Chap004 (dragged) 1 - in the production sequence:...

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McGraw-Hill/Irwin ¤ 2005 The McGraw-Hill Companies, Inc. 4 - 2 Solutions Manual 4-6 The following four steps are used in process costing: (a) Analysis of physical flow of units: All of the units in the beginning and ending inventories, those started during the period, and those transferred out to finished goods are accounted for. (b) Calculation of equivalent units: The equivalent units of activity are computed for direct material and for conversion. (c) Computation of unit costs: The costs per equivalent unit for direct material and conversion are computed. (d) Analysis of total costs: The cost of the goods completed and transferred out and the cost of the ending work-in-process inventory are determined. 4-7 (a) Journal entry to enter direct-material costs into Work-in-Process Inventory account: Work-in-Process Inventory: Department A. ................... XXX R a w - M a t e r i a l I n ventory. ......................................... X X X (b) Journal entry to record transfer of goods from the first to the second department
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Unformatted text preview: in the production sequence: Work-in-Process Inventory: Department B. ................... XXX W o r k-i n-P r o c e s s I n v e n t o r y : D e p a r t m e n t A . . . . . . . . . X X X 4-8 Transferred-in costs are the costs assigned to partially completed products that have been transferred from one production department into the next department. 4-9 The $182,000 of transferred-in costs were incurred prior to January 1 and in the mixing department. The costs must have been incurred prior to January 1, because they are included in the cost of the beginning work-in-process inventory on that date. Moreover, these costs must have been incurred in the mixing department, because they have been transferred into the cooking department. 4-10 The name ''weighted-average method'' comes from the fact that the cost per equivalent unit computed under this method is a weighted average of costs incurred during the current period and costs incurred during prior periods....
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