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Solutions Manual, Chapter 4 1
Chapter 4
Process Costing
Solutions to Questions
4-1 A process costing system should be
used in situations where a homogeneous
similar in the following ways:
1. Job-order costing and process costing have
the same basic purposes—to assign
3. Costs flow through the accounts in basically
4-3 Cost accumulation is simpler under
4-5 The journal entry to record the transfer
of work in process from the Mixing Department
4-6 The costs that might be added in the
Firing Department include: (1) costs transferred
4-7 Under the weighted-average method,
equivalent units of production consist of units
transferred to the next department (or to
the medallions, but the medals are otherwise
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2 Managerial Accounting, 16th Edition
Chapter 4: Applying Excel
The completed worksheet is shown below.
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Solutions Manual, Chapter 4 3
Chapter 4: Applying Excel (continued)
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4 Managerial Accounting, 16th Edition
Chapter 4: Applying Excel (continued)
1. When the units are changed, the worksheet changes as show below:
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Solutions Manual, Chapter 4 5
Chapter 4: Applying Excel (continued)
All of the amounts involving units were cut in half. The units in
beginning work in process inventory were reduced from 200 units to
100 units; the units started into production during the period were
reduced from 5,000 units to 2,500 units; and the units in ending work in
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6 Managerial Accounting, 16th Edition
Chapter 4: Applying Excel (continued)
2. With all of the changes in the data, the worksheet should look like:
The cost of the units transferred out is $58,330.
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Solutions Manual, Chapter 4 7
Chapter 4: Applying Excel (continued)
3. Changing the percentage completion with respect to conversion for
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8 Managerial Accounting, 16th Edition
Chapter 4: Applying Excel (continued)
The cost per equivalent unit for conversion is not affected by the
increase in the percentage completion of the beginning inventory. In
fact, nothing else on the worksheet is affected except this one amount.
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Solutions Manual, Chapter 4 9
The Foundational 15
1. The journal entries would be recorded as follows:
Work in Process
—
Mixin
g
……………………. 120,000
2. The journal entry would be recorded as follows:
—
g
3. The “units completed and transferred to finished goods” is computed
as follows:
Pounds
Work in process, June 1…………………………………… 5,000
Started into production durin
g
the month …………….. 37,500
T
4. and 5.
The equivalent units of production for materials and conversion are
computed as follows:
Equivalent Units
Materials Conversion
Units transferred out ……………………….. 34,500 34,500
Equivalent units in endin
g
work in
—
g
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10 Managerial Accounting, 16th Edition
The Foundational 15 (continued)
6. and 7.
Material
s
Conversio
n
Cost of be
g
innin
g
work in process ……………. $ 16,000 $ 12,000
8. and 9.
The cost per equivalent unit for materials and conversion is computed
as follows:
10. and 11.
The cost of ending work in process inventory is computed as follows:
Materials Conversion Total
Equivalent units in ending work in
12. and 13.
The costs transferred to finished goods are computed as follows:
Materials Conversion Total
Units transferred out (a) …………… 34,500 34,500