Managerial Accounting 1B Ch16

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Managerial Accounting 1B

Financial
and Managerial Accounting

Chapter 16

1.Exercise 16-6
Recording cost flows in a process cost system L.O. P1, P2, P3, P4






Lowes Lumber produces bagged bark
for use in landscaping. Production involves packaging bark chips in plastic
bags in a bagging department. The following information describes production
operations for October.





































Bagging
Department



Direct materials used



$



230,000





Direct labor used



$



38,000





Predetermined overhead
rate (based on direct labor)





120



%



Goods transferred from
bagging to finished goods



$



(203,500



)











The company’s revenue for the
month totaled $450,000 from credit sales, and its cost of goods sold for the
month is $250,000.








(1)



Prepare journal entry dated
October 31 to record its October production activities for direct material
usage.
(Omit the “$” sign in your
response.)








(2)



Prepare journal entry dated
October 31 to record its October production activities for direct labor
usage.
(Omit the “$” sign in your
response.)








(3)



Prepare journal entry dated
October 31 to record its October production activities for overhead
allocation.
(Omit the “$” sign in your
response.)








(4)



Prepare journal entry dated
October 31 to record its October production activities for goods transfer
from production to finished goods.
(Omit the
“$” sign in your response.)








(5)



Prepare journal entries dated
October 31 to record its October activities for sales.
(Omit the “$” sign in your response.)


2.

Exercise 16-8 Computing equivalent units of production-weighted
average L.O. C2






During April, the production
department of a process manufacturing system completed a number of units of a
product and transferred them to finished goods. Of these transferred units,
37,500 were in process in the production department at the beginning of April
and 150,000 were started and completed in April. April’s beginning inventory
units were 60% complete with respect to materials and 40% complete with
respect to labor. At the end of April, 51,250 additional units were in
process in the production department and were 80% complete with respect to
materials and 30% complete with respect to labor.








1.



Compute the number of units
transferred to finished goods.







Number of units









2.



Compute the number of equivalent
units with respect to both materials used and labor used in the production
department for April using the weighted-average method.



















Direct
Materials



Direct
Labor



Number of equivalent
units










3.Exercise 16-9 Costs
assigned to output and inventories-weighted average L.O. C2, P4












During April, the production
department of a process manufacturing system completed a number of units of a
product and transferred them to finished goods. Of these transferred units,
37,500 were in process in the production department at the beginning of April
and 150,000 were started and completed in April. April’s beginning inventory
units were 60% complete with respect to materials and 40% complete with
respect to labor. At the end of April, 51,250 additional units were in
process in the production department and were 80% complete with respect to
materials and 30% complete with respect to labor.





The production department had $531,480
of direct materials and $407,689 of direct labor cost charged to it during
April. Also, its beginning inventory included $74,075 of direct materials
cost and $28,493 of direct labor.








1.



Using the weighted-average method,
compute the direct materials cost and the direct labor cost per equivalent
unit for the department.
(Round your answers
to 2 decimal places. Omit the “$” sign in your response.)



















Direct
Materials



Direct
Labor



Cost per equivalent
unit
















2.



Using the weighted-average method,
assign April’s costs to the department’s output—specifically, its units
transferred to finished goods and its ending goods in process
inventory.
(Round your intermediate
calculations and final answer to 2 decimal places. Omit the
“$” sign in your response.)







Total cost



4.Exercise 16-10
Computing equivalent units of production-FIFO L.O. C4






During April, the production
department of a process manufacturing system completed a number of units of a
product and transferred them to finished goods. Of these transferred units,
37,500 were in process in the production department at the beginning of April
and 150,000 were started and completed in April. April’s beginning inventory
units were 60% complete with respect to materials and 40% complete with
respect to labor. At the end of April, 51,250 additional units were in
process in the production department and were 80% complete with respect to
materials and 30% complete with respect to labor.







Compute the number of equivalent
units with respect to both materials used and labor used in the production
department for April using the FIFO method.



















Direct
Materials



Direct
Labor



Number of equivalent
units










5.Exercise 16-11A
Costs assigned to output-FIFO L.O. C4, P4












During April, the production
department of a process manufacturing system completed a number of units of a
product and transferred them to finished goods. Of these transferred units,
37,500 were in process in the production department at the beginning of April
and 150,000 were started and completed in April. April’s beginning inventory
units were 60% complete with respect to materials and 40% complete with
respect to labor. At the end of April, 51,250 additional units were in
process in the production department and were 80% complete with respect to
materials and 30% complete with respect to labor.





The production department had
$531,480 of direct materials and $407,689 of direct labor cost charged to it
during April. Also, its beginning inventory included $74,075 of direct
materials cost and $28,493 of direct labor.








1.



Using the FIFO method, compute the
direct materials cost and the direct labor cost per equivalent unit for the
department.
(Round your answers to 2 decimal
places. Omit the “$” sign in your response.)



















Direct
Materials



Direct
Labor



Cost per equivalent
unit



$



$












2.



Using the FIFO method, assign
April’s costs to the department’s output—specifically, its units transferred
to finished goods and its ending goods in process inventory.
(Round your intermediate calculations and final answer
to 2 decimal places. Omit the “$” sign in your response.)







Total cost



Problem 16-1A Production cost flow and measurement; journal
entries L.O. P1, P2, P3, P4

[The following information applies to the questions displayed
below.]






Edison Company manufactures wool
blankets and accounts for product costs using process costing. The following
information is available regarding its May inventories.











































Beginning
Inventory





Ending
Inventory





Raw materials
inventory



$



28,000





$



25,500





Goods in process
inventory





220,750







252,000





Finished goods
inventory





319,000







277,000













The following additional
information describes the company’s production activities for May.


6. Problem 16-1A Part 1










Required:



1(a)



Compute the cost of products
transferred from production to finished goods.
(Omit the “$” sign in your response.)







Cost of products
transferred









1(b)



Compute the cost of goods
sold.
(Omit the “$” sign in your
response.)







Cost of goods sold



7.Problem 16-1A Part
2







2(a)



Prepare journal entry dated May 31
to record the raw materials purchases.
(Omit
the “$” sign in your response.)








2(b)



Prepare journal entry dated May 31
to record the direct materials usage.
(Omit
the “$” sign in your response.)








2(c)



Prepare journal entry dated May 31
to record the indirect materials usage.
(Omit
the “$” sign in your response.)








2(d)



Prepare journal entry dated May 31
to record the payroll costs.
(Omit the
“$” sign in your response.)








2(f)



Prepare journal entry dated May 31
to record the indirect labor costs.
(Omit the
“$” sign in your response.)


 






2(g)



Prepare journal entry dated May 31
to record the other overhead costs.
(Omit the
“$” sign in your response.)








2(i)



Prepare journal entry dated May 31
to record the goods transferred from production to finished goods.
(Omit the “$” sign in your response.)








2(j)



Prepare journal entry dated May 31
to record the sale of finished goods.
(Omit
the “$” sign in your response.)


Problem 16-2A Cost per equivalent unit; costs assigned to
products L.O. C2, C3

[The following information applies to the questions displayed
below.]






Fairfax Company uses
weighted-average process costing to account for its production costs. Direct
labor is added evenly throughout the process. Direct materials are added at
the beginning of the process. During September, the company transferred
735,000 units of product to finished goods. At the end of September, the
goods in process inventory consists of 207,000 units that are 90% complete
with respect to labor. Beginning inventory had $244,920 of direct materials
and $69,098 of direct labor cost. The direct labor cost added in September is
$1,312,852, and the direct materials cost added is $1,639,080.














8.

Problem 16-2A Part 1










Required:



1(a)



Determine the equivalent units of
production with respect to direct labor.







Equivalent units









1(b)



Determine the equivalent units of
production with respect to direct materials.







Equivalent units



9.

Problem 16-2A Part 2







2.



Compute both the direct labor cost
and the direct materials cost per equivalent unit.
(Round your answers to 2 decimal place. Omit the
“$” sign in your response.)





















Per
equivalent
unit



Direct labor cost





Direct materials cost








10.Problem 16-2A Part 3







3(a)



Compute both direct labor cost and
direct materials cost assigned to units completed and transferred out.
(Round your per unit costs to 2 decimal places and final
answers to the nearest dollar amount.)





















Cost
transferred
out



Direct materials





Direct labor














3(b)



Compute both direct labor cost and
direct materials cost assigned to ending goods in process inventory.
(Round your per unit costs to 2 decimal places and final
answers to the nearest dollar amount.)





















Costs
of ending goods in process



Direct materials





Direct labor








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