Chapter 16: 3DQ (page 743)
Can services be delivered by means of process operations?
Support your answer with an example.
Yes, services can be delivered by means of process operations. For example Food restaurants.
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Prepare journal entries to record the following production activities.
1. Transferred completed goods from the Assembly department to finished goods inventory. The goods cost \(135,600.
2. Sold \)315,000 of goods on credit. Their cost is $175,000.
Fast Co. produces its product through a single processing department. Direct materials are added at the start of production, and conversion costs are added evenly throughout the process. The company uses monthly reporting periods for its weighted-average process costing system. The Work in Process Inventory account has a balance of \(84,300 as of October 1, which consists of \)17,100 of direct materials and \(67,200 of conversion costs.
During the month, the company incurred the following costs:
Direct material | \)144,400 |
Conversion | 862,400 |
During October, the company started 140,000 units and transferred 150,000 units to finished goods. At the end of the month, the work in process inventory consisted of 20,000 units that were 80% complete with respect to conversion costs.
Required
1. Prepare the company’s process cost summary for October using the weighted-average method.
2. Prepare the journal entry dated October 31 to transfer the cost of the completed units to finished goods inventory.
Question: Is it possible to have under or overapplied overhead costs in a process costing system? Explain.
Identify the control document for materials flow when a materials requisition slip is not used.
Braun Company produces its product through a single processing department. Direct materials are added at the beginning of the process. Conversion costs are added to the product evenly throughout the process. The company uses monthly reporting periods for its weighted-average process costing. The Work in Process Inventory account had a balance of \(21,300 on November 1, which consisted of \)6,800 of direct materials and \(14,500 of conversion costs.
During the month, the company incurred the following costs:
Direct materials | \) 116,400 |
Conversion | 1,067,000 |
During November, the company started 104,500 units and transferred 100,000 units to finished goods. At the end of the month, the work in process inventory consisted of 12,000 units that were 100% complete with respect to direct materials and 25% complete with respect to conversion.
Required
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