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Downstream Brewery

PROCESS COSTING SYSTEM
Question 1: What journal entries should be made to record this periods acti!ities"
The case in#ormation is used to $enerate the #ollo%in$ journal entries&
Account Titles Debits
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Credits
'
Cash ()'*++&++
Sales , -roth ()'*++&++
.irect Materials In!entor/0 1arle/ E2tract ('3++&++
.irect Materials In!entor/0 Wheat E2tract 3'45+&++
.irect Materials In!entor/0 6ops 3'(++&++
.irect Materials In!entor/0 1re%ers Yeast 7(+&++
Cash 8'(8+&++
.irect Materials In!entor/0 Water 38&79
-actor/ O!erhead :Indirect Materials0 Water; 45&)4
Cash 7+5&++
Wor< in Process In!entor/0 1oilin$ :.irect =abor;
:9+>;
9'43+&++
Wor< in Process In!entor/0 -ermentin$ :.irect =abor;
:*+>;
4'((+&++
Wor< in Process In!entor/0 Shippin$ :.irect =abor;
:7+>;
7'3(+&++
Salar/ E2pense0 C&.& Cer!esa )++&++
7
Cash 79'3++&++
-actor/ O!erhead :Gas and Electric; 7*+&++
7
-actor/ O!erhead :Rent; 9'+++&++
7
-actor/ O!erhead :Miscellaneous; 79+&++
7
Cash 9'38+&++
E?uipment0 6al#@Ae$s 9'+++&++
7
E?uipment0 Ae$ Washin$ Machine 73'+++&++
7
E2cise Ta2 8'43+&++
General B Cdministrati!e E2penses 3'3)5&++
Interest E2pense 9'*++&++
Cash 9+'*+5&++
-actor/ O!erhead :.epreciation E2pense; 9'835&++
3
-actor/ O!erhead :Insurance E2pense; 9'+++&++
Cccumulated .epreciation' E?uipment 9'55+&++
9
Cccumulated .epreciation' Ae$s 945&++
Prepaid Insurance 9'+++&++
Wor< in Process In!entor/0 1oilin$ 4')75&*9
.irect Materials0 Water :&+++8 2 7'+((D73 2 943; 38&79
.irect Materials0 1arle/ :3&7+ 2 7'+((D73 2 3+; 9'*5(&++
.irect Materials0 Wheat :345 2 7+((D73 2 7+; 3'983&5+
.irect Materials0 6ops :7+ 2 7+((D73 2 3; 7'4(+&++
Wor< in Process In!entor/0 -ermentin$ :)* 2 3&)D(; *+&3+
Kelompok :
Ahmad Satria Very S
Ba!us Ari"ianto
.irect Materials0 Yeast *+&3+
Wor< in Process In!entor/0 1oilin$ :9+>; 9'+)4&3*
Wor< in Process In!entor/0 -ermentin$ :*+>; *'74(&53
Wor< in Process In!entor/0 Shippin$ :7+>; 7'+38&+8
-actor/ O!erhead :9'38+ E *'835 E 7+5 , 38&79; 7+'38+&)4
Wor< in Process In!entor/0 -ermentin$ 79'5*5&7*
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Wor< in Process In!entor/0 1oilin$ 79'5*5&7*
Wor< in Process In!entor/0 Shippin$ 35'373&9*
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Wor< in Process In!entor/0 -ermentin$ 35'373&9*
-inished Goods In!entor/ 34'7)7&(5
*
Wor< in Process In!entor/0 Shippin$ 34'7)7&(5
Cost o# Goods Sold 35'8+3&95
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-inished Goods In!entor/ 35'8+3&95
Notes0
Gi!en&
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79+'+++ e?uipment E 73'+++ <e$s E 73'+++ %ashin$ machine E 9+++ <e$s
9
Includes <e$ %ashin$ machine&
(
4)75&*9 material E 58+4&3* con!ersion cost' 7+(( barrelsF 7+93 barrels trans#erred out&
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Materials0 79'5*5&73 E *+&3+ per e?ui!alent unit' 7+93 barrelsF con!ersion costs0 G77')7(&53 per e?ui!alent unit'
7+3* barrels :Cssumes batch in -ermentin$ 5+> complete as to con!ersion costs;&
*
G35' 373&9* trans#erred in E G7'8*8&+8 in con!ersion costs&
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G34'7)7&(5 per e?ui!alent unit' 7'+3+ barrels H G3*&*() per barrel' 843 barrels sold&
Question #: What is .o%nstreams income statement #or the period"
The process costin$ income statement is as #ollo%s&
Downstream Brewery: Process Costing Income Statement
Total $er Barrel
Gross Sales G ()'*++&++ G 5+&+++
=ess0 E2cise Ta2 8'43+&++ 7+&+++
Net Sales 9)'))+&++ (+&+++
Cost o# Goods Sold 3)'497&9* 38&558
Gross Pro#its on Sales 7+'7()&*( 7+&((7
Sellin$' General' and Cdministrati!e E2penses0
Cdministrati!e Salar/' C&.& Cer!esa )++&++
Miscellaneous Sellin$ and Cdministrati!e E2penses 3'3)5&++
Interest E2pense 9'*++&++
Total Sellin$' General' and Cdministrati!e E2penses *'*)5&++
Operatin$ Pro#it 9'(*9&*(
Question %: What is C&.&s cost per barrel" &#'(('
Question ): What is the !alue o# the in!entor/"
In!entor/ !alues are as #ollo%s&
Be! Balance Trans *n Trans +ut ,nd Balance ,nd -nit Balance
Direct .aterials
1arle/ E2tract 7'+5+&++ ('3++&++ 9'*5(&++ 7'58*&++ 4*+ pounds
Wheat E2tract 345&++ 3'45+&++ 3'983&5+ *93&5+ 39+ pounds
6ops (+&++ 3'(++&++ 7'4(+&++ 4++&++ 4+ bushels
Yeast 7(&++ 7(+&++ *+&3+ 89&)+ 99&5 bric<s
Total .irect Materials 9'+33&9+
/ork in $rocess
1oilin$ , Materials + 4')75&*9
7
4'435&)+ )8&)9 73 barrels
1oilin$ , Con!ersion Costs + *')+4&3*
3
*'438&+3 4)&3( 73 barrels
1oilin$ , Total :7'+(( barrels; + 7('*33&)8 7('(5(&)3 7*)&+4 73 barrels
Be! Balance Trans *n Trans +ut ,nd Balance ,nd -nit Balance
-ermentin$ , Prior .ept& + 7('(5(&)3 7('3)*&4+ 7*)&73 73 barrels
-ermentin$ , Materials + *+&3+ 58&5+ +&4+ 73 barrels
-ermentin$ , Con!ersion Costs + 79'*7(&53 79'59(&8+ 48&*3 73 barrels I 5+>
-ermentin$ , Total :7'+93 barrels; + 3)'738&5( 34'))7&7+ 3()&((
Shipping – Prior + 34'))7&7+ 34'))7&7+ +
Shippin$ , Con!ersion Costs + 3'3*8&+8 3'3*8&+8 +
Shippin$ , Total :843 barrels; + 9+'75+&78 9+'75+&78 +
Total Wor< in Process (7*&57
Finished Goods + 9+'75+&78 3)'497&9* 7'(7)&)9
Total In!entor/ (')54&*(

NOTES0
-ermentin$ con!ersion costs H 4'((+ E *'74(&53
-ermentin$ con!ersion costs trans& out are #or 843 barrels sold' () in #inished $oods' 73 I 5+> complete
Shippin$ con!ersion costs H 7'3(+ E 7'+38&+8
-inished $oods trans& out are #or 843D7'+3+ barrelsF %here 843 E () H 7'+3+
:This case teachin$ note %as prepared b/ =a%rence Grasso and Cind/ Moec<el o# CriJona State
Kni!ersit/' Tempe' CriJona' K&S&C&' as the basis #or class discussion rather than to illustrate either e##ecti!e or
ine##ecti!e handlin$ o# a mana$erial situation& Cll proper names' places and #inancial in#ormation are #ictitious&
.istributed b/ the Cccountin$ Education Resource Centre' The Kni!ersit/ o# =ethbrid$e' The Journal of Accounting
Case Research' Lolume 7' No& 7' 7883&;
7
9'*5( E3'983&5 E 7'4(+ E38&79F trans#er out 7'+93D7'+((
3
9'43+ E 9'+)4&3*
Teachin! Strate!ies 0or Articles
M1ow Boein! Tracks Costs2 A to 34
This articles e2plains the chan$e in 1oein$s costin$ approach' #rom one based on job @costin$ to
a process approach&
Source0 Financial Executive :No!ember@.ecember 788(;' pp& 3+@39&
Discussion Questions:
7& E2plain %hat 1oein$ means b/ process accountin$&
Sistem a<untansi proses /an$ baru 1oein$ ber#o<us pada proses daripada produ<& Tujuann/a
adalah untu< men$emban$<an alat@alat /an$ lebih bai< untu< men$identi#i<asi mana masalah bia/a /an$
timbul' dan lebih bai< memoti!asi para manajer untu< men$uran$i bia/a& .i ba%ah sistem sebelumn/a'
ban/a< produ<si total bia/a dimasu<<an di o!erhead poolF mustahil untu< men$identi#i<asi bia/a man#aat
dari perubahan sistem' atau e#e< dari te<nolo$i baru& Tujuan dari sistem baru adalah untu< memberi<an
in#ormasi /an$ lebih bai< pada bia/a den$an men$hubun$<an mere<a <e proses produ<si daripada <e
pool bia/a operasional&
3& What are the ad!anta$es o# the process accountin$ approach at 1oein$"
See abo!e& The principal objecti!e %as to impro!e the #irms abilit/ to mana$e costs b/ lin<in$
the costs to processes %here there %as mana$ement responsibilit/ rather than to o!erhead pools used onl/
in product costin$&
Tujuan utama adalah untu< menin$<at<an <emampuan perusahaan untu< men$elola bia/a den$an men$hubun$<an
bia/a untu< proses di mana ada tan$$un$ ja%ab manajemen daripada di o!erhead pools han/a di$una<an dalam
produ< bia/a&
9& 6o% does the ne% process accountin$ approach a##ect each business units incenti!es and tools
to control costs"
Manajer proses produ<si : bisnis unit ; memili<i tan$$un$ ja%ab lan$sun$ untu<
men$elola lbia/a /an$ dibeban<am untu< unit' berbeda den$an sistem sebelumn/a di mana
bia/a /an$ di<umpul<an dalam o!erhead pools&Tu$as ini merupa<an tan$$un$ ja%ab dapat
menjadi dasar untu< pen$aturan& ba/aran insenti# Kntu< <e%ajaran' bia/a tu$as untu< unit bisnis
/an$ terbatas pada bia/a' /an$ cu<up dapat di<endali<an oleh unit manajer&
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