CHAPTER 3 Process Costing ASSIGNMENT CLASSIFICATION TABLE Learning Objectives Questions Exercises Do It Exercises Problems Problems Brief A B 6 7 1 2 3 2 4 1A 1A 1B 1B 1 Understand who uses process cost systems 1 2 20 2 Explain the similarities 2 3 4 5 and differences between job order cost and process cost systems 3 Explain the flow of costs in a process cost system 6 4 Make the journal entries to assign manufacturing costs in a process cost system 5 Compute equivalent units 10 11 12 13 4 9 6 Explain the four steps necessary to prepare a production cost report 8 9 14 15 18 5 6 7 8 1 1 3 1 1 2 3 4 4 2A 3A 4A 5A 6A 2B 3B 4B 5B 6B 2A 3A 4A 5A 2B 3B 4B 5B 3 5 6 7 8 9 10 11 13 14 15 3 5 6 7 8 9 10 11 13 14 15 16 17 18 19 7 12 13 7 Prepare a production 16 17 19 11 cost report 2A 3A 4A 5A 6A 2B 3B 4B 5B 6B 8 Compute equivalent units 21 22 10 11 12 using the FIFO method 16 17 18 19 20 7A 7B Note All asterisked Questions Exercises and Problems relate to material contained in the appendix to the chapter Copyright 2012 John Wiley Sons Inc Weygandt Managerial Accounting 6 e Solutions Manual For Instructor Use Only 3 1 ASSIGNMENT CHARACTERISTICS TABLE Problem Number Description Journalize transactions Complete four steps necessary to prepare a production cost report Complete four steps necessary to prepare a production cost report Assign costs and prepare production cost report Determine equivalent units and unit costs and assign costs Compute equivalent units and complete production cost report Moderate 15 25 7A Determine equivalent units and unit costs and assign costs for processes prepare production cost report Moderate 30 40 Journalize transactions Complete four steps necessary to prepare a production cost report Complete four steps necessary to prepare a production cost report Assign costs and prepare production cost report Determine equivalent units and unit costs and assign costs Compute equivalent units and complete production cost report Moderate 15 25 7B Determine equivalent units and unit costs and assign costs for processes prepare production cost report Moderate 30 40 Difficulty Level Moderate Simple Simple Moderate Moderate Moderate Simple Simple Moderate Moderate Time Allotted min 20 30 30 40 30 40 20 30 20 30 20 30 30 40 30 40 20 30 20 30 1A 2A 3A 4A 5A 6A 1B 2B 3B 4B 5B 6B 3 2 Copyright 2012 John Wiley Sons Inc Weygandt Managerial Accounting 6 e Solutions Manual For Instructor Use Only B L O O M S T A X O N O M Y T A B L E Correlation Chart between Bloom s Taxonomy Learning Objectives and End of Chapter Exercises and Problems Application Analysis Synthesis Evaluation C o p y r i g h t 2 0 1 2 i l J o h n W e y S o n s I n c W e y g a n d t M a n a g e r i a l A c c o u n t i n g 6 e l S o u t i o n s M a n u a l F o r I n s t r u c t o r U s e O n y l 3 3 Learning Objective 1 Understand who uses process cost systems 2 Explain the similarities and differences between job order cost and process cost systems 3 Explain the flow of costs in a process Q3 6 Knowledge Comprehension Q3 1 Q3 2 Q3 2 Q3 3 DI3 1 DI3 1 E3 1 Q3 20 Q3 4 Q3 5 E3 1 cost system 4 Make the journal entries to assign manufacturing costs in a process cost system 5 Compute equivalent units Q3 6 Q3 10 Q3 11 6 Explain the four steps necessary to prepare a production cost report Q3 8 Q3 9 7 Prepare a production cost report Q3 16 Q3 17 Q3 19 8 Compute equivalent units using the FIFO method E3 3 P3 1A Q3 7 BE3 1 BE3 2 Q3 12 Q3 13 BE3 4 BE3 9 DI3 3 E3 3 E3 5 E3 6 E3 7 E3 8 Q3 14 Q3 15 Q3 18 BE3 5 BE3 6 BE3 7 BE3 8 DI3 4 E3 3 E3 5 E3 6 BE3 11 DI3 4 E3 7 E3 11 E3 13 Q3 21 Q3 22 BE3 10 BE3 11 BYP3 1 P3 1B P3 1A P3 1B P3 1A P3 1B P3 2A P3 3A P3 2B P3 3B P3 2A P3 3A P3 2B P3 3B BE3 3 DI3 2 E3 2 E3 9 E3 10 E3 11 E3 13 E3 14 E3 15 P3 2A P3 3A P3 4A E3 7 E3 8 E3 9 E3 10 E3 11 E3 13 E3 14 E3 15 E3 16 E3 17 P3 2A P3 3A P3 4A P3 5A P3 6A BE3 12 E3 16 E3 17 E3 18 E3 4 P3 1A P3 1B P3 5A P3 6A P3 2B P3 3B P3 4B P3 5B P3 6B E3 18 E3 19 P3 2A P3 3A P3 4A P3 5A P3 2B P3 3B P3 4B P3 5B P3 2B P3 3B P3 4B P3 5B P3 6B E3 19 E3 20 P3 7A P3 7B BYP3 2 BYP3 3 BYP3 7 Broadening Your Perspective BYP3 4 BYP3 5 BYP3 6 1 2 3 4 5 7 8 9 10 11 ANSWERS TO QUESTIONS a Process cost b Process cost c Job order d Job order The primary focus of job order cost accounting is on the individual job In process cost accounting the primary focus is on the processes involved in producing homogeneous products The similarities are 1 all three manufacturing cost elements direct materials direct labor and overhead are the same 2 the accumulation of the costs of materials labor and overhead is the same and 3 the flow of costs is the same The features of process cost accounting are 1 separate work in process accounts for each process 2 production cost reports 3 product costs computed for each accounting period and 4 unit costs computed based on total manufacturing costs Sam is correct The flow of costs is the same in process cost accounting as in job order cost accounting The method of assigning costs however is significantly different 6 a 1 Materials are charged to production on the basis of materials requisition slips 2 Labor is usually charged to production on the basis of the payroll register or departmental payroll summaries b The criterion used in assigning overhead to processes is to identify the activity that drives or causes the cost In many companies this activity is machine time not direct labor The entry to assign overhead to production is July 31 Work in Process Machining Work in Process Assembly Manufacturing Overhead 15 000 12 000 27 000 To prepare a production cost report …