Chapter 4
Process Costing
Solutions to Questions
4-1 A process costing system should be 4-5 The journal entry to record the transfer
used in situations where a homogeneous of work in process from the Mixing Department
product is produced on a continuous basis in to the Firing Department is:
large quantities.
Work in Process, Firing ......................................
XXXX
4-2 Job-order and processing costing are Work in Process, Mixing...............................
XXXX
similar in the following ways:
1. Job-order costing and process costing have
4-6 The costs that might be added in the
the same basic purposes—to assign
Firing Department include: (1) costs transferred
materials, labor, and overhead cost to
in from the Mixing Department; (2) materials
products and to provide a mechanism for
costs added in the Firing Department; (3) labor
computing unit product costs.
costs added in the Firing Department; and (4)
2. Both systems use the same basic
overhead costs added in the Firing Department.
manufacturing accounts.
3. Costs flow through the accounts in basically
4-7 Under the weighted-average method,
the same way in both systems.
equivalent units of production consist of units
transferred to the next department (or to
4-3 Cost accumulation is simpler under
finished goods) during the period plus the
process costing because costs only need to be
equivalent units in the department’s ending
assigned to departments—not individual jobs. A
work in process inventory.
company usually has a small number of
processing departments, whereas a job-order
4-8 The company will want to distinguish
costing system often must keep track of the
between the costs of the metals used to make
costs of hundreds or even thousands of jobs.
the medallions, but the medals are otherwise
identical and go through the same production
4-4 In a process costing system, a Work in
processes. Thus, operation costing is ideally
Process account is maintained for each
suited for the company’s needs.
processing department.
© The McGraw-Hill Companies, Inc., 2012. All rights reserved.
206 Managerial Accounting, 14th Edition
,Chapter 4: Applying Excel
The completed worksheet is shown below.
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent
of McGraw Hill LLC.
Managerial Accounting 18th Edition, Solutions Manual, Chapter 4 207
,Chapter 4: Applying Excel (continued)
The completed worksheet, with formulas displayed, is shown below.
Copyright © 2024 McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw Hill LLC.
Managerial Accounting 18th Edition, Solutions Manual, Chapter 4
, Chapter 4: Applying Excel (continued)
1. When the units are changed, the worksheet changes as shown below:
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent
of McGraw Hill LLC.
Managerial Accounting 18th Edition, Solutions Manual, Chapter 4 209
Process Costing
Solutions to Questions
4-1 A process costing system should be 4-5 The journal entry to record the transfer
used in situations where a homogeneous of work in process from the Mixing Department
product is produced on a continuous basis in to the Firing Department is:
large quantities.
Work in Process, Firing ......................................
XXXX
4-2 Job-order and processing costing are Work in Process, Mixing...............................
XXXX
similar in the following ways:
1. Job-order costing and process costing have
4-6 The costs that might be added in the
the same basic purposes—to assign
Firing Department include: (1) costs transferred
materials, labor, and overhead cost to
in from the Mixing Department; (2) materials
products and to provide a mechanism for
costs added in the Firing Department; (3) labor
computing unit product costs.
costs added in the Firing Department; and (4)
2. Both systems use the same basic
overhead costs added in the Firing Department.
manufacturing accounts.
3. Costs flow through the accounts in basically
4-7 Under the weighted-average method,
the same way in both systems.
equivalent units of production consist of units
transferred to the next department (or to
4-3 Cost accumulation is simpler under
finished goods) during the period plus the
process costing because costs only need to be
equivalent units in the department’s ending
assigned to departments—not individual jobs. A
work in process inventory.
company usually has a small number of
processing departments, whereas a job-order
4-8 The company will want to distinguish
costing system often must keep track of the
between the costs of the metals used to make
costs of hundreds or even thousands of jobs.
the medallions, but the medals are otherwise
identical and go through the same production
4-4 In a process costing system, a Work in
processes. Thus, operation costing is ideally
Process account is maintained for each
suited for the company’s needs.
processing department.
© The McGraw-Hill Companies, Inc., 2012. All rights reserved.
206 Managerial Accounting, 14th Edition
,Chapter 4: Applying Excel
The completed worksheet is shown below.
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent
of McGraw Hill LLC.
Managerial Accounting 18th Edition, Solutions Manual, Chapter 4 207
,Chapter 4: Applying Excel (continued)
The completed worksheet, with formulas displayed, is shown below.
Copyright © 2024 McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw Hill LLC.
Managerial Accounting 18th Edition, Solutions Manual, Chapter 4
, Chapter 4: Applying Excel (continued)
1. When the units are changed, the worksheet changes as shown below:
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent
of McGraw Hill LLC.
Managerial Accounting 18th Edition, Solutions Manual, Chapter 4 209
