(d) State the journal entries necessary to record the assignment of direct materials, direct manufacturing wages and manufacturing overhead applied to Process 2. Also give the journal entries to record the cost of goods completed and transferred to finished goods. (e) Given that 20% of the unexpected losses were as a result of pilferage, prepare the abnormal spoilage statement, clearly showing Better Choice’s true loss
(d) State the journal entries necessary to record the assignment of direct materials, direct manufacturing wages and manufacturing overhead applied to Process 2. Also give the journal entries to record the cost of goods completed and transferred to finished goods. (e) Given that 20% of the unexpected losses were as a result of pilferage, prepare the abnormal spoilage statement, clearly showing Better Choice’s true loss
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter6: Process Costing
Section: Chapter Questions
Problem 20E: Holmes Products, Inc., produces plastic cases used for video cameras. The product passes through...
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(d) State the
(e) Given that 20% of the unexpected losses were as a result of pilferage, prepare the abnormal spoilage statement, clearly showing Better Choice’s true loss.
![Better Choice Foods makes a single product using two processes. Quality control check takes place during
the process, at which point, rejected units are separated from good units.
The following details relate to production for the month of April 20X9, for Process 2.
(i)
Work-in-process, beginning inventory:
-0-
(ii)
Transfer from Process 1: 15,000 units valued at $51.40 each
(iii)
Other manufacturing costs incurred during April:
Direct material added
$513,000
Direct labour
$365,000
Manufacturing overhead
$211,000
(iv)
Normal losses were estimated to be 5% of input during the period. Losses from Process 2 are
deemed to be scrap, and sold at $40 per unit.
(v)
At inspection 1,750 units were rejected as scrap. These units had reached the following degree of
completion:
Input material
100%
Direct material added
50%
Conversion costs
30%
(vi)
12,000 units were completed and transferred to Finished Goods Inventory.
(vii)
Work-in-process at the end of April had reached the following degree of completion:
Input material
100%
Direct material added
80%
Conversion costs
40%
Required:
(a)
Prepare a statement of equivalent production to determine the equivalent units for direct materials
(From Process 1 & Direct Material Added), and conversion costs and the cost per equivalent unit for
direct materials and conversion costs.
(b)
Calculate the:
Total cost of units completed and transferred to Finished Goods inventory
Cost of abnormal losses
Cost of ending work-in-process inventory in Process 2
Prepare Better Choice's Work-In-Process Inventory
ending balance.
(c)
- Process 2 T-account, clearly showing the
(d)
State the journal entries necessary to record the assignment of direct materials, direct
manufacturing wages and manufacturing overhead applied to Process 2. Also give the journal
entries to record the cost of goods completed and transferred to finished goods.
(e)
Given that 20% of the unexpected losses were as a result of pilferage, prepare the abnormal
spoilage statement, clearly showing Better Choice's true loss.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2abd1cdc-ee4f-4da0-a2ac-96a52c2f0c72%2F5f5d97b7-54c6-4773-9a67-c3c41cf1eea6%2F9qtqgu4_processed.png&w=3840&q=75)
Transcribed Image Text:Better Choice Foods makes a single product using two processes. Quality control check takes place during
the process, at which point, rejected units are separated from good units.
The following details relate to production for the month of April 20X9, for Process 2.
(i)
Work-in-process, beginning inventory:
-0-
(ii)
Transfer from Process 1: 15,000 units valued at $51.40 each
(iii)
Other manufacturing costs incurred during April:
Direct material added
$513,000
Direct labour
$365,000
Manufacturing overhead
$211,000
(iv)
Normal losses were estimated to be 5% of input during the period. Losses from Process 2 are
deemed to be scrap, and sold at $40 per unit.
(v)
At inspection 1,750 units were rejected as scrap. These units had reached the following degree of
completion:
Input material
100%
Direct material added
50%
Conversion costs
30%
(vi)
12,000 units were completed and transferred to Finished Goods Inventory.
(vii)
Work-in-process at the end of April had reached the following degree of completion:
Input material
100%
Direct material added
80%
Conversion costs
40%
Required:
(a)
Prepare a statement of equivalent production to determine the equivalent units for direct materials
(From Process 1 & Direct Material Added), and conversion costs and the cost per equivalent unit for
direct materials and conversion costs.
(b)
Calculate the:
Total cost of units completed and transferred to Finished Goods inventory
Cost of abnormal losses
Cost of ending work-in-process inventory in Process 2
Prepare Better Choice's Work-In-Process Inventory
ending balance.
(c)
- Process 2 T-account, clearly showing the
(d)
State the journal entries necessary to record the assignment of direct materials, direct
manufacturing wages and manufacturing overhead applied to Process 2. Also give the journal
entries to record the cost of goods completed and transferred to finished goods.
(e)
Given that 20% of the unexpected losses were as a result of pilferage, prepare the abnormal
spoilage statement, clearly showing Better Choice's true loss.
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