Connect Access Card For Fundamental Accounting Principles
Connect Access Card For Fundamental Accounting Principles
24th Edition
ISBN: 9781260158526
Author: John J Wild
Publisher: McGraw-Hill Education
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Chapter 20, Problem 1APSA

(1) Computation of (a) Production Costs transferred from Cutting to Stitching, (b)Production Costs Transferred from Stitching to Finished Goods and (c) Cost of goods Sold

To determine

Concept Introduction:

Production Cost Flow:

In a production unit, finished goods need to pass through a number of departments until they are ready, thus the costs incurred in each department help to understand the total cost incurred to produced the goods.

Requirement 1

To Determine:

  1. Production Cost Transferred from Cutting to Stitching
  2. Production Cost Transferred from Stitching to Finished Goods
  3. Cost of Goods Sold

(1) Computation of (a) Production Costs transferred from Cutting to Stitching, (b)Production Costs Transferred from Stitching to Finished Goods and (c) Cost of goods Sold

Expert Solution
Check Mark

Answer to Problem 1APSA

  1. Production Cost transferred from Cutting to Stitching=$61975
  2. Production Cost Transferred from Stitching to Finished Goods=$202055
  3. Cost of Goods Sold=$213905

Explanation of Solution

Explanation:

    Work In Process Inventory-Cutting
    Particulars AmountParticulars Amount
    Beginning Balance43500Production Cost Transferred to Stitching Department61975
    Direct Materials Used-Cutting21750
    Direct Labour-Cutting15600
    Factory Overhads(Budgeted)32625Ending Balance51500
    (150% of Direct Materials)
    113475 113475

Prod. Cost Trf. to Blending Department=Beg. Inv.+Direct Materials+Direct Labour+Factory Overheads-Ending Inventory

Cost of Goods Sold=$213905

Prod. Cost Trf. to Stitching Department=43500+21750+15600+32625-51500

Prod. Cost Trf. to Stitching Department=$61975

    Work in process Inventory-Stitching
    Particulars AmountParticulars Amount
    Beginning Balance63300Production Cost Transferred to Finished Goods202055
    Production Cost from Cutting Department61975
    Direct Materials Used-Stitching0
    Direct Labour-Stitching62400
    Factory Overhads(Budgeted)74880Ending Balance60500
    (120% of Direct Labour)
    262555 262555

Prod. Cost Trf. to FG=Beg. Inv.+Prod. Cost From Mixing+Direct Materials+Direct Labour+Factory Overheads-Ending Inv.

Prod. Cost Trf. to FG=63300+61975+62400+74880-60500

Prod. Cost Trf. to FG=$202055

    Particulars AmountParticulars Amount
    Beginning Balance20100Cost of Goods Sold213905
    Production Cost from Stitching Department202055
    Ending Balance8250
    222155 222155

Cost of Goods Sold=Beg. Inv.+Prod. Cost From Blending-Ending Inv.

Cost of Goods Sold=20100+202055-8250

Cost of Goods Sold=$213905

  1. Journal Entries to record the flow of cost

To determine

Concept Introduction:

Production Cost Flow:

In a production unit, finished goods need to pass through a number of departments until they are ready, thus the costs incurred in each department help to understand the total cost incurred to produced the goods.

Requirement 2

To Determine:

Journal Entries for flow of cost.

  1. Journal Entries to record the flow of cost

Expert Solution
Check Mark

Answer to Problem 1APSA

    DateParticularsDebitCredit
    31-MarRaw Material Inventory25000
    To Accounts Payable25000
    (Being Raw Materials Purchased)
    31-MarWork in Process Inventory-Cutting21750
    Work in Process Inventory-Stitching15600
    To Raw Materials Inventory37350
    (Being Raw Materials Consumed)
    31-MarFactory Overheads6000
    To Raw Materials Inventory6000
    (Being Indirect Materials Consumed)
    31-MarDirect Labour-Cutting0
    Direct Labour-Stitching62400
    To Salaries And Wages62400
    (Being Wages Charged to Cutting and Stitching)
    31-MarFactory Overheads55000
    To Salaries and Wages55000
    (Being Indirect Labour Charged to Factory Overheads)
    31-MarSalaries and Wages133000
    To Cash133000
    (Being Salaries and Wages Paid)
    31-MarFactory Overheads47000
    To Accounts Payable47000
    (Being Factory Overheads Paid)
    31-MarWork in Process Inventory-Cutting32625
    Work in Process Inventory-Stitching74880
    To Factory Overheads107505
    (Being Factory Overheads Applied)
    31-MarWork in Process Inventory-Stitching61975
    To Work in process Inventory-Cutting61975
    (Being Production cost of cutting transferred to Stitching Dept)
    31-MarWork in Process Inventory-Cutting202055
    To Finished Goods Inventory202055
    (Being Production cost of Stitching transferred to Finished Goods Inventory)
    31-MarFinished Goods Inventory213905
    To Cost of Sales213905
    (Being Cost of Goods Sold)
    31-MarAccounts Receivables256000
    To Sales256000
    (Being Sales Made)

Explanation of Solution

The above entries have been passed for respective transactions as per questions.

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Chapter 20 Solutions

Connect Access Card For Fundamental Accounting Principles

Ch. 20 - Prob. 11DQCh. 20 - Prob. 12DQCh. 20 - Prob. 13DQCh. 20 - Companies such as Apple commonly prepare a process...Ch. 20 - Prob. 15DQCh. 20 - Prob. 16DQCh. 20 - Prob. 17DQCh. 20 - How could a company manager use a process cost...Ch. 20 - Explain a hybrid costing system. Identify' a...Ch. 20 - Prob. 1QSCh. 20 - Prob. 2QSCh. 20 - Process vs. job order operations C1 For each of...Ch. 20 - Physical flow reconciliation C2 Prepare a physical...Ch. 20 - Prob. 5QSCh. 20 - A FIFO: Computing equivalent units C4 Refer to QS...Ch. 20 - Prob. 7QSCh. 20 - Prob. 8QSCh. 20 - Prob. 9QSCh. 20 - Prob. 10QSCh. 20 - Prob. 11QSCh. 20 - Prob. 12QSCh. 20 - Prob. 13QSCh. 20 - Prob. 14QSCh. 20 - Prob. 15QSCh. 20 - Prob. 16QSCh. 20 - A FIFO: Journal entry to transfer costs P4 Refer...Ch. 20 - Prob. 18QSCh. 20 - Weighted average: Assigning costs to output C3...Ch. 20 - Prob. 20QSCh. 20 - Prob. 21QSCh. 20 - Prob. 22QSCh. 20 - Recording costs of materials P1 Hotwax mates...Ch. 20 - Prob. 24QSCh. 20 - Recording costs of factory overhead P1 P3 Prepare...Ch. 20 - Recording transfer of costs to finished goods P4...Ch. 20 - Exercise 20-1 Process vs. job order operations C1...Ch. 20 - Exercise 20-2 Comparing process and job order...Ch. 20 - Prob. 3ECh. 20 - Prob. 4ECh. 20 - Prob. 5ECh. 20 - Prob. 6ECh. 20 - Prob. 7ECh. 20 - Exercise 20-8 Weighted average: Computing...Ch. 20 - Prob. 9ECh. 20 - Prob. 10ECh. 20 - Prob. 11ECh. 20 - Prob. 12ECh. 20 - Exercise 20-13A FIFO: Completing a process cost...Ch. 20 - Exercise 20-14 Production cost flow and...Ch. 20 - Exercise 20-15 Recording product costs P1 P2 P3...Ch. 20 - Prob. 16ECh. 20 - Prob. 17ECh. 20 - Prob. 18ECh. 20 - Prob. 19ECh. 20 - Prob. 20ECh. 20 - Prob. 21ECh. 20 - Exercise 20-22 Recording costs of labor P2 Prepare...Ch. 20 - Prob. 23ECh. 20 - Prob. 24ECh. 20 - Exercise 20-25 Recording cost flows in a process...Ch. 20 - Exercise 20-26 Interpretation of journal entries...Ch. 20 - Prob. 1APSACh. 20 - Prob. 2APSACh. 20 - Prob. 3APSACh. 20 - Problem 20-4A Weighted average: Process cost...Ch. 20 - Problem 20-5AA FIFO: Process cost summary:...Ch. 20 - Prob. 6APSACh. 20 - Prob. 7APSACh. 20 - Prob. 1BPSBCh. 20 - Prob. 2BPSBCh. 20 - Prob. 3BPSBCh. 20 - Prob. 4BPSBCh. 20 - Problem 20-5BA FIFO: Process cost summary;...Ch. 20 - Problem 20-6BAFIFO: Costs per equivalent unit;...Ch. 20 - Problem 20-7BA FIFO: Process cost summary,...Ch. 20 - Prob. 20SPCh. 20 - Prob. 20CPCh. 20 - Prob. 1GLPCh. 20 - Apple has entered into contracts that require the...Ch. 20 - Apple and Google work to maintain high-quality and...Ch. 20 - Prob. 3AACh. 20 - Prob. 1BTNCh. 20 - Prob. 2BTNCh. 20 - Many companies use technology to help them improve...Ch. 20 - Prob. 4BTNCh. 20 - Prob. 5BTNCh. 20 - Prob. 6BTN
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