Process Costing in Sequential Production Departments: Weighted-Average Method
Solutions Manual
to accompany
Process Costing in Sequential
Production Departments:
Weighted-Average Method
to accompany
MANAGERIAL
ACCOUNTING
Tenth Edition
Process Costing in Sequential Production Departments: Weighted-Average Method
Preface
The best way for most students to learn managerial accounting is to read the text and then
solve a representative sample of the review questions, exercises, problems and cases. The
topic of each exercise, problem, and case is indicated in the text. The estimated amount of
Process Costing in Sequential Production Departments: Weighted-Average Method
Supp 4-1
ANSWERS TO REVIEW QUESTIONS
Process Costing in Sequential Production Departments: Weighted-Average Method
Supp 4-2
SOLUTIONS TO EXERCISES
EXERCISE 3 (10 MINUTES)
1.
Work-in-Process Inventory: Pouring Department ……………
1,090,000
Raw-Material Inventory ………………………………………….
Wages Payable ……………………………………………………..
340,000
Manufacturing Overhead ……………………………………….
680,000
2.
Work-in-Process Inventory: Finishing Department ………….
900,000
Work-in-Process Inventory: Pouring Department ……
3.
Work-in-Process Inventory: Finishing Department ………….
725,000
Raw-Material Inventory ………………………………………..
Wages Payable …………………………………………………….
280,000
Manufacturing Overhead ………………………………………
420,000
4.
Finished-Goods Inventory ……………………………………………..
400,000
Work-in-Process Inventory: Finishing Department …
400,000
EXERCISE 4 (10 MINUTES)
1.
Work-in-Process Inventory: Preparation Department ………
1,635,000
Raw-Material Inventory ………………………………………….
105,000
Wages Payable ……………………………………………………..
510,000
Manufacturing Overhead ……………………………………….
1,020,000
2.
Work-in-Process Inventory: Finishing Department ………….
1,350,000
Work-in-Process Inventory: Preparation Department
1,350,000
3.
Work-in-Process Inventory: Finishing Department ………….
1,087,500
Raw-Material Inventory ………………………………………..
Wages Payable …………………………………………………….
420,000
Manufacturing Overhead ………………………………………
630,000
4.
Finished-Goods Inventory ……………………………………………..
600,000
Work-in-Process Inventory: Finishing Department …
600,000
Process Costing in Sequential Production Departments: Weighted-Average Method
Supp 4-3
SOLUTIONS TO PROBLEMS
PROBLEM 5 (30 MINUTES)
1.
a.
Cost of units completed and transferred to finished-goods inventory during
February:
Units completed and transferred out……………………………………….
5,950
Cost of units completed and transferred out …………………………...
b.
To compute the cost of the Finishing Department’s work-in–process inventory
on February 28, first determine the number of units in ending work-in–
process inventory, as follows:
Add: Units transferred in ………………………………………………………..
7,000
Units to account for ……………………………………………………………….
7,700
Less: Units transferred to finished goods ……………………………….
5,950
1,750
Then compute the transferred-in, direct-material, and conversion costs in the
February 28 work-in-process inventory:
Input
Equivalent
Units
Cost per
Equivalent
Unit
Cost
2.
Equivalent units of transferred-in costs ……………………………………………
7,700
Total transferred-in cost ………………………………………………………………….
Deduct: Transferred-in cost in February 1 work-in-process inventory .
Total cost transferred in from the Assembly Department ………………….
Journal entry to record transfer:
Work-in-Process Inventory: Assembly Department ……………
Supp 4-4
PROBLEM 6 (30 MINUTES)
1.
a.
Cost of units completed and transferred to finished-goods inventory during
May:
Units completed and transferred out……………………………………….
11,900
Cost of units completed and transferred out …………………………...
b.
To compute the cost of the Finishing Department’s work-in–process inventory
on May 31, first determine the number of units in ending work-in-process
inventory, as follows:
Work-in-process inventory, May 1 (in units) …………………………….
1,400
Add: Units transferred in ………………………………………………………..
14,000
Units to account for ……………………………………………………………….
15,400
Less: Units transferred to finished goods ……………………………….
11,900
Work-in-process inventory, May 31 (in units) …………………………..
Then compute the transferred-in, direct-material, and conversion costs in the
May 31 work-in-process inventory:
Input
Equivalent
Units
Cost per
Equivalent
Unit
Cost
2.
Equivalent units of transferred-in costs ……………………………………………
15,400
Total transferred-in cost ………………………………………………………………….
Deduct: Transferred-in cost in May 1 work-in-process inventory ……….
Total cost transferred in from the Assembly Department ………………….
Journal entry to record transfer:
Work-in-Process Inventory: Finishing Department …………………..
70,250
Work-in-Process Inventory: Assembly Department ……………
70,250
Process Costing in Sequential Production Departments: Weighted-Average Method
Supp 4-5
SOLUTIONS TO CASES
CASE 7 (60 MINUTES)
PRODUCTION REPORT: HOME GARDEN COMPANY – GRADING DEPARTMENT
Weighted-Average Method
Physical
Units
(pounds)
Percentage
of
Completion
with
Respect to
Conversion
Equivalent Units
Direct
Material
Conversion
Work in process, November 1 ………
-0-
—
Units started during November ……
Total units to account for …………….
Units completed and transferred
out during November ………………
36,000
Work in process, November 30 …….
—
Total units accounted for …………….
Direct
Material
Conversion
Total
Work in process, November 1 ………………………
-0-
-0-
-0-
Costs incurred during November …………………
$352,080
Total costs to account for …………………………...
$352,080
Equivalent units ………………………………………….
Costs per equivalent unit …………………………….
$2.40
$9.78
Cost of goods completed and transferred out of the Grading Department
during November:
Cost remaining in November 30 work-in-process inventory in the
Grading Department ………………………………………………………………………….
-0-
Check: Cost of goods completed and transferred out ………….
Process Costing in Sequential Production Departments: Weighted-Average Method
Supp 4-6
Total costs accounted for ……………………………………….
CASE 7 (CONTINUED)
PRODUCTION REPORT: HOME GARDEN COMPANY – FINISHING DEPARTMENT
Weighted-Average Method
Physical
Units
(pounds)
Percentage
of
Completion
with
Respect to
Conversion
Equivalent Units
Transferred
in
Conversion
Work in process, November 1 ………
1,600
50%
Units transferred in during November
36,000
Total units to account for …………….
37,600
Units completed and transferred
out during November ………………
35,600
100%
35,600
35,600
Work in process, November 30 …….
50%
Total units accounted for …………….
37,600
Transferred
In
Conversion
Total
Work in process, November 1 ………………………
$ 13,850
$ 3,750
$ 17,600
Costs incurred during November …………………
Total costs to account for …………………………...
Equivalent units ………………………………………….
Costs per equivalent unit …………………………….
$2.45
Supp 4-7
CASE 7 (CONTINUED)
Cost of goods completed and transferred out of the Finishing
Department during November:
Cost remaining in November 30 work-in-process inventory in the
Finishing Department:
Transferred-in costs:
in–dtransferre
of number
Direct material:
None
Conversion:
conversion
of number
Total cost of November 30 work in process …………………………………….
$21,914
Check: Cost of goods completed and transferred out ………….
$433,686
Cost of November 30 work-in–process inventory ……..
Total costs accounted for ……………………………………….
$455,600
†Rounded
Supp 4-8
CASE 8 (60 MINUTES)
PRODUCTION REPORT: AGRITECH, INC. – MIXING DEPARTMENT
Weighted-Average Method
Physical
Units
Percentage
of
Completion
with
Respect to
Conversion
Equivalent Units
Direct
Material
Conversion
Work in process, September 1 ……..
-0-
—
Units started during September …..
Total units to account for …………….
out during September ……………..
38,000
Work in process, September 30 ……
—
Total units accounted for …………….
Units completed and transferred
Direct
Material
Conversion
Total
Work in process, September 1 ……………………..
-0-
-0-
-0-
Costs incurred during September ………………..
$399,000
Total costs to account for …………………………...
$399,000
Equivalent units ………………………………………….
Costs per equivalent unit …………………………….
$2.50
Cost of goods completed and transferred out of the Mixing Department
during September:
Cost remaining in September 30 work-in-process inventory in the
Mixing Department …………………………………………………………………………….
-0-
Check: Cost of goods completed and transferred out ………….
Cost of September 30 work-in–process inventory …….
0-
Supp 4-9
CASE 8 (CONTINUED)
PRODUCTION REPORT: AGRITECH, INC. – SATURATING DEPARTMENT
Weighted-Average Method
Physical
Units
Percentage
of
Completion
with
Respect to
Conversion
Equivalent Units
Transferred
in
Conversion
Work in process, September 1 ………………
2,000
40%
Units transferred in during September ….
Total units to account for ……………………..
out during September ………………………
Work in process, September 30 …………….
3,000
40%
Total units accounted for ……………………..
Units completed and transferred
Transferred
In
Conversion
Total
Work in process, September 1 ……………………..
$ 41,000
$ 24,600
$ 65,600
Costs incurred during September ………………..
90,000
Total costs to account for …………………………...
$114,600
$554,600
Equivalent units ………………………………………….
Costs per equivalent unit …………………………….
Supp 4-10
CASE 8 (CONTINUED)
Cost of goods completed and transferred out of the Saturating
Department during September:
Cost remaining in September 30 work-in-process inventory in the
Saturating Department:
Transferred-in costs:
Direct material:
None
Conversion:
Total cost of September 30 work in process ……………………………………
Check: Cost of goods completed and transferred out ………….
Cost of September 30 work-in–process inventory …….
Total costs accounted for ……………………………………….
conversion
of number