Financial & Managerial Accounting
Financial & Managerial Accounting
18th Edition
ISBN: 9781259692406
Author: Jan Williams, Susan Haka, Mark S Bettner, Joseph V Carcello
Publisher: McGraw-Hill Education
bartleby

Concept explainers

bartleby

Videos

Question
Book Icon
Chapter 18, Problem 8AP

a.1

To determine

Prepare a schedule showing units started and completed in the forging department during July.

a.1

Expert Solution
Check Mark

Explanation of Solution

Prepare a schedule showing units started and completed in the forging department during July as follows:

Flow of Physical units: Forging Department
ParticularsUnits
Beginning work in process inventory5,000
Add: units started75,000
Units in process80,000
Less: Ending work in process invnetory8,000
Units transferred to assembly department72,000
Less: beginning work in process inventory5,000
Units started and completed67,000

Table (1)

2.

To determine

Compute the equivalent units of direct materials and conversion for the forging department during July.

2.

Expert Solution
Check Mark

Explanation of Solution

Prepare a schedule showing units started and completed in the forging department during July as follows:

ParticularsDirect materialsConversion
Beginning work in process inventory0         3,000
Units start and complete               67,000       67,000
Ending work in process inventory                 8,000         6,000
Equivalent units of production               75,000       76,000

Table (2)

Working note:

Financial & Managerial Accounting, Chapter 18, Problem 8AP , additional homework tip  1

Figure (1)

3.

To determine

Identify the cost per equivalent unit of input resource for the forging department during July.

3.

Expert Solution
Check Mark

Explanation of Solution

Identify the cost per equivalent unit of input resource for the forging department during July as follows:

ParticularsDirect materialsConversion
Cost incurred by Forging department (A)$675,000$608,000
Equivalent units (B)75,00076,000
Cost per equivalent unit (A ÷ B)$9$8

Table (3)

4.

To determine

Prepare the journal entry to transfer units from Forging department to the assembly department during July.

4.

Expert Solution
Check Mark

Explanation of Solution

Prepare the journal entry to transfer units from Forging department to the assembly department during July as follows:

Account titles and ExplanationDebitCredit
Work in process inventory - Assembly department$1,224,000
     Work in process inventory - Forging department$1,224,000
(To record transfer of 72,000 units to the assembly department)

Table (4)

Working note:

Calculate total unit cost transferred.

ParticularsAmount
Beginning work in process inventory ($45,000 +$16,000)$61,000
Add: Start and complete cost:
Materials (67,000 units × $9)$603,000
Conversion (70,000 units × $8)$560,000
Total cost of units transferred$1,224,000

Table (5)

  • Work in process inventory – Assembly department is a current asset, and it is increased. Therefore, debit work in process inventory account for $1,224,000.
  • Work in process inventory – Forging department is a current asset, and it is decreased. Therefore, credit work in process inventory –Forging department account for $1,224,000.

5.

To determine

Compute cost assigned to ending inventory in the forging department on July 31.

5.

Expert Solution
Check Mark

Explanation of Solution

Compute cost assigned to ending inventory in the forging department on July 31 as follows:

Ending work in process inventory = Direct materials + Conversion=(8,000 units ×$9)+(6,000units×$8)=$72,000+$48,000=$120,000

b.1

To determine

Prepare a schedule showing units started and completed in the assembly department during July.

b.1

Expert Solution
Check Mark

Explanation of Solution

Flow of Physical units: Assembly Department
ParticularsUnits
Beginning work in process inventory4,000
Add: units started72,000
Units in process76,000
Less: Ending work in process inventory16,000
Units transferred to assembly department60,000
Less: beginning work in process inventory4,000
Units started and completed56,000

Table (6)

2.

To determine

Compute equivalent units of direct materials and conversion for the assembly department in July.

2.

Expert Solution
Check Mark

Explanation of Solution

Compute equivalent units of direct materials and conversion for the assembly department in July as follows:

ParticularsDirect materialsConversion
Beginning work in process inventory                   4,000                    3,000
Units start and complete                 56,000                  56,000
Ending work in process inventory                         -                      4,800
Equivalent units of production                 60,000                  63,800

Table (7)

Working note:

Financial & Managerial Accounting, Chapter 18, Problem 8AP , additional homework tip  2

Figure (2)

3.

To determine

Compute equivalent cost per unit of input resource for the assembly department during July.

3.

Expert Solution
Check Mark

Explanation of Solution

Compute equivalent cost per unit of input resource for the assembly department during July as follows:

ParticularsDirect materialsConversion
Cost incurred by  department (A)$720,000$191,400
Equivalent units (B)60,00063,800
Cost per equivalent unit (A ÷ B)$12$3

Table (8)

4.

To determine

Prepare journal entry to record transfer units from the assembly department to finished goods inventory during July.

4.

Expert Solution
Check Mark

Explanation of Solution

Prepare journal entry to record transfer units from the assembly department to finished goods inventory during July as follows:

Account titles and ExplanationDebitCredit
Work in process inventory - Assembly department$1,920,000
     Work in process inventory - Forging department$1,920,000
(To record transfer of 72,000 units to the assembly department)

Table (9)

Working note:

Calculate total unit cost transferred.

ParticularsAmount
Beginning work in process inventory ($68,000 +$3,000)$71,000
Add: Start and complete cost:
Materials (60,000 units × $12)$720,000
July forging materials (56,000 units × $17)$952,000
Conversion (59,000 units × $3)$117,000
Total cost of units transferred$1,920,000

Table (10)

  • Finished goods inventory is a current asset, and it is increased. Therefore, debit finished goods inventory account for $1,920,000.
  • Work in process inventory – Assembly department is a current asset, and it is decreased. Therefore, credit work in process inventory –Assembly department account for $1,920,000.

5.

To determine

Compute the cost assigned to ending inventory in the assembly department.

5.

Expert Solution
Check Mark

Explanation of Solution

Compute cost assigned to ending inventory in the forging department on July 31 as follows:

Ending work in process inventory = Direct materials (forging) + Conversion=(16,000 units ×$7)+(4,800units×$3)=$272,000+$14,400=$286,400

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Chapter 18 Solutions

Financial & 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...
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
Cost Accounting - Definition, Purpose, Types, How it Works?; Author: WallStreetMojo;https://www.youtube.com/watch?v=AwrwUf8vYEY;License: Standard YouTube License, CC-BY