g Ledming r Review rcises EX 17-1 Entries for materials cost flows in a process

Question

g Ledming r Review rcises EX 17-1 Entries for materials cost flows in a process cost system Obj. 1 - Describe process cost systems., 3- Journalize entries for transactions using a process cost system.The Hershey Company manufactures chocolate confectionery products. BEAL WORLD The three largest raw materials are cocoa, sugar, and dehydrated milk. These raw materials first go into the Blending Department. The blended product is then sent to the Molding Department, where the bars of candy are formed. The candy is then sent to the Packing Department, where the bars are wrapped and boxed. The boxed candy is then sent to the distribution center, where it is eventually sold to food brokers and retailers. Show the accounts debited and credited for each of the following business events: A. Materials used by the Blending Department B. Transfer of blended product to the Molding Department C. Transfer of chocolate to the Packing Department D. Transfer of boxed chocolate to the distribution center E. Sale of boxed chocolate

Explanation / Answer

in process costing system the transactions flow like a chain a process in one department is completed and it is transfered at the total cost to next department and this process is repeated finally the goods sold are transfered at cost to cost of goods sold account at total accumulated cost of all departments

Process costing journal entries :-

A. materials used by blending department

Being the raw material used in blending department .

B. transfer of blended product to molding department

Being the blended product sent to molding department at the total cost incurred in the blending department

C.transfer of chocolate to packing department

Being the molded chocolate bars sent to packing department at the total cost incurred in the molding department

D. transfer of boxed chocolate to distribution center

Being the boxed chocolate bars sent to distribution centre at the total cost incurred in the packing department

E. Sale of boxed chocolates

xxx

Being sale of choclates and cost of chocolates to cost of goods sold account

partculars debit credit work in process - blending department xxx raw materials inventory xxx

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