Financial Accounting
Financial Accounting
18th Edition
ISBN: 9781260706307
Author: Jan Williams
Publisher: Mcgraw-hill Higher Education (us)
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Chapter 18, Problem 8BP

a.1

To determine

Prepare a schedule showing units started and completed in the Assembly department during March.

a.1

Expert Solution
Check Mark

Explanation of Solution

Prepare a schedule showing units started and completed in the assembly department during March as follows:

Flow of Physical units: Assembly Department
ParticularsUnits
Beginning work in process inventory5,000
Add: units started80,000
Units in process85,000
Less: Ending work in process inventory9,000
Units transferred to assembly department76,000
Less: beginning work in process inventory5,000
Units started and completed71,000

Table (1)

2.

To determine

Compute the equivalent units of direct materials and conversion for the Assembly department during March.

2.

Expert Solution
Check Mark

Explanation of Solution

Prepare a schedule showing units started and completed in the forging department during March as follows:

ParticularsDirect materialsConversion
Beginning work in process inventory0         3,500
Units start and complete               71,000       71,000
Ending work in process inventory                 9,000         7,200
Equivalent units of production               80,000       81,700

Table (2)

Working note:

Financial Accounting, Chapter 18, Problem 8BP , additional homework tip  1

Figure (1)

3.

To determine

Identify the cost per equivalent unit of input resource for the assembly department during March.

3.

Expert Solution
Check Mark

Explanation of Solution

Identify the cost per equivalent unit of input resource for the assembly department during March as follows:

ParticularsDirect materialsConversion
Cost incurred by Forging department (A)$720,000$490,200
Equivalent units (B)80,00081,700
Cost per equivalent unit (A ÷ B)$9$6

Table (3)

4.

To determine

Prepare the journal entry to transfer units from Assembly department to the assembly department during March.

4.

Expert Solution
Check Mark

Explanation of Solution

Prepare the journal entry to transfer units from Assembly department to the assembly department during March as follows:

Account titles and ExplanationDebitCredit
Work in process inventory - Packaging department$1,140,000
     Work in process inventory - assembly department$1,140,000
(To record transfer of 76,000 units to the packaging department)

Table (4)

Working note:

Calculate total unit cost transferred.

ParticularsAmount
Beginning work in process inventory ($45,000 +$9,000)$54,000
Add: Start and complete cost:
Materials (71,000 units × $9)$639,000
Conversion (74,500 units × $6)$447,000
Total cost of units transferred$1,140,000

Table (5)

  • Work in process inventory – packaging department is a current asset, and it is increased. Therefore, debit work in process inventory account – packaging department for $1,140,000.
  • Work in process inventory – assembly department is a current asset, and it is decreased. Therefore, credit work in process inventory –assembly department account for $1,140,000.

5.

To determine

Compute cost assigned to ending inventory in the forging department on March 31.

5.

Expert Solution
Check Mark

Explanation of Solution

Compute cost assigned to ending inventory in the forging department on March 31 as follows:

Ending work in process inventory = Direct materials + Conversion=(9,000 units ×$9)+(7,200units×$6)=$81,000+$43,200=$124,200

b.1

To determine

Prepare a schedule showing units started and completed in the packaging department during March.

b.1

Expert Solution
Check Mark

Explanation of Solution

Flow of Physical units: Packaging Department
ParticularsUnits
Beginning work in process inventory4,000
Add: units started76,000
Units in process80,000
Less: Ending work in process inventory20,000
Units transferred to assembly department60,000
Less: beginning work in process inventory4,000
Units started and completed56,000

Table (6)

2.

To determine

Compute equivalent units of direct materials and conversion for the packaging department in March.

2.

Expert Solution
Check Mark

Explanation of Solution

Compute equivalent units of direct materials and conversion for the packaging department in March as follows:

ParticularsDirect materialsConversion
Beginning work in process inventory                   4,000                    3,200
Units start and complete                 56,000                  56,000
Ending work in process inventory                         -                      6,000
Equivalent units of production                 60,000                  65,200

Table (7)

Working note:

Financial Accounting, Chapter 18, Problem 8BP , additional homework tip  2

Figure (2)

3.

To determine

Compute equivalent cost per unit of input resource for the packaging department during March.

3.

Expert Solution
Check Mark

Explanation of Solution

Compute equivalent cost per unit of input resource for the packaging department during March as follows:

ParticularsDirect materialsConversion
Cost incurred by  department (A)$840,000$260,800
Equivalent units (B)60,00065,200
Cost per equivalent unit (A ÷ B)$14$4

Table (8)

4.

To determine

Prepare journal entry to record transfer units from the assembly department to finished goods inventory during March.

4.

Expert Solution
Check Mark

Explanation of Solution

Prepare journal entry to record transfer units from the assembly department to finished goods inventory during March as follows:

Account titles and ExplanationDebitCredit
Finished goods inventory$1,980,000
     Work in process inventory - packaging department$1,980,000
(To record transfer of 60,000 units to the assembly department)

Table (9)

Working note:

Calculate total unit cost transferred.

ParticularsAmount
Beginning work in process inventory ($60,000 +$3,200)$63,200
Add: Start and complete cost:
Materials (60,000 units × $14)$840,000
March forging materials (56,000 units × $15)$840,000
Conversion (59,200 units × $4)$236,800
Total cost of units transferred$1,980,000

Table (10)

  • Finished goods inventory is a current asset, and it is increased. Therefore, debit finished goods inventory account for $1,980,000.
  • Work in process inventory – packaging department is a current asset, and it is decreased. Therefore, credit work in process inventory – packaging department account for $1,920,000.

5.

To determine

Compute the cost assigned to ending inventory in the packaging department.

5.

Expert Solution
Check Mark

Explanation of Solution

Compute cost assigned to ending inventory in the packaging department on March 31 as follows:

Ending work in process inventory = Direct materials (assembly) + Conversion=(20,000 units ×$15)+(6,000units×$4)=$300,000+$24,000=$324,000

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Chapter 18 Solutions

Financial 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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