chapter 4 - process costing - 201 -

what is the journal entry to record the overhead costs applied to department A & B? (separate departments , A making pale, B making handle for pale)

DEb - WIP depart A WIP depart B credit - manufacturing overhead

explain the flow of materials, labor, and overhead costs in process costing system

Direct mat, direct labor, and manufacturing overhead >>>>>> WIP (processing department) >>>>>> finished goods >>>>>> COGS

Assume Department A has 500 units in its ending work in process inventory that are 60% complete with respect to processing in the department. What would the equivalent units be

These 500 partially complete units are equivalent to 300 fully complete units (500 × 60% = 300). Department A's ending work in process inventory would contain 300 equivalent units for the period.

Equivalent units of production always equals:

Units completed and transferred (which includes beginning inventory) +Equivalent units remaining in work in process

cost of units transferred out

Cost per equivalent unit x cost per equivalent units

For the current period, Jones started 15,000 units and completed 10,000 units, leaving 5,000 units in process 30 percent complete. How many equivalent units of production did Jones have for the period?

11,500 units 10,000 units + (5,000 units * 0.30)

list the differences between process and job-order costing

1. a single product is produced either on a continuous basis or for long periods of time. All units of product are identical 2. costs are accumulated by department 3. unit costs are computed by department

when the product is moving from WIP in dep B to finished goods, what is journal entry?

deb - finished goods credit - WIP department B

what is the journal entry to record the labor costs for department A & B? (separate departments , A making pale, B making handle for pale)

debit - WIP - DEP A, WIP - Dep B credit - salaries and wages payable

once processing has been completed in a department, the units are transferred to the next department for further processing. What does the journal entry look like form DEP A to DEP B

debit - WIP dep B cred - WIP dep A

when the product is sold, what does the entry look like

debit COGS and credit finished goods

what is the journal entry to issue raw materials to processing department A & B? (separate departments , A making pale, B making handle for pale)

debit WIP - department A WIP- Department B credit - raw materials

which two costs are combined into one classification of product costs? and what are they called when combined?

direct labor and manufacturing overhead , when combined : CONVERSION COSTS

_____ _____ costs are often small in comparison to the other product costs in process cost systems

direct labor costs

how to prepare a cost reconciliation report

go to slide 53 and on

operation costing:

hybrid of job-order and process costing commonly used when batches of many different product pass through the same processing department A hybrid costing system used when products have some common characteristics and some individual characteristics.

equivalent units definition

is the number of complete units that could have been obtained from the materials and effort that went into the partially complete units the product of the number of partially completed units and the percentage completion of those units with respect to the processing in the department.

any unit in an organization where materials, ____, or ______ are added to the product

labor, or overhead

Equivalent Units =

number of partially completed units x percentage completion

SLIDE 33-54 are important

ok? especially slide 37 and 38 and 39

in process costing, as in job-order costing, _______ _______ ______ are usually used. Manufacturing overhead cost is applied according to the amount of the ______ _____ that is incurred in the department

predetermined overhead rates ; allocation base

process costing is used for products that are:

similar and produced continuously

what is the formula for computing the cost per equivalent units: with weighted average method

weighted-average method (a separate calculation is made for each cost category in each processing department) cost per equivalent unit = (cost of beginning work in process inventory + cost added during the period) / equivalent units of production