Ch20FAP19e (Problems B) - Chapter 20 Process Cost...

This preview shows page 1 - 6 out of 14 pages.

Chapter 20 - Process Cost Accounting Chapter 20 Process Cost Accounting PROBLEM SET B Problem 20-1B (45 minutes) Part 1: Cost of goods transferred and cost of goods sold Beginning goods in process inventory ...................................... $ 117,000 Direct materials used in production ........................................... 90,000 Direct labor used in production .................................................. 262,500 Overhead applied (75% of direct labor cost) .............................. 196,875 Total production costs ................................................................ 666,375 Less ending goods in process inventory ................................... (187,500 ) Transferred to finished goods inventory (a) .............................. $478,875 Beginning finished goods inventory ......................................... $ 120,000 Plus goods transferred from production ................................... 478,875 Goods available for sale ............................................................. 598,875 Less ending finished goods inventory ....................................... (148,500 ) Cost of goods sold (b) ................................................................ $450,375 Part 2: Summary journal entries recording transactions. a. June 30 Raw Materials Inventory .............................. 150,000 Accounts Payable ................................... 150,000 Purchased raw materials. b. June 30 Goods in Process Inventory ......................... 90,000 Raw Materials Inventory .......................... 90,000 Used direct materials. 20-1
Chapter 20 - Process Cost Accounting c. June 30 Factory Overhead ......................................... 31,500 Raw Materials Inventory ......................... 31,500 Used indirect materials. 20-2
Chapter 20 - Process Cost Accounting Problem 20-1B (Continued ) d. June 30 Factory Payroll ............................................. 300,000 Cash ......................................................... 300,000 Incurred payroll cost. e. June 30 Goods in Process Inventory ......................... 262,500 Factory Payroll ........................................ 262,500 Used direct labor. f. June 30 Factory Overhead ......................................... 37,500 Factory Payroll ........................................ 37,500 Used indirect labor. g. June 30 Factory Overhead ......................................... 127,875 Other Accounts ....................................... 127,875 Incurred other overhead costs. h. June 30 Goods in Process Inventory ......................... 196,875 Factory Overhead .................................... 196,875 Applied overhead at 75% of direct labor cost. i. June 30 Finished Goods Inventory ............................. 478,875 Goods in Process Inventory .................... 478,875 Transferred completed products from production to finished goods inventory. j. June 30 Accounts Receivable .................................... 750,000 Sales ........................................................ 750,000 Sold finished goods. June 30 Cost of Goods Sold ...................................... 450,375 Finished Goods Inventory ...................... 450,375 To record cost of goods sold for June. 20-3
Chapter 20 - Process Cost Accounting Problem 20-2B (50 minutes) Part 1 (a) and (b) Equivalent units with respect to direct materials and direct labor Direct Direct Equivalent units of production Materials Labor Units completed & transferred out ..................... 40,000 40,000 Units of ending goods in process ...................... Direct materials (4,000 x 100%) .................... 4,000 Direct labor (4,000 x 25%) ............................. ______ 1,000 Equivalent units of production ........................... 44,000 41,000 Part 2 Cost per equivalent unit of production Direct Materials Direct Labor Costs of beginning goods in process ..... $ 116,000 $ 172,800 Costs incurred this period ....................... 1,424,000 3,960,000 Total costs ................................................ $1,540,000 $4,132,800 ÷ Equivalent units of production ............. 44,000 EUP 41,000 EUP Cost per equivalent unit of production... $35.00 per EUP $100.80 per EUP Part 3: Assigning product costs to units Costs transferred out Direct materials (40,000 EUP x $35.00 per EUP) ....................................................................... $1,400,000 Direct labor (40,000 EUP x $100.80 per EUP) .... 4,032,000 Total costs transferred out ................................. $5,432,000 Cost of ending goods in process Direct materials (4,000 EUP x $35.00 per EUP). 140,000 Direct labor (1,000 EUP x $100.80 per EUP) ...... 100,800 Total costs of ending goods in process ............ 240,800 Total costs accounted for* ................................... $5,672,800 *This equals the sum of the total direct materials cost and the total direct labor costs ($1,540,000 + $4,132,800 = $5,672,800). 20-4
Chapter 20 - Process Cost Accounting Problem 20-2B (Concluded ) Part 4 MEMORANDUM TO: FROM: DATE: RE: Percentage of Completion Error Analysis If the units in ending inventory are actually 75% complete instead of 30% with respect to labor, the number of equivalent units in ending inventory

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture