Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Chapter 6, Problem 1CE
Lamont Company produced 80,000 machine parts for diesel engines. There were no beginning or ending work-in-process inventories in any department. Lamont incurred the following costs for May:
Required:
- 1. Calculate the costs transferred out of each department.
- 2. Prepare the journal entries corresponding to these transfers. Also, prepare the
journal entry for Grinding that reflects the costs added to the transferred-in goods received from Molding. - 3. What if the Grinding Department had an ending WIP of $12,000? Calculate the cost transferred out and provide the journal entry that would reflect this transfer. What is the effect on finished goods calculated in Requirement 1, assuming the other two departments have no ending WIP?
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Leandro Corp. manufactures wooden desks. Production consists of three processes: cutting, assembly, and finishing. The following costs are given for April:
Cutting
Assembly
Finishing
direct materials
$7,000
$10,000
$3,000
direct labor
3,000
14,000
2,000
applied overhead
4,000
5,000
6,000
There were no work in process inventories and 1,000 podiums were produced.Record the journal entries to record the transfer of goods from process to process.
a.
Work in Process - Assembly 29,000
Work in Process - Cutting 29,000
Work in Process - Finishing 11,000
Work in Process - Assembly 11,000
Finished Goods 54,000
Work in Process - Finishing 54,000
b.
Work in Process - Assembly 14,000
Work in Process - Cutting 14,000
Work in Process - Finishing 43,000
Work in Process - Assembly 43,000
Finished Goods 54,000
Work in Process - Finishing 54,000
c.
Work in Process - Cutting 14,000
Raw Materials 14,000
Work in Process - Assembly 29,000
Raw Materials 29,000
Work in Process -…
1. How much overhead would have been charged to the company’s Work-in-Process account during the year?
2. Comment on the appropriateness of the company’s cost drivers (i.e., the use of machine hours in Machining and direct-labor cost in Assembly).
Leandro Corp. manufactures wooden desks. Production consists of three processes: cutting, assembly, and finishing. The following costs are given for April:
Cutting
Assembly
Finishing
direct materials
$7,000
$10,000
$3,000
direct labor
3,000
14,000
2,000
applied overhead
4,000
5,000
6,000
There were no work in process inventories and 1,000 podiums were produced.The journal entry to assign costs to the Assembly process would be
a.
Raw Materials 20,000
Payroll 19,000
Overhead Control 15,000
Work in Process - Assembly 54,000
b.
Raw Materials 10,000
Payroll 14,000
Overhead Control 5,000
Work in Process - Assembly 29,000
c.
Work in Process - Assembly 29,000
Raw Materials 10,000
Payroll 14,000
Overhead Control 5,000
d.
Work in Process - Assembly 54,000
Raw Materials 20,000
Payroll 19,000
Overhead Control 15,000
e. None of these choices are correct.
Chapter 6 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 6 - What is a process? Provide an example that...Ch. 6 - Describe the differences between process costing...Ch. 6 - Prob. 3DQCh. 6 - What are transferred-in costs?Ch. 6 - Explain why transferred-in costs are a special...Ch. 6 - What is a production report? What purpose does...Ch. 6 - Can process costing be used for a service...Ch. 6 - What are equivalent units? Why are they needed in...Ch. 6 - How is the equivalent unit calculation affected...Ch. 6 - Describe the five steps in accounting for the...
Ch. 6 - Under the weighted average method, how are...Ch. 6 - Under what conditions will the weighted average...Ch. 6 - In assigning costs to goods transferred out, how...Ch. 6 - Prob. 14DQCh. 6 - What is operation costing? When is it used?Ch. 6 - Lamont Company produced 80,000 machine parts for...Ch. 6 - Lising Therapy has a physical therapist who...Ch. 6 - Fleming, Fleming, and Johnson, a local CPA firm,...Ch. 6 - During October, McCourt Associates incurred total...Ch. 6 - Tomar Company produces vitamin energy drinks. The...Ch. 6 - Apeto Company produces premium chocolate candy...Ch. 6 - Jackson Products produces a barbeque sauce using...Ch. 6 - Gunnison Company had the following equivalent...Ch. 6 - Jackson Products produces a barbeque sauce using...Ch. 6 - Morrison Company had the equivalent units schedule...Ch. 6 - Shorts Company has three process departments:...Ch. 6 - A local barbershop cuts the hair of 1,200...Ch. 6 - Friedman Company uses JIT manufacturing. There are...Ch. 6 - Lacy, Inc., produces a subassembly used in the...Ch. 6 - Softkin Company manufactures sun protection...Ch. 6 - Heap Company manufactures a product that passes...Ch. 6 - K-Briggs Company uses the FIFO method to account...Ch. 6 - The following data are for four independent...Ch. 6 - Using the data from Exercise 6.18, compute the...Ch. 6 - Holmes Products, Inc., produces plastic cases used...Ch. 6 - Dama Company produces womens blouses and uses the...Ch. 6 - Fordman Company has a product that passes through...Ch. 6 - Using the same data found in Exercise 6.22, assume...Ch. 6 - Baxter Company has two processing departments:...Ch. 6 - Tasty Bread makes and supplies bread throughout...Ch. 6 - Under either weighted average or FIFO, when...Ch. 6 - During the month of June, the mixing department...Ch. 6 - As goods are transferred from a prior process to a...Ch. 6 - During March, Hanks Manufacturing started and...Ch. 6 - Proteger Company manufactures insect repellant...Ch. 6 - Swasey Fabrication, Inc., manufactures frames for...Ch. 6 - Refer to the data in Problem 6.31. Assume that the...Ch. 6 - Hatch Company produces a product that passes...Ch. 6 - FIFO Method, Single Department Analysis, One Cost...Ch. 6 - Hepworth Credit Corporation is a wholly owned...Ch. 6 - Muskoge Company uses a process-costing system. The...Ch. 6 - Prob. 37PCh. 6 - Healthway uses a process-costing system to compute...Ch. 6 - FIFO Method, Two-Department Analysis Refer to the...Ch. 6 - Jacson Company produces two brands of a popular...Ch. 6 - Golding Manufacturing, a division of Farnsworth...Ch. 6 - Larkin Company produces leather strips for western...Ch. 6 - Novel Toys, Inc., manufactures plastic water guns....Ch. 6 - Prob. 44P
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