Chapter 4
Process Costing
Solutions to Questions
4-1 A process costing system should be
used in situations where a homogeneous
product is produced on a continuous basis in
large quantities.
4-2 Job-order and processing costing are
similar in the following ways:
1. Job-order costing and process costing have
4-3 Cost accumulation is simpler under
process costing because costs only need to be
assigned to departments—not individual jobs. A
4-5 The journal entry to record the transfer
of work in process from the Mixing Department
to the Firing Department is:
Work in Process, Firing …………………………..
XXXX
Work in Process, Mixing………………………….
XXXX
4-6 The costs that might be added in the
transferred to the next department (or to
finished goods) during the period plus the
equivalent units in the department’s ending
work in process inventory.
The Foundational 15
1. The journal entries would be recorded as follows:
Work in Process—Mixing …………………………..
120,000
Work in Process—Mixing …………………………..
2. The journal entry would be recorded as follows:
Work in Process—Mixing …………………………..
3. The “units completed and transferred to finished goods” is computed
as follows:
37,500
42,500
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
Work in process, ending:
The Foundational 15 (continued)
6. and 7.
Materials
Conversion
8. and 9.
The cost per equivalent unit for materials and conversion is computed
10. and 11.
The cost of ending work in process inventory for materials and
conversion is computed as follows:
12. and 13.
The cost of materials and conversion transferred to finished goods is
computed as follows:
The Foundational 15 (continued)
14. The journal entry to record the transfer of costs from Work in
15. The total cost to be accounted for and the total cost accounted for is:
Costs to be accounted for:
Cost of beginning work in process inventory …….
$ 28,000
Costs added to production during the period ……
Cost of ending work in process inventory ………..
$ 41,600
Total cost accounted for ………………………………
Exercise 4-1 (20 minutes)
a. To record issuing raw materials for use in production:
Work in Process—Molding Department ……… 23,000
Work in Process—Firing Department …………. 8,000
Raw Materials ………………………………… 31,000
b. To record direct labor costs incurred:
d. To record transfer of unfired, molded bricks from the Molding
Department to the Firing Department:
Work in Process—Firing Department …………. 57,000
Work in Process—Molding Department … 57,000
Exercise 4-2 (10 minutes)
Weighted-Average Method
Equivalent Units
Materials
Conversion
Units transferred out ………………….
190,000
190,000
Work in process, ending:
Equivalent units of production ……..
Exercise 4-3 (10 minutes)
Weighted-Average Method
1.
Materials
Labor
Overhead
Cost added during the period ……..
Total cost (a) ………………………….
Equivalent units of production (b) .
Cost per equivalent unit (a) ÷ (b) .
Cost of beginning work in process
2.
Cost per equivalent unit for materials …..
$ 7.34
Cost per equivalent unit for labor ………..
Cost per equivalent unit for overhead …..
13.00
Exercise 4-4 (10 minutes)
Materials
Conversion
Total
Ending work in process inventory:
Equivalent units of production ……
2,000
800
Cost per equivalent unit ……………
Units completed and transferred out:
Cost per equivalent unit ……………
Cost of units transferred out ………
$278,586
$367,629
Exercise 4-5 (10 minutes)
Baking Department
Cost Reconciliation
Costs to be accounted for:
Cost of beginning work in process inventory .
$ 3,570
Costs added to production during the period .
43,120
Total cost to be accounted for ………………….
$46,690
Costs accounted for as follows:
Cost of ending work in process inventory ……
$ 2,860
Cost of units completed and transferred out ..
*
Total cost accounted for ………………………….
Exercise 4-6 (10 minutes)
Weighted-Average Method
1.
Tons of Pulp
20,000
2.
Equivalent Units
Materials
Labor and
Overhead
Units transferred out …………………………..
Work in process, ending:
Equivalent units of production ……………….
Exercise 4-7 (10 minutes)
Work in Process—Cooking …………
42,000
Raw Materials Inventory ………
42,000
Work in Process—Cooking …………
50,000
Work in Process—Molding …………
36,000
Wages Payable …………………..
86,000
Work in Process—Cooking …………
75,000
Work in Process—Molding …………
Work in Process—Cooking …….
Finished Goods ……………………….
Work in Process—Molding …….
Exercise 4-8 (30 minutes)
Weighted-Average Method
1.
Materials
Conversion
Equivalent units of production …………………….
Units transferred to the next production
2.
Materials
Conversion
Cost of beginning work in process ………………
$ 1,500
$ 4,000
Cost added during the period …………………….
54,000
Cost per equivalent unit (a) ÷ (b) ……………….
3.
Materials
Conversion
Total
Ending work in process inventory:
Equivalent units of production
(see above) ……………………
10,000
3,000
$2.00
$3,000
Units completed and transferred out:
department ……………………
175,000
$2.00
Exercise 4-9 (15 minutes)
Weighted-Average Method
1.
Materials
Labor
Overhead
Units transferred to the next
department ………………………………..
42,000
42,000
42,000
Work in process, ending:
2.
Materials
Labor
Overhead
Exercise 4-10 (10 minutes)
Weighted-Average Method
Materials
Labor &
Overhead
Pounds transferred to the Packing Department
during July* ………………………………………………
375,000
375,000
400,000
390,000
Exercise 4-11 (30 minutes)
Weighted-Average Method
1.
Equivalent units of production
Pulping
Conversion
Transferred to next department ……………………
Ending work in process:
Equivalent units of production ……………………..
2.
Cost per equivalent unit
Pulping
Conversion
Cost of beginning work in process …………….
Cost added during the period …………………..
Total cost (a) …………………………..…………..
Equivalent units of production (b) …………….
159,000
Cost per equivalent unit, (a) ÷ (b) ……………
$0.65
$0.20
3.
Cost of ending work in process inventory and units transferred out
Pulping
Conversion
Total
Ending work in process inventory:
Equivalent units of production…
8,000
2,000
Cost per equivalent unit ………..
$0.65
$0.20
Units completed and transferred out:
Cost per equivalent unit ………..
$0.65
$0.20
$31,400
Exercise 4-11 (continued)
4.
Cost reconciliation
Costs to be accounted for:
Costs added to production during the period
Costs accounted for as follows:
Cost of beginning work in process inventory
Exercise 4-12 (20 minutes)
Weighted-Average Method
1. Computation of equivalent units in ending inventory:
Materials
Labor
Overhead
Equivalent units of production …
2. Cost of ending work in process inventory and units transferred out:
Materials
Labor
Overhead
Total
Ending work in process inventory:
Cost of ending work in
$47,280
Units completed and transferred out:
Cost of units completed
Equivalent units of
3. Cost reconciliation:
Total cost to be accounted for ………………………
$599,780
Costs accounted for as follows:
Problem 4-13A (60 minutes)
Weighted-Average Method
1. Computation of equivalent units in ending inventory:
Mixing
Materials
Conversion
Units transferred to the next department ……..
1.0
Equivalent units of production ……………………
2. Costs per equivalent unit:
Mixing
Materials
Conversion
Cost of beginning work in process inventory ….
$ 1,670
$ 90
$ 605
Total cost (a) ………………………………………….
Equivalent units of production (b) ……………….
Problem 4-13A (continued)
3. Costs of ending work in process inventory and units transferred out:
Mixing
Materials
Conversion
Total
Ending work in process inventory:
Units completed and transferred out:
4. Cost reconciliation:
Cost to be accounted for:
Cost added to production during the period
Costs accounted for as follows:
Cost of beginning work in process inventory
Problem 4-14A (45 minutes)
Weighted-Average Method
1.
Equivalent units of production
Materials
Conversion
Transferred to next department* ………………….
170,000
170,000
Ending work in process:
Equivalent units of production ……………………..
2.
Cost per equivalent unit
Materials
Conversion
Cost of beginning work in process …………….
Cost added during the period …………………..
Total cost (a) …………………………..…………..
Equivalent units of production (b) …………….
179,000
Cost per equivalent unit, (a) ÷ (b) ……………
$1.30
3.
Cost of ending work in process inventory and units transferred out
Materials
Conversion
Total
Ending work in process inventory:
Equivalent units of production…
15,000
9,000
Cost per equivalent unit ………..
$1.30
$11,700
Units completed and transferred out:
170,000
Cost per equivalent unit ………..
$1.30