Skip to main content

Business Accounting Cost Accounting (15th Edition)

1. To compute: The total costs of binding department costs for March 2014 and assign these costs to units completed and to units in ending work in process. Answer: The cost assign to units completed is $281,700 and cost assign to units in ending work in process is $176,794.44. Explanation: Weighted Average Method: Weighted average method is the method in which per unit cost is calculated by dividing the total cost by number of units produced. It is associated with process costing . Given, Beginning: Degree of completion: transferred in costs 100%, direct material 0%; conversion costs; 50%. Ending: Degree of completion: transferred in costs 100%, direct material 0%; conversion costs; 70%. Statement that shows the calculation of equivalent unit, Particulars Physical units Equivalent units Transferred in costs Direct material Conversion cost Work in process, beginning 1,260 Started into production 2,880 Total 4,140 Goods completed and transferred out 3240 3240 3240 3240 Ending work in progress 900 900 0 180 Equivalent Units 4,140 4,140 3,240 3,420 Table (1) Working Note: (Figure 1) Thus, the equivalent unit of transferred in costs is 4,140 units, direct material is 3,240 units and conversion cost is 3,420 units. Statement that shows the calculation of cost assign to equivalent unit, Particulars Transferred in costs Direct material Conversion cost Total cost incurred $194,580.00 $28,188 $106,970 Equivalent units 4140 3240 3420 Equivalent cost per unit $47.00 $8.70 $31.28 Goods completed and transferred out during October 3240 3240 3240 Cost assigned to completed and transferred out during October $152,280.00 $28,188.00 101,340 Ending work in progress 900 0 180 Cost assigned to Ending work in progress $42,300.00 $0.00 $5,630.00 Total cost assigned to units completed $281,808.00 Total cost assigned to Ending work in progress $47,930.00 Table (2) Working note: (Figure 2) Given, Direct material: Total cost added during March is $28,188. Transferred in costs: Beginning transferred in cost is $39,060. Total transferred in cost added during March is $155,520. Conversion costs: Beginning cost of conversion is $16,380. Total conversion cost added during March is $84,240. Calculation of total transferred in cost: Total transferred in cost = ( Beginning transferred in cost of work-process + Cost added during the current period ) = $ 39 , 060 + $ 155 , 520 = $ 194,580 Calculation of total conversion cost: Total conversion cost = ( Beginning conversion cost of work-process + Conversion cost added during the current period ) = $ 16 , 380 + $ 84 , 240 = $ 100,620 Conclusion: Thus, the cost assign to units completed is $281,700 and cost assign to units in ending work in process is $47,930 . 2. To prepare: The journal entry to record transfer from one department to another. Explanation: Transfer of work in process from cutting to binding department: Date Account Title and Explanation Post ref Debit ($) Credit ($) Work in Progress- binding department 47,930 Work in Progress- cutting department 47,930 (To record the transfer of work in process from cutting to binding department) Table (1) Work in Progress (WIP) binding department account is an asset account and it records an increase; therefore Work in Progress account is debited. Work in Progress (WIP) cutting department account is an asset account and it decreases with the transfer; therefore; Work in Progress (WIP) account is credited. Transfer of work in process- binding department to finished goods: Date Account Title and Explanation Post ref Debit ($) Credit ($) Finished Goods 281,808 Work in Progress-binding department 281,808 (To record the transfer of work in process- binding department to finished goods account) Table (2) Finished Goods account is an asset account and it records an increase; therefore finished goods account is debited. Work in Progress (WIP) account is an asset account and it decreases with the transfer; therefore; Work in Progress (WIP) account is credited.

1. To compute: The total costs of binding department costs for March 2014 and assign these costs to units completed and to units in ending work in process. Answer: The cost assign to units completed is $281,700 and cost assign to units in ending work in process is $176,794.44. Explanation: Weighted Average Method: Weighted average method is the method in which per unit cost is calculated by dividing the total cost by number of units produced. It is associated with process costing . Given, Beginning: Degree of completion: transferred in costs 100%, direct material 0%; conversion costs; 50%. Ending: Degree of completion: transferred in costs 100%, direct material 0%; conversion costs; 70%. Statement that shows the calculation of equivalent unit, Particulars Physical units Equivalent units Transferred in costs Direct material Conversion cost Work in process, beginning 1,260 Started into production 2,880 Total 4,140 Goods completed and transferred out 3240 3240 3240 3240 Ending work in progress 900 900 0 180 Equivalent Units 4,140 4,140 3,240 3,420 Table (1) Working Note: (Figure 1) Thus, the equivalent unit of transferred in costs is 4,140 units, direct material is 3,240 units and conversion cost is 3,420 units. Statement that shows the calculation of cost assign to equivalent unit, Particulars Transferred in costs Direct material Conversion cost Total cost incurred $194,580.00 $28,188 $106,970 Equivalent units 4140 3240 3420 Equivalent cost per unit $47.00 $8.70 $31.28 Goods completed and transferred out during October 3240 3240 3240 Cost assigned to completed and transferred out during October $152,280.00 $28,188.00 101,340 Ending work in progress 900 0 180 Cost assigned to Ending work in progress $42,300.00 $0.00 $5,630.00 Total cost assigned to units completed $281,808.00 Total cost assigned to Ending work in progress $47,930.00 Table (2) Working note: (Figure 2) Given, Direct material: Total cost added during March is $28,188. Transferred in costs: Beginning transferred in cost is $39,060. Total transferred in cost added during March is $155,520. Conversion costs: Beginning cost of conversion is $16,380. Total conversion cost added during March is $84,240. Calculation of total transferred in cost: Total transferred in cost = ( Beginning transferred in cost of work-process + Cost added during the current period ) = $ 39 , 060 + $ 155 , 520 = $ 194,580 Calculation of total conversion cost: Total conversion cost = ( Beginning conversion cost of work-process + Conversion cost added during the current period ) = $ 16 , 380 + $ 84 , 240 = $ 100,620 Conclusion: Thus, the cost assign to units completed is $281,700 and cost assign to units in ending work in process is $47,930 . 2. To prepare: The journal entry to record transfer from one department to another. Explanation: Transfer of work in process from cutting to binding department: Date Account Title and Explanation Post ref Debit ($) Credit ($) Work in Progress- binding department 47,930 Work in Progress- cutting department 47,930 (To record the transfer of work in process from cutting to binding department) Table (1) Work in Progress (WIP) binding department account is an asset account and it records an increase; therefore Work in Progress account is debited. Work in Progress (WIP) cutting department account is an asset account and it decreases with the transfer; therefore; Work in Progress (WIP) account is credited. Transfer of work in process- binding department to finished goods: Date Account Title and Explanation Post ref Debit ($) Credit ($) Finished Goods 281,808 Work in Progress-binding department 281,808 (To record the transfer of work in process- binding department to finished goods account) Table (2) Finished Goods account is an asset account and it records an increase; therefore finished goods account is debited. Work in Progress (WIP) account is an asset account and it decreases with the transfer; therefore; Work in Progress (WIP) account is credited.

Cost Accounting (15th Edition)

Cost Accounting (15th Edition)

15th Edition

ISBN: 9780133428704

Author: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan

Publisher: PEARSON

See similar textbooks

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

Blurred answer

Chapter 17, Problem 17.37P

Chapter 17, Problem 17.39P

Students have asked these similar questions

None

General accounting question

Can you explain the correct approach to solve this general accounting question?

Chapter 17 Solutions

Cost Accounting (15th Edition)

Ch. 17 - Give three examples of industries that use...Ch. 17 - In process costing, why are costs often divided...Ch. 17 - Explain equivalent units. Why are equivalent-unit...Ch. 17 - What problems might arise in estimating the degree...Ch. 17 - Name the five steps in process costing when...Ch. 17 - Name the three inventory methods commonly...Ch. 17 - Describe the distinctive characteristic of...Ch. 17 - Describe the distinctive characteristic of FIFO...Ch. 17 - Prob. 17.9Q Ch. 17 - Identify a major advantage of the FIFO method for...

Ch. 17 - Identify the main difference between journal...Ch. 17 - The standard-costing method is particularly...Ch. 17 - Why should the accountant distinguish between...Ch. 17 - Transferred-in costs are those costs incurred in...Ch. 17 - Theres no reason for me to get excited about the...Ch. 17 - Prob. 17.16E Ch. 17 - Prob. 17.17E Ch. 17 - Prob. 17.18E Ch. 17 - Prob. 17.19E Ch. 17 - Prob. 17.20E Ch. 17 - Prob. 17.21E Ch. 17 - Prob. 17.22E Ch. 17 - Prob. 17.23E Ch. 17 - Prob. 17.24E Ch. 17 - Prob. 17.25E Ch. 17 - Prob. 17.26E Ch. 17 - Prob. 17.27E Ch. 17 - Prob. 17.28E Ch. 17 - Prob. 17.29E Ch. 17 - Prob. 17.30P Ch. 17 - Prob. 17.31P Ch. 17 - Prob. 17.32P Ch. 17 - Prob. 17.33P Ch. 17 - Prob. 17.34P Ch. 17 - Prob. 17.35P Ch. 17 - Prob. 17.36P Ch. 17 - Prob. 17.37P Ch. 17 - Prob. 17.38P Ch. 17 - Prob. 17.39P Ch. 17 - Prob. 17.40P Ch. 17 - Prob. 17.41P Ch. 17 - Benchmarking, ethics. Amanda McNall is the...Ch. 17 - Prob. 17.43P

Knowledge Booster

Background pattern image

Similar questions

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education

Text book image

FINANCIAL ACCOUNTING

Accounting

ISBN:9781259964947

Author:Libby

Publisher:MCG

Text book image

Accounting

ISBN:9781337272094

Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:Cengage Learning,

Text book image

Accounting Information Systems

Accounting

ISBN:9781337619202

Author:Hall, James A.

Publisher:Cengage Learning,

Text book image

Horngren's Cost Accounting: A Managerial Emphasis...

Accounting

ISBN:9780134475585

Author:Srikant M. Datar, Madhav V. Rajan

Publisher:PEARSON

Text book image

Intermediate Accounting

Accounting

ISBN:9781259722660

Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:McGraw-Hill Education

Text book image

Financial and Managerial Accounting

Accounting

ISBN:9781259726705

Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:McGraw-Hill Education

SEE MORE TEXTBOOKS