Connect Access Card for Financial and Managerial Accounting
Connect Access Card for Financial and Managerial Accounting
18th Edition
ISBN: 9781260006476
Author: Jan Williams, Susan Haka, Mark S Bettner, Joseph V Carcello
Publisher: McGraw-Hill Education
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Chapter 18, Problem 12E

a.

To determine

Compute the number of sheets started by the Pressing Department in June.

a.

Expert Solution
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Explanation of Solution

Process Costing:

It is a method of cost accounting used by an enterprise with processes categorised by continuous production. The cost for manufacturing those products are assigned to the manufacturing department before the averaged over units are being produced.

Compute the number of sheets started by the Pressing Department in June.

ParticularsUnits
Units transferred to the Painting Department in June            1,500
Add: Ending inventory in Pressing Department, June 30  500
Total units in process during June            2,000
Less: Beginning inventory in Pressing Department, June 1 (300)
Units started by Pressing Department in June1,700

(Table 1)

Therefore, the number of sheets started by the Pressing Department in June is 1,700 units.

b.

To determine

Compute the number of units started and completed by the Pressing Department in June.

b.

Expert Solution
Check Mark

Explanation of Solution

Compute the number of units started and completed by the Pressing Department in June.

ParticularsUnits
Units transferred to the Painting Department in June1,500
Units in beginning inventory in Pressing Department, June 1(300)
Units started and completed by Pressing Department in June1,200

(Table 2)

Therefore, the units started and completed by the pressing department during the month June is 1,200 units respectively.

c.

To determine

Compute the equivalent units of input resources for the Pressing Department in June.

c.

Expert Solution
Check Mark

Explanation of Solution

Compute the equivalent units of input resources for the Pressing Department in June.

ParticularsInput Resources
 Direct MaterialsConversion
To finish beginning inventory in process on June1:  
Direct materials (300 units require 0% to complete)0 
Conversion (300 units require 80% to complete) 240
To start and complete 1,200 units in June1,2001,200
To start ending  inventory in process on  June 31:  
Direct materials (500 units 100% complete)500 
Conversion (500 units 40% complete) 200
Equivalent units of resources in June1,7001,640

 (Table 3)

Therefore, the equivalent units of input resources for the Pressing Department in June are 1,700 and 1,640 units respectively

d.

To determine

Compute the cost per equivalent unit of input resource for the Pressing Department in June.

d.

Expert Solution
Check Mark

Explanation of Solution

Compute the cost per equivalent unit of input resource for the Cutting Department in June.

Connect Access Card for Financial and Managerial Accounting, Chapter 18, Problem 12E

(Figure 1)

Therefore, the cost per equivalent unit of input resource for the Pressing Department for the month of June is $15 and $25 per unit respectively.

e.

To determine

Prepare journal entry to transfer pressed sheets from the Pressing Department to the Painting Department in June.

e.

Expert Solution
Check Mark

Explanation of Solution

Prepare journal entry to transfer pressed sheets from the Pressing Department to the Painting Department in June.

DateAccounts title and explanation

Debit

($)

Credit

($)

 

Work in process: Pressing Department  (3)

60,000 
      Work in process: Painting Department 60,000
 (To record the transfer of 1,500 units to the  painting department in June  )  

(Table 4)

  • Work in process: Pressing department is an asset and there is an increase in the value of an asset. Hence, debit the work in process: pressing department by $60,000.
  • Work in process: Painting department is an asset and there is a decrease in the value of an asset. Hence, credit the work in process: painting department by $60,000.

Working Notes:

Calculate the cost of direct materials during the month June:

Cost of direct materials during the month June} = (Units started and completed)×(Cost per equivalent unit of Direct materials in June)=1,200×$15=$18,000

(1)

Calculate the cost of conversion during the month June:

Cost of conversion during the month June} = (Units finished in process +Units started and completed)×(Cost per equivalent unit of conversion in June)=(240+1,200)×$25=1,440×$25=$36,000

(2)

Calculate the total cost of units transferred:

ParticularsAmount in $
Cost of beginning inventory, June16,000
June direct materials cost (1)18,000
June conversion cost (2)36,000
Total cost of units transferred in June60,000

(Table 5)

(3)

f.

To determine

Calculate the total cost assigned to the Pressing Department’s ending inventory on June 30.

f.

Expert Solution
Check Mark

Explanation of Solution

Calculate the total cost assigned to the Pressing Department’s ending inventory on June 30.

ParticularsAmount in $
Work in Process: Cutting department, May 31: 
Direct materials cost  (4)7,500
Conversion cost  (5)5,000
Ending inventory in process, May 3112,500

(Table 6)

Therefore, the total cost assigned to the Pressing Department’s ending inventory on June 30 is $12,500.

Working Notes:

Calculate the cost of direct materials during the month end of June 30 for pressing department:

Cost of direct materials during the month June 30} = (Units started in process forthe month end June 30 )×(Cost per equivalent unit of Direct materials in June )=500×$15=$7,500

(4)

Calculate the cost of conversion during the month end of June 30 for pressing department:

Cost of conversion during the month June 30} = (Units started in process forthe month end June 30)×(Cost per equivalent unit of conversion in June)=200×$25=$5,000

(5)

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Chapter 18 Solutions

Connect Access Card for Financial and Managerial 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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Relevant Costing Explained; Author: Kaplan UK;https://www.youtube.com/watch?v=hnsh3hlJAkI;License: Standard Youtube License