MANAGERIAL ACCOUNTING FUND. W/CONNECT
MANAGERIAL ACCOUNTING FUND. W/CONNECT
5th Edition
ISBN: 9781259688713
Author: Wild
Publisher: MCG
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Chapter 3, Problem 7PSA

1.

To determine

To prepare: Process cost summary.

1.

Expert Solution
Check Mark

Explanation of Solution

Prepare production cost summary:

D. Company-Roasting Department

Process Cost Summary (FIFO method)

For the month ended Oct. 31, 20XX

Particulars

Amount

($)

Amount

($)

Cost charged to Production

Cost of work in process (beginning)

Direct materials

9,900

Conversion

110,970

120,870

Cost incurred this period

Direct materials

248,400

Conversion

1,082,970

1,331,370

Total cost

1,452,240

Unit Information

Units

Units

Units to account for:

Units accounted for

Work in process (beginning)

3,000

Completed and transferred units

22,200

Unit started this period

21,600

Work in process (ending)

2,400

Total units to account for

24,600

Total units accounted for

24,600

Equivalent Unit of Production

Direct Materials

Conversion

Work in process (beginning)

0

1,800

Started and completed in this month

19,200

19,200

Work in process (ending)

2,400

1,920

Equivalent Unit of Production

21,600

22,920

Cost per EUP

Cost of work in process (beginning)

0

0

Cost incurred this period

248,400

1,082,970

Total cost

$248,400

$1,082,970

Equivalent unit of production

21,600

22,920

Cost per EUP

$11.5

$47.25

Cost Assignment

Amount

($)

Amount

($)

Cost of work in process (beginning)

120,870

Cost of completed units

Direct materials

220,800

Conversion

992,250

1,213,050

Cost of work in process (ending)

Direct materials

27,600

Conversion

90720

118,320

Total cost

2,904,480

Table(1)

Hence, total cost of transferred goods and work in process (ending) is $1,333,920 and $118,320 respectively.

Working notes:

Calculation for EUP (direct material),

    CostperEUP(directmaterial)= Totalcost Equivalentunitofproduction = $248,400 21,600 =$11.5

Calculation for EUP (Conversion),

    CostperEUP(conversion)= Totalcost Equivalentunitofproduction = $1,082,970 22,920 =$47.25

2.

To determine

To prepare: Journal entry.

2.

Expert Solution
Check Mark

Explanation of Solution

Date Account Title and Explanation Post ref Debit ($) Credit ($)
Oct 31 Work in Process-blending 1,333,920
Work in Process-roasting 1,333,920
(Being goods transferred from roasting to blendingdepartment )

Table(2)

  • Work in process-blending is an asset. Since, goods is transferred from roasting to blending department, it increases work in process-blending account. Hence, debit work in process-blending account.
  • Work in process-roasting is an asset. Since, goods is transferred from roasting to blending department, it decreases work in process-roasting account. Hence, credit work in process-roasting account.

3.

To determine

To explain: Effect on bonus from the underestimation of equivalent unit of production.

3.

Expert Solution
Check Mark

Explanation of Solution

If the equivalent unit of production is understated then it will increase the cost per equivalent unit of production because cost per equivalent unit of production is get by dividing total cost from equivalent unit of production.

  • Since, cost per equivalent unit of production is increased, it will reduce the bonus of the department manager because higher the cost per equivalent unit of production lower will be the bonus and vice versa.
  • If equivalent unit of production is lower in this month then next month equivalent unit of production will increase and this will decrease the cost per equivalent unit of production. Hence, it will increase the bonus of department manager in the next month.

Hence, it will reduce the October bonus and will increase the November bonus.

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Chapter 3 Solutions

MANAGERIAL ACCOUNTING FUND. W/CONNECT

Ch. 3 - Prob. 6DQCh. 3 - Prob. 7DQCh. 3 - Prob. 8DQCh. 3 - Prob. 9DQCh. 3 - Prob. 10DQCh. 3 - Prob. 11DQCh. 3 - Prob. 12DQCh. 3 - Prob. 13DQCh. 3 - 14. APPLE Companies such as Apple commonly...Ch. 3 - Prob. 15DQCh. 3 - Prob. 16DQCh. 3 - Process vs. job order operations C1 For each of...Ch. 3 - Prob. 2QSCh. 3 - Prob. 3QSCh. 3 - The following refers to units processed in...Ch. 3 - Prob. 5QSCh. 3 - Prob. 6QSCh. 3 - Prob. 7QSCh. 3 - Prob. 8QSCh. 3 - Prob. 9QSCh. 3 - Prob. 10QSCh. 3 - Prob. 11QSCh. 3 - Prob. 12QSCh. 3 - Prob. 13QSCh. 3 - Prob. 14QSCh. 3 - Prob. 15QSCh. 3 - Prob. 16QSCh. 3 - Prob. 17QSCh. 3 - Prob. 18QSCh. 3 - Prob. 19QSCh. 3 - Prob. 20QSCh. 3 - Prob. 21QSCh. 3 - Prob. 22QSCh. 3 - Prob. 23QSCh. 3 - Prob. 24QSCh. 3 - Prob. 25QSCh. 3 - Prob. 26QSCh. 3 - Prob. 27QSCh. 3 - For each of the following products and services,...Ch. 3 - Prob. 2ECh. 3 - Prob. 3ECh. 3 - Prob. 4ECh. 3 - Prob. 5ECh. 3 - Prob. 6ECh. 3 - Prob. 7ECh. 3 - During April, the production department of a...Ch. 3 - Prob. 9ECh. 3 - Prob. 10ECh. 3 - Prob. 11ECh. 3 - Prob. 12ECh. 3 - Exercise 16-13AFIFO: Completing a process cost...Ch. 3 - Prob. 14ECh. 3 - Prob. 15ECh. 3 - Prob. 16ECh. 3 - Prob. 17ECh. 3 - RSTN Co. produces its product through two...Ch. 3 - Prob. 19ECh. 3 - Prob. 20ECh. 3 - Prob. 21ECh. 3 - Prob. 22ECh. 3 - Prob. 23ECh. 3 - Prob. 24ECh. 3 - Prob. 25ECh. 3 - Prob. 26ECh. 3 - Prob. 27ECh. 3 - Prob. 1PSACh. 3 - Victory Company uses weighted-average process...Ch. 3 - Prob. 3PSACh. 3 - Prob. 4PSACh. 3 - Prob. 5PSACh. 3 - Prob. 6PSACh. 3 - Prob. 7PSACh. 3 - Prob. 1PSBCh. 3 - Prob. 2PSBCh. 3 - Braun Company produces its product through a...Ch. 3 - Problem 16-4B Weighted average: Process cost...Ch. 3 - Prob. 5PSBCh. 3 - Prob. 6PSBCh. 3 - Prob. 7PSBCh. 3 - (This serial problem began in Chapter 1 and...Ch. 3 - Prob. 3CPCh. 3 - Prob. 1GLPCh. 3 - Apple reports in notes to its financial statements...Ch. 3 - Prob. 2BTNCh. 3 - Prob. 3BTNCh. 3 - Prob. 4BTNCh. 3 - Prob. 5BTNCh. 3 - Prob. 6BTNCh. 3 - Prob. 7BTNCh. 3 - Prob. 8BTNCh. 3 - Prob. 9BTN
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