Solution Manual of Chapter 4 -
Managerial Accounting 15th
Edition (Ray H. Garrison, Eric
W. Noreen and Peter C.)
,Chapter 4 Process
Costing 4-6 The costs that might be added
in the Firing Department include: (1)
costs transferred in from the Mixing
Department; (2) materials costs added
in the Firing Department; (3) labor
Solutions to Questions costs added in the Firing Department;
and (4) overhead costs added in the
4-1 A process costing system should be Firing Department.
used in situations where a homogeneous
product is produced on a continuous basis in 4-7 Under the weighted-average
large quantities. method, equivalent units of production
consist of units transferred to the next
4-2 Job-order and processing costing are department (or to finished goods)
similar in the following ways: during the period plus the equivalent
1. Job-order costing and process costing have units in the department’s ending work
the same basic purposes—to assign in process inventory.
materials, labor, and overhead cost to
products and to provide a mechanism for 4-8 The company will want to
computing unit product costs. distinguish between the costs of the
2. Both systems use the same basic metals used to make the medallions,
manufacturing accounts. but the medals are otherwise identical
3. Costs flow through the accounts in basically and go through the same production
the same way in both systems. processes. Thus, operation costing is
ideally suited for the company’s needs.
4-3 Cost accumulation is simpler
under process costing because costs
only need to be assigned to
departments—not individual jobs. A
company usually has a small number of
processing departments, whereas a job-
order costing system often must keep
track of the costs of hundreds or even
thousands of jobs.
4-4 In a process costing system, a
Work in Process account is maintained
for each processing department.
4-5 The journal entry to record the
transfer of work in process from the 1
Mixing Department to the Firing
Department is:
, lOMoARcPSD|58847208
The Foundational 15
1. The journal entries would be recorded as follows:
Work in Process—Mixing ............................. 120,000
Raw Materials Inventory ........................ 120,000
Work in Process—Mixing ............................. 79,500
Wages Payable ..................................... 79,500
2. The journal entry would be recorded as follows:
Work in Process—Mixing ............................. 97,000
Manufacturing Overhead ....................... 97,000
3. The “units completed and transferred to finished goods” is computed as
follows:
Pounds
Work in process, June 1 .......................................... 5,000
Started into production during the month ................. 37,500
Total pounds in process ........................................... 42,500
Deduct work in process, June 30 .............................. 8,000
Completed and transferred out during the month ...... 34,500
4. and 5.
The equivalent units of production for materials and conversion are
computed as follows:
Equivalent Units
Materials Conversion
Units transferred out ................................ 34,500 34,500
Work in process, ending:
8,000 units × 100% ................................ 8,000
8,000 units × 40% ................................. 3,200
Equivalent units of production .................... 42,500 37,700
, lOMoARcPSD|58847208
The Foundational 15 (continued)
6. and 7.
Materials Conversion Cost of beginning work in process
................ $ 16,000 $ 12,000 Cost added during the period
....................... 120,000 176,500*
Total cost .................................................... $136,000 $188,500
* $79,500 + $97,000 = $176,500
8. and 9.
The cost per equivalent unit for materials and conversion is computed
as follows:
Total cost (a) ......................................... $136,000 $188,500
Equivalent units of production (b) ........... 42,500 37,700
Cost per equivalent unit (a) ÷ (b) ........... $3.20 $5.00
10. and 11.
The cost of ending work in process inventory for materials and
conversion is computed as follows:
Materials Conversion Total
Equivalent units of production (a) ... 8,000 3,200
Cost per equivalent unit (b) ............ $3.20 $5.00
Cost of ending work in process inventory (a) × (b) ....................
$25,600 $16,000 $41,600*
* $41,600 is the June 30 balance in the Work in Process—Mixing
Department T-account.
12. and 13.
The cost of materials and conversion transferred to finished goods is
computed as follows:
Materials Conversion Total Units transferred out (a)
.................. 34,500 34,500
Managerial Accounting 15th
Edition (Ray H. Garrison, Eric
W. Noreen and Peter C.)
,Chapter 4 Process
Costing 4-6 The costs that might be added
in the Firing Department include: (1)
costs transferred in from the Mixing
Department; (2) materials costs added
in the Firing Department; (3) labor
Solutions to Questions costs added in the Firing Department;
and (4) overhead costs added in the
4-1 A process costing system should be Firing Department.
used in situations where a homogeneous
product is produced on a continuous basis in 4-7 Under the weighted-average
large quantities. method, equivalent units of production
consist of units transferred to the next
4-2 Job-order and processing costing are department (or to finished goods)
similar in the following ways: during the period plus the equivalent
1. Job-order costing and process costing have units in the department’s ending work
the same basic purposes—to assign in process inventory.
materials, labor, and overhead cost to
products and to provide a mechanism for 4-8 The company will want to
computing unit product costs. distinguish between the costs of the
2. Both systems use the same basic metals used to make the medallions,
manufacturing accounts. but the medals are otherwise identical
3. Costs flow through the accounts in basically and go through the same production
the same way in both systems. processes. Thus, operation costing is
ideally suited for the company’s needs.
4-3 Cost accumulation is simpler
under process costing because costs
only need to be assigned to
departments—not individual jobs. A
company usually has a small number of
processing departments, whereas a job-
order costing system often must keep
track of the costs of hundreds or even
thousands of jobs.
4-4 In a process costing system, a
Work in Process account is maintained
for each processing department.
4-5 The journal entry to record the
transfer of work in process from the 1
Mixing Department to the Firing
Department is:
, lOMoARcPSD|58847208
The Foundational 15
1. The journal entries would be recorded as follows:
Work in Process—Mixing ............................. 120,000
Raw Materials Inventory ........................ 120,000
Work in Process—Mixing ............................. 79,500
Wages Payable ..................................... 79,500
2. The journal entry would be recorded as follows:
Work in Process—Mixing ............................. 97,000
Manufacturing Overhead ....................... 97,000
3. The “units completed and transferred to finished goods” is computed as
follows:
Pounds
Work in process, June 1 .......................................... 5,000
Started into production during the month ................. 37,500
Total pounds in process ........................................... 42,500
Deduct work in process, June 30 .............................. 8,000
Completed and transferred out during the month ...... 34,500
4. and 5.
The equivalent units of production for materials and conversion are
computed as follows:
Equivalent Units
Materials Conversion
Units transferred out ................................ 34,500 34,500
Work in process, ending:
8,000 units × 100% ................................ 8,000
8,000 units × 40% ................................. 3,200
Equivalent units of production .................... 42,500 37,700
, lOMoARcPSD|58847208
The Foundational 15 (continued)
6. and 7.
Materials Conversion Cost of beginning work in process
................ $ 16,000 $ 12,000 Cost added during the period
....................... 120,000 176,500*
Total cost .................................................... $136,000 $188,500
* $79,500 + $97,000 = $176,500
8. and 9.
The cost per equivalent unit for materials and conversion is computed
as follows:
Total cost (a) ......................................... $136,000 $188,500
Equivalent units of production (b) ........... 42,500 37,700
Cost per equivalent unit (a) ÷ (b) ........... $3.20 $5.00
10. and 11.
The cost of ending work in process inventory for materials and
conversion is computed as follows:
Materials Conversion Total
Equivalent units of production (a) ... 8,000 3,200
Cost per equivalent unit (b) ............ $3.20 $5.00
Cost of ending work in process inventory (a) × (b) ....................
$25,600 $16,000 $41,600*
* $41,600 is the June 30 balance in the Work in Process—Mixing
Department T-account.
12. and 13.
The cost of materials and conversion transferred to finished goods is
computed as follows:
Materials Conversion Total Units transferred out (a)
.................. 34,500 34,500
