Fundamental Accounting Principles
Fundamental Accounting Principles
24th Edition
ISBN: 9781259916960
Author: Wild, John J., Shaw, Ken W.
Publisher: Mcgraw-hill Education,
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Chapter 20, Problem 1BPSB

(1) Computation of (a) Production Costs transferred from Mixing to Blending, (b)Production Costs Transferred from Blending 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 Mixing to Blending
  2. Production Cost Transferred from Blending to Finished Goods
  3. Cost of Goods Sold

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

Expert Solution
Check Mark

Answer to Problem 1BPSB

  1. Production Cost transferred from Mixing to Blending=$263000
  2. Production Cost Transferred from Blending to Finished Goods=$388488
  3. Cost of Goods Sold=$408438

Explanation of Solution

Explanation:

    Work In Process Inventory-Mixing
    Particulars AmountParticulars Amount
    Beginning Balance156000Production Cost Transferred to Blending Department263000
    Direct Materials Used-Mixing174000
    Direct Labour-Mixing52500
    Factory Overhads(Budgeted)130500Ending Balance250000
    (75% of Direct Materials)
    513000 513000

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

Prod. Cost Trf. to Blending Department=156000+174000+52500+130500-250000

Prod. Cost Trf. to Blending Department=$236000

    Work in process Inventory-Blending
    Particulars AmountParticulars Amount
    Beginning Balance160000Production Cost Transferred to Finished Goods388488
    Production Cost from Mixing Department263000
    Direct Materials Used-Blending44000
    Direct Labour-Blending74680
    Factory Overhads(Budgeted)44808Ending Balance198000
    (60% of Direct Labour)
    586488 586488

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

Prod. Cost Trf. to FG=160000+236000+44000+74680+44808-198000

Prod. Cost Trf. to FG=$388488

    Finished Goods Invnetory
    Particulars AmountParticulars Amount
    Beginning Balance80200Cost of Goods Sold408438
    Production Cost from Blending Department388488
    Ending Balance60250
    468688 468688

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

Cost of Goods Sold=80200+388488-60250

.Cost of Goods Sold=$408438

  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 1BPSB

    DateParticularsDebitCredit
    31-MarRaw Material Inventory212000
    To Accounts Payable212000
    (Being Raw Materials Purchased)
    31-MarWork in Process Inventory-Mixing174000
    Work in Process Inventory-Blending44000
    To Raw Materials Inventory218000
    (Being Raw Materials Consumed)
    31-MarFactory Overheads41200
    To Raw Materials Inventory41200
    (Being Indirect Materials Consumed)
    31-MarDirect Labour-Mixing52500
    Direct Labour-Blending74680
    To Salaries And Wages127180
    (Being Wages Charged to Mixing and Blending)
    31-MarFactory Overheads69500
    To Salaries and Wages69500
    (Being Indirect Labour Charged to Factory Overheads)
    31-MarSalaries and Wages196680
    To Cash196680
    (Being Salaries and Wages Paid)
    31-MarFactory Overheads64660
    To Accounts Payable64660
    (Being Factory Overheads Paid)
    31-MarWork in Process Inventory-Mixing130500
    Work in Process Inventory-Blending44808
    To Factory Overheads175308
    (Being Factory Overheads Applied)
    31-MarWork in Process Inventory-Blending263000
    To Work in process Inventory-Mixing263000
    (Being Production cost of mixing transferred to Blending Dept)
    31-MarWork in Process Inventory-Mixing388488
    To Finished Goods Inventory388488
    (Being Production cost of Blending transferred to Finished Goods Inventory)
    31-MarFinished Goods Inventory408438
    To Cost of Sales408438
    (Being Cost of Goods Sold)
    31-MarAccounts Receivables490000
    To Sales490000
    (Being Sales Made)

Explanation of Solution

Explanation:

The entries as have been passed as per transactions specified in the question as on 31 Mar.

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Chapter 20 Solutions

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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