production Department-Weighted-Average Method Papyrutech Corporation produces fine papers in three production departments—Pulping, Drying, a
such as wood fiber and rag cotton are mechanically and chemically treated to separate their fibers. Department, the wet fibers transferred from the Pulping Department are laid down on porous web the Finishing Department, the dried paper is coated, cut, and spooled onto reels. The company use system. Data for October for the Drying Department follow: Percent C Unit
Work in process inventory, October 1 Work in process inventory, October 31
Pulping
4,000 6,000
100% 100%
Pulping cost in work in process inventory, October 1 Conversion cost in work in process inventory, October 1 Units transferred to the next production department Pulping cost added during October Conversion cost added during October
No materials are added in the Drying Department. Pulping cost represents the costs of the wet fibe the Pulping Department. Wet fiber is processed in the Drying Department in batches; each unit in t batch and one batch of wet fibers produces a set amount of dried paper that is passed on to the Fi
Required: 1 Determine the equivalent units for October for pulping and conversion. Pulping
Equivalent units of production
Conversion
152,000
150,500
2 Compute the costs per equivalent unit for October for pulping and conversion. (Round unit answers to 4 decimal places.) Pulping
Cost per equivalent unit
$
0.40
Conversion
$
0.1495
3 Determine the total cost of ending work in process inventory and the total cost of units Department in October. (Round your cost per equivalent unit calculations to 4 decimal the nearest dollar amount.) Pulping
Cost of ending work in process inventory Cost of units completed & transferred out
$ 2,400 $ 58,400
Conversion
$ $
673 21,827
Total
$ $
3,073 80,227
4 Prepare a cost reconciliation report for the Drying Department for October. (Round you to the nearest dollar amount.) Cost Reconciliation Cost to be accounted for: Cost of beginning work in process inventory Costs added to production during the period Total cost to be accounted for
Costs accounted for as follows: Cost of ending work in process inventory Cost of units completed and transferred out Total cost accounted for
$ $ $
1,900 81,400 83,300
$ $ $
3,073 80,227 83,300
LO2, LO3, LO4, LO5] nd Finishing. In the Pulping Department, raw materials
The result is a thick slurry of fibers. In the Drying s, pressed to remove excess liquid, and dried in ovens. In s the weighted-average method in its process costing
mpleted Cenverison
60% 75% $ 1,500 $ 400 146,000 $ 59,300 $ 22,100
rs transferred in from he above table is a ishing Department.
our cost per equivalent
transferred to the Finishing places. Round your final answers to
r answers
Exercise 4-8 Process Costing Journal Entries [LO1] Schneider Brot is a bread-baking company located in Aachen, Germany, near the Dutch The company uses a process costing system for its single product—a popular pumpernic Schneider Brot has two processing departments—Mixing and Baking. The T-accounts bel the flow of costs through the two departments in April (all amounts are in the currency eur
Work in Process--Mixing
Balance 4/1 Direct materials Direct labor Overhead
10,000 330,000 260,000 190,000
Transferred out
760,000
Work in Process--Banking
Balance 4/1 Transferred in Direct labor Overhead
20,000 760,000 120,000 90,000
Transferred out
980,000
Required:
Prepare journal entries showing the flow of costs through the two processing departments during A
order. el bread. ow show os):
ril.
General Journal
Raw materials issued
Direct labbor incurred
Manufacturing overhead applied
Work completed in Mixing Department
Work completed in Banking Department
Debit
Credit
Exercise 4-9 Cost Assignment; Cost Reconciliation-Weighted-Average Method [LO2, LO Kenton Industrial Corporation uses the weighted-average method in its process costing s Assembly Department completed its processing of 18,000 units and transferred them to t beginning inventory and the costs added during April amounted to $855,000 in total. The 1,500 units, which were 90% complete with respect to materials and 40% complete with r costs per equivalent unit for the month were as follows: Materials ab
Cost per equivalent unit
Overhead
$24.00 #
$14.00
Required: 1
Compute the equivalent units of materials, labor, and overhead in the ending work in pro month. Materials
Labor
Equivalent units in ending work in process inventory
2
Compute the cost of ending work in process inventory and of the units transferred to the Materi
Cost of ending work in process inventory
3
Labor
Overhead
$ $
$
Cost of units completed and transferred out $ $
$
Prepare a cost reconciliation for April. (Note: You will not be able to break the cost to be of beginning inventory and costs added during the month.) Cost Reconciliation
Total cost to be accounted for
$
Total costs accounted for as follows: $
Total cost accounted for
$
, LO5] stem. During April, the Baker he next department. The cost of ending inventory in April consisted of espect to labor and overhead. The
ess inventory for the Overhead
ext department for April. Total
$ $
ccounted for into the cost
