ACCOUNTING

Managerial Accounting 1B – Ch16

1.

Exercise 16-6 Recording cost flows in a process cost system L.O. P1, P2, P3, P4

Lowes Lumber produces bagged bark for use in landscaping. Production involves packaging bark chips in plastic bags in a bagging department. The following information describes production operations for October.

  Bagging
Department
  Direct materials used $ 230,000  
  Direct labor used $ 38,000  
  Predetermined overhead rate (based on direct labor)   120 %
  Goods transferred from bagging to finished goods $ (203,500 )
The company’s revenue for the month totaled $450,000 from credit sales, and its cost of goods sold for the month is $250,000.

(1) Prepare journal entry dated October 31 to record its October production activities for direct material usage. (Omit the “$” sign in your response.)

(2) Prepare journal entry dated October 31 to record its October production activities for direct labor usage.(Omit the “$” sign in your response.)
(3) Prepare journal entry dated October 31 to record its October production activities for overhead allocation.(Omit the “$” sign in your response.)
(4) Prepare journal entry dated October 31 to record its October production activities for goods transfer from production to finished goods. (Omit the “$” sign in your response.)
(5) Prepare journal entries dated October 31 to record its October activities for sales. (Omit the “$” sign in your response.)

2.Exercise 16-8 Computing equivalent units of production-weighted average L.O. C2

 

During April, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of these transferred units, 37,500 were in process in the production department at the beginning of April and 150,000 were started and completed in April. April’s beginning inventory units were 60% complete with respect to materials and 40% complete with respect to labor. At the end of April, 51,250 additional units were in process in the production department and were 80% complete with respect to materials and 30% complete with respect to labor.

 

1. Compute the number of units transferred to finished goods.

 

2. Compute the number of equivalent units with respect to both materials used and labor used in the production department for April using the weighted-average method.

 

 

3.Exercise 16-9 Costs assigned to output and inventories-weighted average L.O. C2, P4

 

During April, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of these transferred units, 37,500 were in process in the production department at the beginning of April and 150,000 were started and completed in April. April’s beginning inventory units were 60% complete with respect to materials and 40% complete with respect to labor. At the end of April, 51,250 additional units were in process in the production department and were 80% complete with respect to materials and 30% complete with respect to labor.
 
The production department had $531,480 of direct materials and $407,689 of direct labor cost charged to it during April. Also, its beginning inventory included $74,075 of direct materials cost and $28,493 of direct labor.

 

1. Using the weighted-average method, compute the direct materials cost and the direct labor cost per equivalent unit for the department. (Round your answers to 2 decimal places. Omit the “$” sign in your response.)

2. ng the weighted-average method, assign April’s costs to the department’s output—specifically, its units transferred to finished goods and its ending goods in process inventory. (Round your intermediate calculations an

4.Exercise 16-10 Computing equivalent units of production-FIFO L.O. C4

During April, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of these transferred units, 37,500 were in process in the production department at the beginning of April and 150,000 were started and completed in April. April’s beginning inventory units were 60% complete with respect to materials and 40% complete with respect to labor. At the end of April, 51,250 additional units were in process in the production department and were 80% complete with respect to materials and 30% complete with respect to labor.
Compute the number of equivalent units with respect to both materials used and labor used in the production department for April using the FIFO method.

d final a

 

5.Exercise 16-11A Costs assigned to output-FIFO L.O. C4, P4

During April, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of these transferred units, 37,500 were in process in the production department at the beginning of April and 150,000 were started and completed in April. April’s beginning inventory units were 60% complete with respect to materials and 40% complete with respect to labor. At the end of April, 51,250 additional units were in process in the production department and were 80% complete with respect to materials and 30% complete with respect to labor.
 
The production department had $531,480 of direct materials and $407,689 of direct labor cost charged to it during April. Also, its beginning inventory included $74,075 of direct materials cost and $28,493 of direct labor.
1. Using the FIFO method, compute the direct materials cost and the direct labor cost per equivalent unit for the department. (Round your answers to 2 decimal places. Omit the “$” sign in your response.)
2. Using the FIFO method, assign April’s costs to the department’s output—specifically, its units transferred to finished goods and its ending goods in process inventory. (Round your intermediate calculations and final answer to 2 decimal places. Omit the “$” sign in your response.)

 

Problem 16-1A 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.

 

 

6. Problem 16-1A Part 1

 

Required:
1(a) Compute the cost of products transferred from production to finished goods. (Omit the “$” sign in your response.)

 

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