• The company was founded to transport kerosene from eastern refineries to Utah by railroad tank and sell it
in bulk, making it affordable for the pioneers.
• Today, the Conoco brand is owned by ConocoPhillips and Conoco Quality PROclean Gasolines are sold at
more than 3,100 retail fuel sites in the United States.
• The company has 32,500 employees and assets of $173 billion.
• Top competitors are BP, Exxon, Mobil, and Royal Dutch/Shell.
• This system is usually appropriate in situations in which there are continuous operations on standard types
of products.
1. Products are not made in batches or special orders.
3. Beginning work in process inventory and costs added during the current period.
4. Multiply units in ending work in process inventory by stage of completion for each cost element to
6. Yes. All cost data is posted to the departmental Work in Process accounts.
8. If products are not the same, the average cost calculation will be meaningless.
10. Each element of cost in beginning inventory is added to amount of that element incurred during month.
11. Number of units of product transferred out of department is multiplied by 100 percent to determine number
Note to the instructor : These questions are designed to check students’ understanding of new terms, concepts, and
procedures presented in the chapter.
Discussion Questions
CHAPTER 28
PROCESS COST ACCOUNTING
Chapter Opener: Thinking Critically
Students’ responses will vary. As ConocoPhillips products move through different refineries, production costs are
most likely classified and tracked within each refining facility. For example, labor, materials, and overhead costs
for gallons of oil in production process for the Louisiana facility might be recorded separately from accounting
entries recorded for Venezuela operations.
Fast Facts
Managerial Implications: Thinking Critically
EXERCISE 28.1
Equivalent units of production for prior department costs
EXERCISE 28.2
Equivalent units of production for materials:
EXERCISE 28.3
Equivalent units of production for labor and overhead
EXERCISE 28.4
1. Cost per equivalent unit for materials:
Transferred out to next department (6,000 × 100%) = 6,000
3. Cost of material in ending work in process = 2,000 × $3 = $6,000
EXERCISE 28.5
1. Equivalent units for materials
Materials
2. Cost per unit for material
Material costs ÷ Materials equivalent units = ($6,000 + $25,900) ÷ 3,000
=
$10.63
EXERCISE 28.6
1. Equivalent units for overhead
2. Cost per unit for overhead
Overhead costs equivalent units = ($3,000 + $15,000) ÷ 2,900 = $6.21
EXERCISE 28.7
PAGE
POST.
REF.
1 2013 1
2 Sept. 30 Work in Process Inventory—Fab Dept. 4100000 2
3 Work in Process Inventory—Finishing Dept. 600000 3
4 Raw Materials Inventory 4700000 4
5 5
EXERCISE 28.8
PAGE
POST.
REF.
1 2013 1
2 Sept. 30 Work in Process—Finishing Department 5900000 2
3 Work in Process Inventory—Fab Dept. 5900000 3
GENERAL JOURNAL
DATE DESCRIPTION DEBIT CREDIT
GENERAL JOURNAL
DATE DESCRIPTION DEBIT CREDIT
EXERCISE 28.9
PAGE
POST.
REF.
1 2013 1
2 Sept. 30 Accounts Receivable 100 0 0 0 00 2
3 Sales 100 0 0 0 00 3
GENERAL JOURNAL
DATE DESCRIPTION DEBIT CREDIT
PROBLEM 28.1A
Molding Department
Materials: Units transferred to assembly department 2 9 0 0
Work in process (100 units × 100%) 1 0 0
Assembly Department
Materials: Units transferred to completion department 2600
Work in process (300 units × 80%) 2 4 0
Equivalent production for materials in assembly department 2840
Labor and Overhead: Units transferred to completion department 2600
Work in process (300 units × 80%) 2 4 0
Equivalent production for labor and overhead in assembly department 2840
Completion Department
GoingGreen, Inc.
Equivalent Production Computations
Month Ended July 31, 2013
PROBLEM 28.2A
P
AGE
POST.
REF.
1 2013 1
12 12
13 30 Work in Process Inventory—Fabricating Depart. 16 5 1 3 00 13
14 Work in Process—Assembly Department 7 8 3 0 00 14
15 Manufacturing Overhead 24 3 4 3 00 15
16 16
17 30 Work in Process—Assembly Department 87 7 9 5 00 17
18 Work in Process Inventory—Fabricating Dept. 87 7 9 5 00 18
19 19
GENERAL JOURNAL
DATE DESCRIPTION DEBIT CREDIT
PROBLEM 28.2A (continued)
Fabricating Department
Materials: Units transferred out to next department: 100% × 4,500 units 4 5 0 0
Work in process: 100% × 500 units 5 0 0
Equivalent units of production for materials 5000
Labor and manufacturing overhead
Labor and manufacturing overhead
Units transferred out to finished goods: 100% × 4,200 units 4200
Work in process: 50% × 300 units 1 5 0
Equivalent units of production for labor and overhead 4350
Rahc Games, Inc.
Computation of Equivalent Unit Production
Month Ended June 30, 2013
PROBLEM 28.2A (continued)
QUANTITY SCHEDULE
(a) Quantity to be accounted for
Started in production 5000
COST SCHEDULE
(c) Costs to be accounted for
Costs in current department
Materials 45 0 0 0 00 ÷ 5 0 0 0 = 9 00
Labor 34 9 8 6 00 ÷ 4 9 0 0 = 7 14
Rounding adjustment 0 00
Total work in process—ending 870400
Total costs accounted for 96 4 9 9 00
*Equivalent Production Units or
Equivalent Units of Production
TOTAL COST E.P. UNITS* UNIT COST
Rahc Games, Inc.
Cost of Production Report—Fabricating Department
Month Ended June 30, 2013
UNITS
PROBLEM 28.2A (continued)
QUANTITY SCHEDULE
(a) Quantity to be accounted for
Transferred in from prior department 4500
Total to be accounted for 4500
(b) Quantity accounted for
COST SCHEDULE
(c) Costs to be accounted for
Costs in prior department 87 7 9 5 00 = 4 5 0 0 1 9 51
Costs in current department
Materials 738000÷ 4 500= 164
Labor 14 7 9 0 00 ÷ 4 3 5 0 = 3 40
Manufacturing overhead 783000÷ 4 350= 180
Total current department costs 30 0 0 0 00 6 84
Rahc Games, Inc.
Cost of Production Report—Assembly Department
Month Ended June 30, 2013
UNITS
TOTAL COST E.P. UNITS* UNIT COST
PROBLEM 28.3A
First Department
Materials: Units transferred out to next department: 100% × 10,500 units 10 5 0 0
Work in process: 100% × 1,500 units 1 5 0 0
Equivalent Unit Production Computations
Month Ended August 31, 2013
Jasper Corporation
PROBLEM 28.3A (continued)
QUANTITY SCHEDULE
(a) Quantity to be accounted for
Work in process—beginning 1000
Started in production 11000
COST SCHEDULE
(c) Costs to be accounted for
Costs in current department
Work in process—beginning
Materials 796000
Labor 530000
Overhead 275000
Rounding adjustment 0 00
Total work in process—ending 747000
Total costs accounted for 7446000
*Equivalent Production Units or
Equivalent Units of Production
Jasper Corporation
TOTAL COST E.P. UNITS* UNIT COST
Cost of Production Report
Month Ended August 31, 2013
UNITS
PROBLEM 28.1B
Molding Department
Materials: Units transferred to next department 4 5 0 0
Work in process (500 units × 100%) 5 0 0
Equivalent production for materials in assembly department 4500
Labor and Overhead: Units transferred to finishing department 4300
Work in process (200 units × 80%) 1 6 0
Equivalent production for labor and overhead in assembly department 4460
Finishing Department
Month Ended August 31, 2013
Clair Company
Equivalent Production Computations