Loose Leaf for Cost Management: A Strategic Emphasis
Loose Leaf for Cost Management: A Strategic Emphasis
8th Edition
ISBN: 9781260165180
Author: BLOCHER, Edward; Stout, David F.; Juras, Paul; Cokins, Gary
Publisher: McGraw-Hill Education
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Chapter 6, Problem 41P

1.

To determine

Calculate the equivalent units of transferred-in, direct materials and conversion using weighted average method.

1.

Expert Solution
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Explanation of Solution

Equivalents units for production: Equivalents units are a measure of the work done during an accounting period. It includes the beginning and closing inventory of work in process and they also provide information relating to work on units that are completely processed during the period

Calculate the equivalent units of transferred-in, direct materials and conversion using weighted average method.

Loose Leaf for Cost Management: A Strategic Emphasis, Chapter 6, Problem 41P , additional homework tip  1

(Table 1)

2.

To determine

Compute the unit cost of transferred-in, direct materials and conversion department.

2.

Expert Solution
Check Mark

Explanation of Solution

Compute the unit cost of transferred-in, direct materials and conversion department.

Loose Leaf for Cost Management: A Strategic Emphasis, Chapter 6, Problem 41P , additional homework tip  2

(Table 2)

3.

To determine

Determine the amount goods completed and transferred out during July.

3.

Expert Solution
Check Mark

Explanation of Solution

Compute the amount goods completed and transferred out during July.

Amount of goods completed and transferred out during July}=(Number of units completed and transferred out)×(Total cost per equivalent unit) =27,000×$13.25=$357,750

Therefore, the amount goods completed and transferred out during July is $357,750.

4.

To determine

Calculate the cost of work in process for the month of July.

4.

Expert Solution
Check Mark

Explanation of Solution

Calculate the cost of work in process of transferred-in for the month of July.

Amount of  ending WIP during July}=(Numberof units at Ending WIP in transferred -in )×(Total cost per equivalent unit of transferred-in) =5,000×$6.2500=$31,250

Calculate the cost of work in process of conversion for the month of July.

Amount of  ending WIP during July}=(Numberof units at Ending WIP in conversion )×(Total cost per equivalent unit of conversion) =2,500×$4.75=$11,875

Therefore, the cost of work in process for the month July is ($31,250+$11,875)$43,125.

5.

To determine

Prepare journal entry for the given transaction.

5.

Expert Solution
Check Mark

Explanation of Solution

Prepare journal entry to record the materials.

DateAccounts title and explanation

Debit

($)

Credit

($)

 

Work in process inventory

60,750 
      Materials inventory 60,750
 (To record the direct materials)  

(Table 3)

  • Work in process inventory is an asset and there is an increase in the value of an asset. Hence, debit the work in process inventory $60,750.
  • Materials inventory is an asset and there is a decrease in the value of an asset. Hence, credit the materials inventory by $60,750.

Prepare journal entry to record the labor assuming that labor is 50% of conversion cost.

DateAccounts title and explanation

Debit

($)

Credit

($)

 

Work in process inventory (1)

55,000 
      Accrued payroll 55,000
 (To record the direct materials)  

(Table 4)

  • Work in process inventory is an asset and there is an increase in the value of an asset. Hence, debit the work in process inventory $55,000
  • Accrued payroll is an expense and there is an increase in the value of equity. Hence, credit accrued payroll by $55,000.

Prepare journal entry to record the overhead.

DateAccounts title and explanation

Debit

($)

Credit

($)

 Work in process inventory55,000 
      Factory overhead 55,000
 (To record factory overhead costs applied to production of the period)  

(Table 5)

  • Work in process inventory is an asset and there is an increase in the value of an asset. Hence, debit the work in process inventory account with $55,000.
  • Factory overhead (Expense) is a component of stockholder’s equity and there is a decrease value of expense. Hence, credit the factory overhead account by $55,000.

Prepare journal entry to record the finished product.

DateAccounts title and explanation

Debit

($)

Credit

($)

 Finished goods inventory357,750 
      Work in process inventory 357,750
 (To transfer cost of jobs completed to  finished goods inventory)  

(Table 6)

  • Finished goods inventory is an asset and there is an increase in the value of an asset. Hence, debit the finished goods inventory account with $357,750.
  • Work in process inventory is an asset and there is a decrease in the value of an asset. Hence, credit the work in process inventory account with $357,750.

Working notes:

Calculate the amount of labor cost.

Cost of  labor = Cost of conversion×(Percentage of labor in conversion)=$110,000×50%=$55,000  …… (1)

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Chapter 6 Solutions

Loose Leaf for Cost Management: A Strategic Emphasis

Ch. 6 - Prob. 11QCh. 6 - Prob. 12QCh. 6 - Prob. 13QCh. 6 - Prob. 14QCh. 6 - Prob. 15QCh. 6 - Prob. 16QCh. 6 - Prob. 17QCh. 6 - Fill in the missing amount for each of the...Ch. 6 - Fill in the missing amount for each of the...Ch. 6 - Fill in the missing amount for each of the...Ch. 6 - Fill in the missing amount for each of the...Ch. 6 - Beginning Work-in-Process is 2,000 units; 44,000...Ch. 6 - Weighted-average costs per equivalent unit are $2...Ch. 6 - Abnormal spoilage was 100 units and normal...Ch. 6 - The abnormal spoilage is 300 units and the cost...Ch. 6 - There is no spoilage, the beginning WIP Inventory...Ch. 6 - Process costing is a good fit for companies in...Ch. 6 - Required Calculate the number of tons completed...Ch. 6 - The food-processing industry, like most process...Ch. 6 - Required Prepare a physical flow schedule and...Ch. 6 - Murray Chemical Company refines a variety of...Ch. 6 - Prob. 32ECh. 6 - Prob. 33ECh. 6 - Prob. 34ECh. 6 - Taxes R Us (TRU), an income tax preparation firm,...Ch. 6 - Required Compute the equivalent units and costs...Ch. 6 - Weatherly Lumber Company processes wood pulp for...Ch. 6 - Prob. 38PCh. 6 - Arsenio Company manufactures a single product that...Ch. 6 - Prob. 40PCh. 6 - Prob. 41PCh. 6 - Required Complete the production cost report for...Ch. 6 - Alvis Construction Supply Company has a department...Ch. 6 - Prob. 44PCh. 6 - Sanyo Corporation manufactures a popular model of...Ch. 6 - Required Prepare the production cost report of the...Ch. 6 - BDB Company manufactures its one product by a...Ch. 6 - Required Prepare a production cost report for May...Ch. 6 - APCO Company manufactures various lines of...Ch. 6 - Required Prepare the production cost report using...Ch. 6 - Healthy Selections Cereals, Inc. (HSC) is a large...Ch. 6 - Required Prepare the production cost report for...Ch. 6 - Prob. 53P
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