Question

I need to know why these two statements are flase. 1.) In process costing, the equivalent...

I need to know why these two statements are flase.

1.) In process costing, the equivalent units computed for materials is generally the same as that computed for conversion costs.

2.) The following journal entry would be made in a processing costing system when units that have been completed in the final processing department are transferred to the finished goods warehouse:

Finished Goods XXX
Materials XXX
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Answer #1

Solution 1:

"In process costing, The equivalent units cumputed for materials is generally the same as that computed for conversion costs", this statement is false because it depends on percentage complete for material and conversion. And the percentage for Material and conversion may vary.

Solution 2:

When units that have been completed in the final processing department are transferred to the finished goods warehouse, then the journal entry would be as follows:

Finished Goods (Debit) XXX

To Work in process Inventory (Credit) XXX

Therefore the entry given in question is wrong.

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