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Managerial Accounting 15th Edition Solutions Manual By Warren

Download Managerial Accounting 15th Edition Solutions Manual By Warren. This solutions manual for Managerial Accounting 15th Edition By Warren will help you get better grades on your homework because this solutions manual contains the correct answers for each question the end of each chapter of your textbook. Check out the sample chapter below:

 

PROCESS COST SYSTEMS

DISCUSSION QUESTIONS

  1. a. An assembly-type industry using mass production methods, such as TV assembly, would use the process cost system because the products are somewhat standard and lose their identities as individual items. In such industries, it is neither practical nor necessary to identify output by jobs.
  2. A job order cost system would be used by a building contractor to accumulate the costs for each individual building because the costs can be identified with each job without great difficulty.
  3. A job order cost system is best suited for an automobile repair shop because costs can be reasonably identified with each job.
  4. A process cost system would be best suited for a paper manufacturer because the processes are continuous and the products are homogeneous.
  5. A job order cost system is best suited for a custom jewelry manufacturer because most of the production consists of job orders and costs can be reasonably identified with each job.
  6. Because all goods produced in a process cost system are identical units, it is not necessary to classify production costs into job orders.
  7. In a process cost system, the direct labor and factory overhead applied are debited to the work in process accounts of the individual production departments in which they occur. The reason is that all products produced by the department are similar. Thus, there is no need to charge these costs to individual jobs. For the process manufacturer, the direct materials and conversion costs are charged to the department and divided by the completed production of the department to determine a cost per unit.
  8. The cost per equivalent unit is frequently determined separately for direct materials and conversion costs because these two costs are frequently added at different rates in the production process. For example, materials may be incurred entirely at the beginning of the process, while conversion costs are typically incurred evenly throughout the process.
  9. The cost per equivalent unit is used to allocate direct materials and conversion costs between completed and partially completed units.
  10. The transferred-in cost from Blending to Filling includes the materials costs, direct labor, and applied factory overhead incurred to complete units in Blending.
  11. The most important purpose of the cost of production report is to assist in the control of costs. This is accomplished by holding each department head responsible for the costs incurred in the department.
  12. Cost of production reports can provide detailed data about the process. The reports can provide information on the department by individual cost elements. This can enable management to investigate problems and opportunities.

BASIC EXERCISES

 

BE 171 (FIN MAN); BE 31 (MAN)

Steel manufacturing Process
Business consulting Job order
Web designer Job order
Computer chip manufacturing Process
Candy making Process
Designer clothes manufacturing Job order

 

 

BE 172 (FIN MAN); BE 32 (MAN)

3,700 tons started and completed (3,900 tons completed 200 tons beginning work in process), or (4,000 tons started 300 tons ending work in process)

 

 

BE 173 (FIN MAN); BE 33 (MAN)

  Whole Units Percent Materials Added in October Equivalent Units for Materials
Inventory in process, October 1…………………………. 200 0% 0
Started and completed during October……………… 3,700* 100% 3,700
Transferred out of Rolling (completed)……………… 3,900   3,700
Inventory in process, October 31………………………..  300 100%  300
Total units to be assigned costs………………………… 4,200   4,000

* 3,900 200

 

 

BE 174 (FIN MAN); BE 34 (MAN)

  Whole Units Percent Conversion Completed in October Equivalent Units for Conversion
Inventory in process, October 1…………………………. 200 40% 80
Started and completed during October……………… 3,700* 100% 3,700
Transferred out of Rolling (completed)……………… 3,900   3,780
Inventory in process, October 31………………………..  300 25%   75
Total units to be assigned costs………………………… 4,200   3,855

* 3,900 200

 

 

BE 175 (FIN MAN); BE 35 (MAN)

Equivalent units of direct materials:  = $750 per ton

Equivalent units of conversion:  = $120 per ton

BE 176 (FIN MAN); BE 36 (MAN)

  Direct Materials Costs Conversion Costs Total
Costs
Inventory in process, balance……………………………………………………………….     $ 163,800
To completed inventory in process, October 1………………………………………………………………………… $       0 $  9,6001      9,600
Cost of completed beginning work in process……………………………………………………………….     $ 173,400
Started and completed during October………………………………………………………………. 2,775,0002 444,0003  3,219,000
Transferred out of Rolling (completed)………………………………………………………….     $3,392,400
Inventory in process, October 31………………………………………………………………………. 225,0004 9,0005    234,000
Total costs assigned by the Rolling Department…………………………………………………………..     $3,626,400
Completed and transferred-out production…………………………………………………… $3,392,400
Inventory in process, October 31………………………………………………………………… $ 234,000

1 80 × $120

2 3,700 × $750

3 3,700 × $120

4 300 × $750

5 75 × $120

 

 

BE 177 (FIN MAN); BE 37 (MAN)

a. 1. Work in ProcessRolling 3,000,000  
    Work in ProcessCasting   3,000,000

 

  2. Work in ProcessRolling 462,600  
    Factory OverheadRolling   275,000
    Wages Payable   187,600

 

  3. Finished Goods 3,392,400  
    Work in ProcessRolling   3,392,400

 

  1. $234,000 ($163,800 + $3,000,000 + $462,600 $3,392,400)

 

 

BE 178 (FIN MAN); BE 38 (MAN)

Material cost per ton, September:  = $95

Material cost per ton, October:  = $91

The cost of materials has decreased by $4 per ton between September and October, indicating an improvement in the cost of materials.

EXERCISES

 

Ex. 171 (FIN MAN); Ex. 31 (MAN)

a. Work in Process—Blending Department XXX  
  Materials—Cocoa   XXX
  Materials—Sugar   XXX
  Materials—Dehydrated Milk   XXX

 

b. Work in Process—Molding Department XXX  
  Work in Process—Blending Department   XXX

 

c. Work in Process—Packing Department XXX  
  Work in Process—Molding Department   XXX

 

d. Finished Goods XXX  
  Work in Process—Packing Department   XXX

 

e. Cost of Goods Sold XXX  
  Finished Goods   XXX

 

Ex. 172 (FIN MAN); Ex. 32 (MAN)

 

Ex. 173 (FIN MAN); Ex. 33 (MAN)

a. 1. Work in Process—Refining Department 1,250,000  
    Materials   1,250,000

 

  2. Work in Process—Refining Department 660,000  
    Wages Payable   660,000

 

  3. Work in Process—Refining Department 975,000  
    Factory Overhead—Refining Department   975,000
       
b. Work in Process—Sifting Department* 2,918,000  
  Work in Process—Refining Department   2,918,000

* $328,000 + $1,250,000 + $660,000 + $975,000 $295,000

 

 

Ex. 174 (FIN MAN); Ex. 34 (MAN)

  1. Factory overhead rate:

$3,150,000 ÷ $1,800,000 = 175%

 

b. Work in ProcessBlending Department 280,000  
  Factory OverheadBlending Department   280,000
  $160,000 × 175% = $280,000    

 

  1. $3,900 debit ($283,900 $280,000)

 

  1. Underapplied factory overhead

 

 

Ex. 175 (FIN MAN); Ex. 35 (MAN)

 

  Whole
Units
Equivalent Units
  Direct Materials Conversion
Inventory in process, beginning      
(35% completed) 2,400 0 1,5601
Started and completed 8,4002 8,400 8,400
Transferred to Packing Department 10,800 8,400 9,960
Inventory in process, ending      
(60% completed) 1,900 1,900 1,1403
Total 12,700 10,300 11,100
       

1 2,400 units × (100% 35%)

2 10,800 units 2,400 units

3 1,900 units × 60%

 

Ex. 176 (FIN MAN); Ex. 36 (MAN)

  1. Drawing Department

 

  Whole
Units
Equivalent Units
  Direct Materials Conversion
Inventory in process, June 1      
(38% completed) 10,000 0 6,2001
Started and completed in June 50,0002 50,000 50,000
Transferred to Winding Department in June 60,000 50,000 56,200
Inventory in process, June 30      
(70% completed) 11,500 11,500 8,0503
Total 71,500 61,500 64,250
       

1 10,000 units × (100% 38%)

2 60,000 units 10,000 units

3 11,500 units × 70%

 

  1. Winding Department
  Whole
Units
Equivalent Units
Direct Materials Conversion
Inventory in process, June 1      
(35% completed) 4,000 0 2,6001
Started and completed in June 56,5002 56,500 56,500
Transferred to finished goods in June 60,500 56,500 59,100
Inventory in process, June 30      
(60% completed) 3,500 3,500 2,1003
Total 64,000 60,000 61,200
       

1 4,000 units × (100% 35%)

2 60,000 units 3,500 units

3 3,500 units × 60%

 

Note: Of the 60,000 units transferred in from Drawing, 56,500 units were started and completed in Winding and 3,500 units are in Winding ending work in process.

 

Ex. 177 (FIN MAN); Ex. 37 (MAN)

a. Units in process, December 1……………………………………………………………………………………………………….. 24,000
  Units placed into production for December………………………………………………………………………………………….. 134,000
  Units finished during December………………………………………………………………………………………….. (128,000)
  Units in process, December 31………………………………………………………………………………………………………   30,000

 

b.   Whole
Units
Equivalent Units
    Direct Materials Conversion
  Inventory in process, December 1      
  (3/4 completed) 24,000 0 6,0001
  Started and completed in December 104,0002 104,000 104,000
  Transferred to finished goods in December 128,000 104,000 110,000
  Inventory in process, December 31      
  (1/2 completed) 30,000 30,0003 15,0004
  Total 158,000 134,000 125,000
         

1 24,000 units × (100% 75%)

2 128,000 units 24,000 units or 134,000 units 30,000 units

3 134,000 units 104,000 units

4 30,000 units × 50%

 

Ex. 178 (FIN MAN); Ex. 38 (MAN)

  1. 1. $1.75 ($234,500 ÷ 134,000 units)

 

  1. $4.20 [($150,000 + $375,000) ÷ 125,000 units]

 

  1. $141,900, determined as follows:

 

Work in ProcessBaking Department balance, December 1……………………………………………………………………………………………………. $116,700
Conversion costs incurred during December  
(6,000 equivalent units × $4.20)…………………………………………………………………………………………..   25,200
Cost of beginning work in process completed during December……………………………………………………………………………………… $141,900

 

  1. $618,800 [($1.75 + $4.20) × 104,000 units]

 

Note to Instructors: The cost of the beginning work in process completed during December, $141,900 (a. 3), plus the cost of the units started and completed during December, $618,800 (a. 4), equal the cost of the units finished during December, $760,700, which is the amount of goods finished in December (Dec. 31 credit to Work in ProcessBaking Department)

 

  1. $115,500, determined as follows:

 

Direct materials ($1.75 × 30,000 units)……………………………………………………………………………………………. $ 52,500
Conversion costs ($4.20 × 15,000 equivalent units)…………………………………………………………………………………………….   63,000
Cost of ending work in process………………………………………………………………………………………… $115,500

 

Note: The cost of the ending work in process is also the balance of Work in ProcessBaking Department as of December 31.

 

  1. The conversion costs in December increased by $0.05 per equivalent unit, determined as follows:

 

Work in ProcessBaking Department balance, December 1……………. $116,700
Deduct direct materials cost incurred in November  
($1.75 × 24,000 units, same cost per unit as December)………………….  (42,000)
Conversion costs incurred in November…………………………………………. $ 74,700
November conversion cost per equivalent unit  
[$74,700 ÷ (24,000 units × 3/4)]……………………………………………………….. $ 4.15
December conversion cost per equivalent unit………………………………… $ 4.20
Less November conversion cost per equivalent unit………………………..  (4.15)
Increase in conversion cost per equivalent unit……………………………….. $ 0.05

 

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