Accounting 202 - Chapter 5.2

The ending inventory equivalent for materials can be calculated by multiplying the remaining units in ending WIP (3,000) by the percentage of completion (40%). This gives us 1,200 units. Since the completed and transferred out units are not part of the ending inventory, we subtract them from the total. Therefore, the ending inventory equivalent for materials is 1,520 units.

The cost of units completed in department one is transferred to the Work in Process (WIP) in department two. This means that the cost of the partially completed units from department one is accounted for in the WIP inventory of department two, as it moves from one department to the next in the production process. This allows for accurate tracking of costs and inventory throughout the different stages of production.

The cost per equivalent unit is computed by dividing the total costs to account for by the total equivalent units. This calculation allows for the determination of the cost per unit of production, taking into account both the costs incurred and the number of units produced. By dividing the total costs by the total equivalent units, a per-unit cost can be determined, which is useful for budgeting, pricing, and analyzing the efficiency of production processes.

In a process costing system, the number of WIP inventories equals the number of production departments. This means that each production department will have its own work in progress inventory. This is because in a process costing system, costs are accumulated by department rather than by individual product or job. Each department will have its own WIP inventory to track the costs incurred in that specific department during the production process. Therefore, the number of WIP inventories will be equal to the number of production departments.

The entry to record the use of direct materials in production would include a debit to WIP (Work in Progress) inventory. This is because direct materials are used in the manufacturing process and are considered a cost of production. By debiting the WIP inventory, the company is recognizing the increase in the value of goods that are in the process of being manufactured.

The item that would appear first on a production cost report is the Beginning WIP, if any. This is because the production cost report typically starts by accounting for the work that was already in progress at the beginning of the period. It is important to include the costs associated with this work in order to accurately track and calculate the total costs of production.

The entry to record actual manufacturing overhead costs incurred in a process department would include a debit to manufacturing overhead. This is because manufacturing overhead represents the indirect costs incurred in the production process, such as utilities, rent, and indirect labor. By debiting manufacturing overhead, the company recognizes and records these costs in the accounting system.

The equivalent units for conversion costs are 3,200. This means that out of the 4,000 gallons of paint in the work-in-progress inventory, 3,200 gallons have reached the stage where conversion costs have been added evenly throughout the process. The remaining 800 gallons are still in progress and have not yet had conversion costs added.

Total costs accounted for would appear last on a production cost report because it represents the sum of all costs incurred throughout the production process, including the cost of goods finished for the month, beginning WIP inventory (if any), and ending WIP inventory (if any). Therefore, it is logical for total costs accounted for to be the final item listed on the report, as it encompasses all the other costs and inventory figures.

When materials are requisitioned for molding, it means that materials are being taken out of inventory to be used in the manufacturing process. This results in a decrease in the raw materials inventory, which is recorded as a debit. However, since the materials are being used in the production process, they are also being added to the work-in-progress inventory. This increase in the work-in-progress inventory is recorded as a credit to the raw materials inventory. Therefore, the correct answer is "credit to raw materials inventory".

We prepare calculations for equivalent units for both direct materials and conversion costs. Equivalent units are used to measure the amount of work done in a production process, taking into account partially completed units. Direct materials are the raw materials used in production, while conversion costs include direct labor and manufacturing overhead. By calculating equivalent units for both direct materials and conversion costs, we can accurately assess the progress and costs of the production process.

The number of full-time equivalent employees can be calculated by adding the number of full-time employees to the number of part-time employees multiplied by the ratio of their working hours. In this case, there are 2,000 full-time employees working 8 hours per day and 800 part-time employees working 4 hours per day. Therefore, the number of full-time equivalent employees is 2,000 + (800 * (4/8)) = 2,400.

A transfer of $24,000 from the assembly department to the packaging department indicates that the assembly department has completed its work and is transferring the partially completed goods to the packaging department. This transfer is recorded as a credit to the Work-in-Process (WIP) inventory account for the assembly department because the department is reducing its inventory. Therefore, the given answer of "credit to WIP inventory-assembly" is correct.

The equivalent units in ending WIP inventory for materials would be 4,000. This is because all materials have already been added to the paint, so there are no additional units of materials needed to complete the process. Therefore, the equivalent units for materials in the ending WIP inventory would be the same as the total amount of paint in the inventory, which is 4,000 gallons.