Problem 20-1A Production cost flow and measurement; journal entries L.O. P1, P2, P3, P4

 

Problem 20-1A 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	$	54,000		$	50,000
Goods in process inventory		436,500			516,000
Finished goods inventory		620,000			172,001

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

Raw materials purchases (on credit)	$	250,000
Factory payroll cost (paid in cash)		2,060,000
Other overhead cost (Other Accounts credited)		100,000
Materials used
Direct	$	209,500
Indirect		54,000
Labor used
Direct	$	1,230,000
Indirect		830,000
Overhead rate as a percent of direct labor		125	%
Sales (on credit)	$	4,000,000

The predetermined overhead rate was computed at the beginning of the year as 125% of direct labor cost.

rev: 11_02_2011

Section Break	Learning Objective: 20-P1 Record the flow of direct materials costs in process cost accounting.	Learning Objective: 20-P4 Record the transfer of completed goods to Finished Goods Inventory and Cost of Goods Sold.
Problem 20-1A Production cost flow and measurement; journal entries L.O. P1, P2, P3, P4	Learning Objective: 20-P2 Record the flow of direct labor costs in process cost accounting.
Difficulty: Medium	Learning Objective: 20-P3 Record the flow of factory overhead costs in process cost accounting.

1.

award:
0 out of
2.00 points

Problem 20-1A 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

$ 902,400

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

Cost of goods sold

$ 447,999

rev: 10_31_2011

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2.

award:
4.55 out of
5.00 points

Problem 20-1A 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(e)	Prepare journal entry dated May 31 to record the direct labor 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(h)	Prepare journal entry dated May 31 to record the overhead applied. (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.)

eBook Links (4)

Worksheet	Learning Objective: 20-P1 Record the flow of direct materials costs in process cost accounting.	Learning Objective: 20-P4 Record the transfer of completed goods to Finished Goods Inventory and Cost of Goods Sold.
Problem 20-1A Part 2	Learning Objective: 20-P2 Record the flow of direct labor costs in process cost accounting.
Difficulty: Medium	Learning Objective: 20-P3 Record the flow of factory overhead costs in process cost accounting.

Problem 20-2A 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 760,000 units of product to finished goods. At the end of September, the goods in process inventory consists of 201,000 units that are 40% complete with respect to labor. Beginning inventory had $437,255 of direct materials and $147,070 of direct labor cost. The direct labor cost added in September is $2,794,330, and the direct materials cost added is $2,926,245.

Section Break

Problem 20-2A Cost per equivalent unit; costs assigned to products L.O. C2, C3

3.

award:
0 out of
2.00 points

Problem 20-2A Part 1

Required:
1(a)	Determine the equivalent units of production with respect to direct labor.

Equivalent units

n/r

1(b)	Determine the equivalent units of production with respect to direct materials.

Equivalent units

n/r

eBook Links (2)

4.

award:
0 out of
2.00 points

Problem 20-2A 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.)

5.

award:
0 out of
2.00 points

Problem 20-2A Part 3

3(a)

Compute both direct labor cost and direct materials cost assigned to units completed and transferred out. (Due to rounding of cost per unit, the total costs accounted for in the cost summary may not equal to sum of all the costs given in the problem. Round your per unit costs to 2 decimal places and final answers to the nearest dollar amount.)

3(b)

Compute both direct labor cost and direct materials cost assigned to ending goods in process inventory. (Due to rounding of cost per unit, the total costs accounted for in the cost summary may not equal to sum of all the costs given in the problem. Round your per unit costs to 2 decimal places and final answers to the nearest dollar amount.)

Problem 20-3A Journalizing in process costing; equivalent units and costs L.O. C2, P1, P2, P3

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

Li Company produces large quantities of a standardized product. The following information is available for its production activities for January.

Raw materials				Factory overhead incurred
Beginning inventory	$	23,000		Indirect materials used	$	75,500
Raw materials purchased (on credit)		275,000		Indirect labor used		45,000
Direct materials used		(170,000	)	Other overhead costs		161,040
Indirect materials used		(75,500	)	Total factory overhead incurred	$	281,540
Ending Inventory	$	52,500
				Factory overhead applied
Factory payroll				(140% of direct labor cost)
Direct labor used	$	201,100		Total factory overhead applied	$	281,540
Indirect labor used		45,000
Total payroll cost (paid in cash)	$	246,100

Additional information about units and costs of production activities follows.

Units			Costs
Beginning goods in process inventory	2,300		Beginning goods in process inventory
Started	38,000		Direct materials	$	3,000
Ending goods in process inventory	5,400		Direct labor		2,700
			Factory overhead		4,200
						$	9,900
Status of ending goods in process inventory			Direct materials added				170,000
Materials—Percent complete	90	%	Direct labor added				201,100
Labor and overhead—Percent complete	75	%	Overhead applied (140% of direct labor)				281,540
			Total costs			$	662,540
			Ending goods in process inventory			$	72,050

During January, 18,000 units of finished goods are sold for $120 cash each. Cost information regarding finished goods follows.

Beginning finished goods inventory	$	165,000
Cost transferred in		590,490
Cost of goods sold		(606,390	)
Ending finished goods inventory	$	149,100

Section Break	Learning Objective: 20-C2 Define and compute equivalent units and explain their use in process cost accounting.	Learning Objective: 20-P3 Record the flow of factory overhead costs in process cost accounting.
Problem 20-3A Journalizing in process costing; equivalent units and costs L.O. C2, P1, P2, P3	Learning Objective: 20-P1 Record the flow of direct materials costs in process cost accounting.
Difficulty: Hard	Learning Objective: 20-P2 Record the flow of direct labor costs in process cost accounting.

6.

award:
0 out of
5.00 points

Problem 20-3A Part 1

Required:
1(a)	Prepare journal entry dated January 31 to record the purchase of raw materials. (Omit the “$” sign in your response.)

Date	General Journal	Debit	Credit
Jan. 31	n/r	n/r
	n/r		n/r

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

Date	General Journal	Debit	Credit
Jan. 31	n/r	n/r
	n/r		n/r

1

Date	General Journal	Debit	Credit
Jan. 31	n/r	n/r
	n/r		n/r

1(j)	Prepare journal entries dated January 31 to record the sale of finished goods. (Omit the “$” sign in your response.)

Date	General Journal	Debit	Credit
Jan. 31	n/r	n/r
	n/r		n/r
	n/r	n/r
	n/r		n/r

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Worksheet

0 out of
5.00 points

Problem 20-3A Part 2

2.

		n/r
Total costs to account for		$ n/r

eBook Links (3)

Worksheet	Difficulty: Hard	Learning Objective: 20-C3 Define and prepare a process cost summary and describe its purposes.
Problem 20-5A Part 1	Learning Objective: 20-C2 Define and compute equivalent units and explain their use in process cost accounting.	Learning Objective: 20-P4 Record the transfer of completed goods to Finished Goods Inventory and Cost of Goods Sold.

9.

award:
0 out of
2.00 points

Problem 20-5A Part 2

2.	Prepare the journal entry dated October 31 to transfer the cost of completed units to finished goods inventory. (Omit the “$” sign in your response.)

Date	General Journal	Debit	Credit
Oct. 31	n/r	n/r
	n/r		n/r

eBook Links (3)

Worksheet	Difficulty: Hard	Learning Objective: 20-C3 Define and prepare a process cost summary and describe its purposes.
Problem 20-5A Part 2	Learning Objective: 20-C2 Define and compute equivalent units and explain their use in process cost accounting.	Learning Objective: 20-P4 Record the transfer of completed goods to Finished Goods Inventory and Cost of Goods Sold