Process Costing in Accounting: Calculations, Costs, and

PRINCIPLES OF ACCOUNTING IINAME______________________ Chapter 17 Illustrative Problem (Process Costing) Tate Company manufactures Product A by a series of four processes, all materials being introduced in Department 1.From Department 1, the materials pass through Departments 2, 3, and 4, emerging as finished Product A.All inventories are costed by thefirst-in, first-out method. The balances in the accounts Work in Process - Department 4 and Finished Goods were as follows onMay 1: Work in Process—Department 4 (1000 units, ¼ complete)$17,800 Finished Goods (1,800 units at $23.50 per unit)$42,300 The following costs were charged to Work in Process—Department 4 during May: Direct materials 4,700 units at $16 a unit$75,200 Direct labor25,500 Factory overhead15,30040,800 During May, 5,000 units of A were completed and 4,800 units were sold.Inventories on May 31were as follows: Work in Process—Department 4:700 units, ½ completed Finished Goods:2,000 units Instructions: 1.Determine the following: (Show your calculations for each answer) a.Equivalent units of production for Department 4 during May. b.Cost per equivalent unit (materials and conversion) for Department 4 for May. c.Total and unit cost of Product A started in a prior period and finished in May. d.Total and unit cost of Product A started and completed in May e.Total cost of goods transferred to finished good. f.Work in process inventory for Department 4, May 31. g.Cost of goods sold (indicate number of units and unit costs to arrive at your answer). h.Finished goods inventory, May 31. 2.Journalize and post to T-accounts for Work in Process—Dept. 4 and Finished Goods to cross check your calculations.