ChipChips Inc. manufactures organic snack crackers. Their production process occurs in two phases: The mixing department and the baking department. The weighted average costing method of process costing is being used. The following information is available for the baking department: Current account balances as per GL (unadjusted - these may be incorrect): Work in process, January 31 (materials 100% complete, conversion 40% complete) Finished goods, January 31 2 Additional more detailed cost record information: 3 4 5 Work in process, opening balance, Jan 1 6 (materials 80 % complete, conversion 50% complete) 17 Started into production 18 Costs added during the month 19 Units completed during the month 20 Units 42,000 $ 47,000 $ Units 21,000 $ 120,500 86,000 $ Costs 76,450 120,420 Costs Materials Conversion 12,500 $ 42,000 210,400 $ 52,060 21 There were no finished goods inventories on January 1. 22 23 Required: 24 A. Based on the additional detailed cost record information shown above, calculate the correct amount of cost that should be assigned 25 to the ending work in process and finished goods inventories 26 Note: Please round your cost per EUP to two places after the decimal point! 27 B. Compare the current GL balances for WIP and FG inventories with the correct account balances that you calculated in part (A) above. 28 Post the necessary adjusting entry to correct the GL
ChipChips Inc. manufactures organic snack crackers. Their production process occurs in two phases: The mixing department and the baking department. The weighted average costing method of process costing is being used. The following information is available for the baking department: Current account balances as per GL (unadjusted - these may be incorrect): Work in process, January 31 (materials 100% complete, conversion 40% complete) Finished goods, January 31 2 Additional more detailed cost record information: 3 4 5 Work in process, opening balance, Jan 1 6 (materials 80 % complete, conversion 50% complete) 17 Started into production 18 Costs added during the month 19 Units completed during the month 20 Units 42,000 $ 47,000 $ Units 21,000 $ 120,500 86,000 $ Costs 76,450 120,420 Costs Materials Conversion 12,500 $ 42,000 210,400 $ 52,060 21 There were no finished goods inventories on January 1. 22 23 Required: 24 A. Based on the additional detailed cost record information shown above, calculate the correct amount of cost that should be assigned 25 to the ending work in process and finished goods inventories 26 Note: Please round your cost per EUP to two places after the decimal point! 27 B. Compare the current GL balances for WIP and FG inventories with the correct account balances that you calculated in part (A) above. 28 Post the necessary adjusting entry to correct the GL
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:ChipChips Inc. manufactures organic snack crackers. Their production process occurs in two phases: The mixing department
and the baking department. The weighted average costing method of process costing is being used. The following
information is available for the baking department:
Current account balances as per GL (unadjusted - these may be incorrect):
)
1
Work in process, January 31
(materials 100% complete, conversion 40% complete)
Finished goods, January 31
2 Additional more detailed cost record information:
3
4
15 Work in process, opening balance, Jan 1
16 (materials 80 % complete, conversion 50% complete)
Units
42,000 $
47,000 $ 120,420
Units
21,000 $
120,500
Costs
76,450
86,000
$
Costs
17 Started into production
18 Costs added during the month
19 Units completed during the month
20
21 There were no finished goods inventories on January 1.
22
23 Required:
24 A. Based on the additional detailed cost record information shown above, calculate the correct amount of cost that should be assigned
25 to the ending work in process and finished goods inventories
26 Note: Please round your cost per EUP to two places after the decimal point!
Materials Conversion
12,500 $ 42,000
210,400 $
52,060
27 B. Compare the current GL balances for WIP and FG inventories with the correct account balances that you calculated in part (A) above.
28 Post the necessary adjusting entry to correct the GL.
29
30
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