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Chapter 18: Q18RQ (page 1006)

Explain the additional journal entries required by process costing systems that are not needed in job order costing systems.

Short Answer

Expert verified

The journal entry which is required in process costing system but not required in the job order costing system is:

Date

Particulars

Debit ($)

Credit ($)

WIP Inventory – Department 1

XXX

WIP Inventory – Department 2

XXX

(Transfer of units from one department to another department)

Step by step solution

01

Step-by-Step Solution:Step 1: Process Costing System

A process costing system is used to determine the manufacturing cost of the product, which passes from more than one process. It determines the cost of manufacturing for every process.

02

The separate journal entry passed in the process costing system

Journal entry passed when the inventory completed in the department transferred to another department. It is recorded by debiting the WIP inventory of the department receiving the units and crediting the WIP inventory of the department transferring the units.

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Most popular questions from this chapter

Question: Explain the terms to account for and accounted for.

Question: Mayhem Electronics makes game consoles in three processes: assembly, programming, and packaging. Direct materials are added at the beginning of the assembly process. Conversion costs are incurred evenly throughout the process. The Assembly Department had no Work-in-Process Inventory on March 31. In mid-April, Mayhem Electronics started production on 99,000 game consoles. Of this number, 95,000 game consoles were assembled during April and transferred out to the Programming Department. The April 30 Work-in-Process Inventory in the Assembly Department was 45% of the way through the assembly process. Direct materials costing \(301,950 were placed in production in Assembly during April, direct labor of \)100,960 was assigned, and manufacturing overhead of $136,200 was allocated to that department.

Requirements

1. Prepare a production cost report for the Assembly Department for April. The

company uses the weighted-average method.

2. Prepare a T-account for Work-in-Process Inventory—Assembly to show its activity during April, including the April 30 balance.

Question: What are conversion costs? Why do some companies using process costing systems use conversion costs?

Mayhem Electronics makes game consoles in three processes: assembly, programming, and packaging. Direct materials are added at the beginning of the assembly process. Conversion costs are incurred evenly throughout the process. The Assembly Department had no Work-in-Process Inventory on March 31. In mid-April, Mayhem Electronics started production on 99,000 game consoles. Of this number, 95,000 game consoles were assembled during April and transferred out to the Programming Department. The April 30 Work-in-Process Inventory in the Assembly Department was 45% of the way through the assembly process. Direct materials costing \(301,950 were placed in production in Assembly during April, direct labor of \)100,960 was assigned, and manufacturing overhead of $136,200 was allocated to that department.

Requirements

1. Prepare a production cost report for the Assembly Department for April. The

company uses the weighted-average method.

2. Prepare a T-account for Work-in-Process Inventory—Assembly to show its activity during April, including the April 30 balance.

Work Problem P18-33A using the FIFO method. The Mixing Department beginning work in process of 300 units is 40% complete as to both direct materials and conversion costs. Round equivalent unit of production costs to four decimal places. Round all other costs to the nearest whole dollar.
See all solutions

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