Financial & Managerial Accounting
Financial & Managerial Accounting
18th Edition
ISBN: 9781260006520
Author: williams
Publisher: MCG
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Chapter 18, Problem 7AP

a. 1

To determine

Prepare a schedule showing units started and completed in the Molding Department during April.

a. 1

Expert Solution
Check Mark

Explanation of Solution

Process Costing:

It is a method of cost accounting used by an enterprise with processes categorised by continuous production. The cost for manufacturing those products are assigned to the manufacturing department before the averaged over units are being produced.

Prepare a schedule showing units started and completed in the Molding Department during April.

ParticularsUnits
Flow of physical units: Molding Department 
Units in beginning inventory, April 1             2,800
Units started in April           48,200
Units in process during April           51,000
Units in ending inventory, April 30            (3,400)
Units transferred to Finishing Department in April           47,600
Units in beginning inventory, April 1            (2,800)
Units started and completed in April           44,800

(Table 1)

Therefore, the units started and completed in the Molding Department during April is 44,800.

a. 2

To determine

Compute the equivalent units of direct materials and conversion for the Molding Department in April.

a. 2

Expert Solution
Check Mark

Explanation of Solution

Compute the equivalent units of direct materials and conversion for the Molding Department in April.

ParticularsInput Resources
 Direct MaterialsConversion
To finish units in process on April 1:  
Direct materials (2,800 units require 10% to complete)                    280 
Conversion (2,800 units require 70% to complete)             1,960
To start and complete 44,800 units in April              44,800          44,800
To start units in process on April 30:  
Direct materials (3,400 units 80% complete)                2,720 
Conversion (3,400 units 20% complete)                680
Equivalent units of resources in April               47,800          47,440

 (Table 2)

Therefore, the equivalent units of direct materials and conversion for the Molding Department in April are 47,800 and 47,440.

a. 3

To determine

Calculate the cost per equivalent unit of input resource for the Molding Department during April.

a. 3

Expert Solution
Check Mark

Explanation of Solution

Calculate the cost per equivalent unit of input resource for the Molding Department during April.

ParticularsDirect Materials in $Conversion Cost in $
Cost per equivalent unit in April :  
Costs incurred by Molding Department in April (A)669,200521,840
Equivalent units in April (B)47,80047,440
Cost per equivalent unit in April (A÷B)1411

(Table 3)

Therefore, the cost per equivalent unit of input resource for the Molding Department during April is $14 per unit and $11 per unit respectively.

a. 4

To determine

Prepare journal entry to record the units transferred from the Molding Department to the Finishing Department during April.

a. 4

Expert Solution
Check Mark

Explanation of Solution

Prepare journal entry to record the transfer units from the Molding Department to the Finishing Department during April.

DateAccounts title and explanation

Debit

($)

Credit

($)

 

Work in process: Finishing Department  (4)

1,190,000 
      Work in process: Molding Department 1,190,000
 (To record the transfer of 47,600 units to the Finishing department in April)  

(Table 4)

  • Work in process: Finishing department is an asset and there is an increase in the value of an asset. Hence, debit the work in process: finishing department by $1,190,000.
  • Work in process: Molding department is an asset and there is a decrease in the value of an asset. Hence, credit the work in process: molding department by $1,190,000.

Working Notes:

Calculate the cost of beginning inventory:

Cost of beginning inventory = ( Direct materials cost carried forward from molding department during March 31)×(Conversion cost carried forward from molding department during March 31)=$33,340+$11,180=$44,520

(1)

Calculate the cost of direct materials during the month April:

Cost of direct materials during the month April} = (Units finished in process +Units started and completed)×(Cost per equivalent unit of Direct materials in April)=(280+44,800)×$14=45,080×$14=$631,120

(2)

Calculate the cost of conversion during the month April:

Cost of conversion during the month April} = (Units finished in process +Units started and completed)×(Cost per equivalent unit of conversion in April)=(1,960+44,800)×$14=46,760×$11=$514,360

(3)

Calculate the total cost of units transferred:

ParticularsAmount in $
Cost of beginning inventory, April 1 (1)44,520
April direct materials cost (2)631,120
April conversion cost (3)514,360
Total cost of units transferred1,190,000

(Table 5)

(4)

a.5

To determine

Compute the costs assigned to ending inventory in the Molding Department on April 30.

a.5

Expert Solution
Check Mark

Explanation of Solution

Compute the costs assigned to ending inventory in the Molding Department on April 30.

ParticularsAmount in $
Work in Process: Molding Department, April 30: 
Direct materials cost  (5)38,080
Conversion cost  (6)7,480
Ending inventory in process, April 3045,560

(Table 6)

Working Notes:

Calculate the cost of direct materials during the month end of April 30:

Cost of direct materials during the month April 30} = (Units started in process forthe month end April 30)×(Cost per equivalent unit of Direct materials in April)=2,720×$14=$38,080

(5)

Calculate the cost of conversion during the month end of April 30:

Cost of conversion during the month April 30} = (Units started in process forthe month end April 30)×(Cost per equivalent unit of conversion in April)=680×$11=$7,480

(6)

b. 1

To determine

Prepare a schedule showing units started and completed in the Finishing Department during April.

b. 1

Expert Solution
Check Mark

Explanation of Solution

Prepare a schedule showing units started and completed in the finishing Department during April.

ParticularsUnits
Flow of physical units: Finishing Department 
Units in beginning inventory, April 15,000
Units started in April47,600
Units in process during April52,600
Units in ending inventory, April 30(2,000)
Units transferred to Finishing Department in April50,600
Units in beginning inventory, April 1(5,000)
Units started and completed in April45,600

(Table 7)

Therefore, the units started and completed in the Finishing Department during April is 45,600

b. 2

To determine

Compute the equivalent units of direct materials and conversion for the Finishing Department in April.

b. 2

Expert Solution
Check Mark

Explanation of Solution

Financial & Managerial Accounting, Chapter 18, Problem 7AP

(Figure 4)

b. 3

To determine

Calculate the cost per equivalent unit of input resource for the Finishing Department during April.

b. 3

Expert Solution
Check Mark

Explanation of Solution

Calculate the cost per equivalent unit of input resource for the Finishing Department during April.

ParticularsInput Resources
 Molding materials  in $Direct Materials  in $Conversion in $
Cost per equivalent unit in April   
Costs charged to Finishing Department in April (A)1,190,000496,000147,600
Equivalent units in April (B)47,60049,60049,200
Cost per equivalent unit in April (A÷B)25103

(Table 8)

Note:

Total cost of Molding Department $1,190,000 is transferred to the Finishing Department in April.

b.4

To determine

Prepare journal entry to record the units transferred from the Finishing Department to Finished goods inventory during April.

b.4

Expert Solution
Check Mark

Explanation of Solution

Prepare journal entry to record the transfer of units from the Finishing Department to Finished goods inventory during April.

DateAccounts title and explanation

Debit

($)

Credit

($)

 Finished goods inventory1,922,800 
 

     Work in process: Finishing Department  (9)

 1,922,800
 (To record the transfer of 50,600 units to the Finishing goods in April)  

(Table 9)

  • Finished goods inventory is an asset and there is an increase in the value of an asset. Hence, debit the finished goods inventory by $1,922,800
  • Work in process: Molding department is an asset and there is a decrease in the value of an asset. Hence, credit the work in process: molding department by $1,922,800.

Working Notes:

Calculate the cost of beginning inventory:

Cost of beginning inventory =[ ( Molding department cost carried forward during March 31)+( Direct materials cost carried forward from finishing department during March 31)+(Conversion cost carried forward from finishing department during March 31)]=$125,000+$15,000+$6,000=$146,000

(5)

Calculate the cost of molding department during the month April:

Cost of molding department during the month April} = (Units started and completed)×(Cost per equivalent unit of molding department in April)=45,600×$25=$1,140,000

(6)

Calculate the cost of direct materials during the month April for finishing department:

Cost of direct materials during the month April} = (Units finished in process +Units started and completed)×(Cost per equivalent unit of Direct materials in April)=(3,500+45,600)×$10=49,100×$10=$491,000

(7)

Calculate the cost of conversion during the month April for finishing department:

Cost of conversion during the month April} = (Units finished in process +Units started and completed)×(Cost per equivalent unit of conversion in April)=(3,000+45,600)×$3=48,600×$3=$145,800

(8)

Calculate the total cost of units transferred:

ParticularsAmount in $
Cost of beginning inventory, April 1 (5)146,000
April molding materials (6)1,140,000
April direct materials cost (7)491,000
April conversion cost (8)145,800
Total cost of units transferred1,922,800

(Table 10)

(9)

a.5

To determine

Compute the costs assigned to ending inventory in the Finishing Department on April 30.

a.5

Expert Solution
Check Mark

Explanation of Solution

Compute the costs assigned to ending inventory in the Finishing Department on April 30.

ParticularsAmount in $
Work in Process: Finishing department, April 30: 
Molding materials (10)50,000
Direct materials cost  (11)5,000
Conversion cost  (12)1,800
Ending inventory in process, April 3056,800

(Table 11)

Working Notes:

Calculate the cost of molding materials during the month end of April 30 for finishing department:

Cost of Molding materials during the month April 30} = (Units started in process forthe month end April 30)×(Cost per equivalent unit of Molding Department in April)=2,000×$25=$50,000

(10)

Calculate the cost of direct materials during the month end of April 30 for finishing department:

Cost of direct materials during the month April 30} = (Units started in process forthe month end April 30)×(Cost per equivalent unit of Direct materials in April)=500×$10=$5,000

(11)

Calculate the cost of conversion during the month end of April 30 for finishing department:

Cost of conversion during the month April 30} = (Units started in process forthe month end April 30)×(Cost per equivalent unit of conversion in April)=600×$3=$1,800

(12)

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Chapter 18 Solutions

Financial & Managerial Accounting

Ch. 18 - 6. Taylor & Malone is a law firm. Would the...Ch. 18 - 7. Briefly explain the operation of process...Ch. 18 - 8. Some companies that use process costing simply...Ch. 18 - 9. Discuss how managers use information they...Ch. 18 - 10. Explain the term equivalent units. In a...Ch. 18 - 11. Identify various product characteristics that...Ch. 18 - 12. In a process costing system, what condition...Ch. 18 - 13. Why is the combination of direct labor and...Ch. 18 - 14. Why might the unit cost of those items started...Ch. 18 - 15. In a process costing system that uses a FIFO...Ch. 18 - BRIEF EXERCISE 18.1 Selecting Cost Accounting...Ch. 18 - BRIEF EXERCISE 18.2 Matching Cost Systems and...Ch. 18 - Prob. 3BECh. 18 - BRIEF EXERCISE 18.4 Journal Entries in Process...Ch. 18 - BRIEF EXERCISE 18.5 Computing Equivalent Units of...Ch. 18 - Prob. 6BECh. 18 - BRIEF EXERCISE 18.7 Solving for Missing...Ch. 18 - BRIEF EXERCISE 18.8 Determining Departmental...Ch. 18 - BRIEF EXERCISE 18.9 Interpreting a Production Cost...Ch. 18 - Prob. 10BECh. 18 - EXERCISE 18.1 Accounting Terminology Listed are...Ch. 18 - EXERCISE 18.2 Calculating Equivalent Units Moon...Ch. 18 - EXERCISE 18.3 Process Costing Shamrock Industries...Ch. 18 - EXERCISE 18.4 Production Cost Report Use the...Ch. 18 - EXERCISE 18.5 Computing Costs per Equivalent...Ch. 18 - EXERCISE 18.6 Process Costing with No Beginning...Ch. 18 - EXERCISE 18.7 Process Costing with No Beginning...Ch. 18 - EXERCISE 18.8 Process Costing with Beginning...Ch. 18 - EXERCISE 18.9 Process Costing with Beginning...Ch. 18 - Prob. 10ECh. 18 - EXERCISE 18.11 Process Costing through Two...Ch. 18 - Prob. 12ECh. 18 - EXERCISE 18.13 Assessing the Need for Process...Ch. 18 - EXERCISE 18.14 Interpreting Information from a...Ch. 18 - EXERCISE 18.15 Finding Missing Information for a...Ch. 18 - PROBLEM 18.1A Calculating Equivalent Units Brite...Ch. 18 - PROBLEM 18.2A Computing and Using Unit Costs One...Ch. 18 - Refer to the information from Problem...Ch. 18 - PROBLEM 18.4A Process Costing with No Beginning or...Ch. 18 - PROBLEM 18.5A Calculate Cost per Equivalent...Ch. 18 - PROBLEM 18.5A Calculate Cost per Equivalent...Ch. 18 - Prob. 7APCh. 18 - Prob. 8APCh. 18 - PROBLEM 18.1B Calculating Equivalent Units Street...Ch. 18 - PROBLEM 18.2B Computing and Using Unit Costs One...Ch. 18 - PROBLEM 18.3B Production Cost Report Refer to the...Ch. 18 - PROBLEM 18.4B Process Costing with No Beginning or...Ch. 18 - PROBLEM 18.5B Calculate Cost per Equivalent...Ch. 18 - PROBLEM 18.6B Production Cost Report Refer to the...Ch. 18 - Prob. 7BPCh. 18 - Prob. 8BPCh. 18 - Prob. 1CTCCh. 18 - CASE 18.2 Interpreting and Using Process Costing...
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