Sharma Company has three process departments: Mixing, Encapsulating, and Bottling. At the beginning of the year, there were no work-in-process or finished goods inventories. The following data are available for the month of July: Department Manufacturing Costs Added* Ending Work in Process Mixing $93,760 $21,930 Encapsulating 80,240 19,380 Bottling 72,790 2,950 *Includes only the direct materials, direct labor, and the overhead used to process the partially finished goods received from the prior department. The transferred-in cost is not included. Required: Question Content Area 1. Prepare journal entries that show the transfer of costs (a) from Mixing to Encapsulating, (b) from Encapsulating to Bottling, and (c) from Bottling to finished goods inventory. a. Work in Process-Mixing Work in Process-Encapsulating b. Work in Process-Encapsulating Work in Process-Bottling c. Work in Process-Bottling Finished Goods As the work is finished in a process (department), the partially completed units and all their associated costs are transferred to the next process (department) by debiting the WIP account of the process receiving the unit and crediting the WIP account of the transferring process (department). Question Content Area 2. Post the entries made in Requirement 1 into the T-accounts below. The costs added from the data provided have been entered in the T-accounts. WIP—Mixing 93,760 fill in the blank df8cd7f2dfa7064_1 21,930 WIP—Encapsulating fill in the blank df8cd7f2dfa7064_2 fill in the blank df8cd7f2dfa7064_3 80,240 19,380 WIP—Bottling fill in the blank df8cd7f2dfa7064_4 fill in the blank df8cd7f2dfa7064_5 72,790 2,950 Finished Goods fill in the blank df8cd7f2dfa7064_6
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Sharma Company has three process departments: Mixing, Encapsulating, and Bottling. At the beginning of the year, there were no work-in-process or finished goods inventories. The following data are available for the month of July:
Department |
Manufacturing Costs Added* |
Ending Work in Process |
||
|---|---|---|---|---|
| Mixing | $93,760 | $21,930 | ||
| Encapsulating | 80,240 | 19,380 | ||
| Bottling | 72,790 | 2,950 |
*Includes only the direct materials, direct labor, and the
Required:
Question Content Area
1. Prepare
| a. |
|
Work in Process-Mixing | |
|
|
Work in Process-Encapsulating | ||
| b. |
|
Work in Process-Encapsulating | |
|
|
Work in Process-Bottling | ||
| c. |
|
Work in Process-Bottling | |
|
|
Finished Goods |
As the work is finished in a process (department), the partially completed units and all their associated costs are transferred to the next process (department) by debiting the WIP account of the process receiving the unit and crediting the WIP account of the transferring process (department).
Question Content Area
2.
| WIP—Mixing | |||
|---|---|---|---|
| 93,760 | fill in the blank df8cd7f2dfa7064_1 | ||
| 21,930 |
| WIP—Encapsulating | |||
|---|---|---|---|
| fill in the blank df8cd7f2dfa7064_2 | fill in the blank df8cd7f2dfa7064_3 | ||
| 80,240 | |||
| 19,380 |
| WIP—Bottling | |||
|---|---|---|---|
| fill in the blank df8cd7f2dfa7064_4 | fill in the blank df8cd7f2dfa7064_5 | ||
| 72,790 | |||
| 2,950 |
| Finished Goods | |||
|---|---|---|---|
| fill in the blank df8cd7f2dfa7064_6 |
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
