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Chapter 18: Q32PGA (page 1017)

Dee Electronics makes game consoles in three processes: assembly, programming, and packaging. Direct materials are added at the beginning of the assembly process. Conversion costs are incurred evenly throughout the process. The Assembly Department had no Work-in-Process Inventory on October 31. In mid-November, Dee Electronics started production on 100,000 game consoles. Of this number, 90,000 game consoles were assembled during November and transferred out to the Programming Department. The November 30 Work-in-Process Inventory in the Assembly Department was 35% of the way through the assembly process. Direct materials costing \(399,000 were placed in production in Assembly during November, direct labor of \)139,000 was assigned, and manufacturing overhead of $130,280 was allocated to that department.

Requirements

1. Prepare a production cost report for the Assembly Department for November.

The company uses the weighted-average method.

2. Prepare a T-account for Work-in-Process Inventory—Assembly to show its activity during November, including the November 30 balance.

Short Answer

Expert verified

1. Production cost report


Production Cost Report for the Assembly Department

for November


Equivalent unit of production

UNITS

Physical units

Direct material

Conversion costs

Total

Units to account for:

  • Beginning WIP
  • Started in production

100,000

Total units to account for

100,000

Units accounted for:

  • Completed and transferred

90,000

90,000

90,000

  • Ending WIP

10,000

10,000

3,500


Total units accounted for

100,000

100,000

93,500

COSTS

Direct material

Conversion costs

Total costs

Costs to account for:

Beginning WIP

Cost added during the period


399,000

269,280

668,280

Total cost to account for


399,000

269,280

668,280

Divided by: total EUP


100,000

93,500


Cost per equivalent unit

$3.99

$2.88

Costs accounted for:

  • - Completed and transferred out

359,100

(90,000 x $3.99)

259,200

(90,000x$2.88)

618,300

  • - Ending WIP


39,900

(10,000x $3.99)

10,080

(3,500x$2.88)

49,980

Total costs accounted for

$399,000

$269,280

$668,280

2. The Ending balance of the WIP inventory account for the assembly department is $49,980

Step by step solution

01

Step-by-Step Solution:Step 1: Production Cost Report

Production cost report is prepared by the companies using the process costing system while determining the total manufacturing cost. It shows the detailed costing of the products.

02

Equivalent unit of production for conversion cost

Equivalentunitofproduction=EndingWIPunits×Completion%=10,000×35%=3,500

03

T-account for work-in-process inventory-assembly

Particulars

Amount ($)

Particulars

Amount ($)

Beginning WIP

WIP-programming department

618,300

Direct material

399,000

Direct labor

139,000

Manufacturing overhead

130,280

Ending WIP

49,980

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Most popular questions from this chapter

Carla Carpet manufactures broadloom carpet in seven processes: spinning, dyeing, plying, spooling, tufting, latexing, and shearing. In the Dyeing Department, direct materials (dye) are added at the beginning of the process. Conversion costs are incurred evenly throughout the process. Information for November 2018 follows:

UNITS

Beginning work-in-process inventory

70 rolls

Transferred in from spinning department during November

550 rolls

Completed during November

480 rolls

Ending work in process inventory (80% complete for conversion work)

140 rolls

COSTS

Beginning work in process inventory (transferred in costs, \(4,000, Materials costs, \)1,400 conversion costs, \(5,300)

\)10,700

Transferred in from the spinning department

23,280

Material costs added during November

14,100

Coversion cost added during November (manufacturing wages, \(8,725; manufacturing overhead allocated, \)43,991)

52,716

Requirements

1. Prepare the November production cost report for Carla’s Dyeing Department.

The company uses the weighted-average method.

2. Journalize all transactions affecting Carla’s Dyeing Department during November, including the entries that have already been posted. Assume labor costs are accrued and not yet paid.

Cheerful Colors manufactures crayons in a three-step process: mixing, molding, and packaging. The Mixing Department combines the direct materials of paraffin wax and pigments. The heated mixture is pumped to the Molding Department, where it is poured into molds. After the molds cool, the crayons are removed from the molds and are transferred to the Packaging Department, where paper wrappers are added and the crayons are boxed.

In the Mixing Department, the direct materials are added at the beginning of the

process and the conversion costs are incurred evenly throughout the process. Work in process of the Mixing Department on March 1, 2018, consisted of 800 batches of crayons that were 10% of the way through the production process. The beginning balance in Work-in-Process Inventory—Mixing was \(32,800, which consisted of \)14,000 in direct materials costs and $18,800 in conversion costs. During March, 5,200 batches were started in production. The Mixing Department transferred 3,000 batches to the Molding Department in March, and 3,000 were still in process on March 31. This ending inventory was 80% of the way through the mixing process. Cheerful Colors uses FIFO process costing.

At March 31, before recording the transfer of costs from the Mixing Department

to the Molding Department, the Cheerful Colors general ledger included the following account:

Work-in-process inventory – Mixing

Balance, March 1

32,800

Direct materials

42,000

Direct labor

24,610

Manufacturing overhead

65,830

Requirements

1. Prepare a production cost report for the Mixing Department for March. Round

equivalent unit of production costs to four decimal places. Round all other costs to the nearest whole dollar.

2. Journalize all transactions affecting the Mixing Department during March, including the entries that have already been posted. Assume labor costs are accrued and not yet paid.

The Blending Department for CenTex Paints started October with 1,000 gallons in process and started in production 9,500gallons. During the month, 7,000 gallons were completed and transferred to the next department. Ending work-in-process was3,500 gallons (100% complete with respect to direct materials and 30% complete for conversion costs). The department uses the

weighted-average method. The Blending Department incurred the following costs:

Beginning WIP-Direct materials cost

\(500

Beginning WIP-Conversion cost

1,210

Direct material added during the month

5,800

Conversion cost added during the month

5,230

Total

\)12,740

7. Prepare a production cost report for the Blending Department for the month of October.

Oxford Company had the following transactions in October:

1. Purchased raw materials on account, \(70,000

2. Used materials in production: \)26,000 in the Mixing Department; \(14,000 in the

Packaging Department; \)1,000 in indirect materials

3. Incurred labor costs: \(8,000 in the Mixing Department; \)7,200 in the Packaging

Department; \(2,200 in indirect labor

4. Incurred manufacturing overhead costs: \)3,500 in machinery depreciation; paid

\(2,300 for rent and \)1,590 for utilities

Prepare the journal entries for Oxford Company.

Bergeron’s Exteriors produces exterior siding for homes. The Preparation Department begins with wood, which is chopped into small bits. At the end of the process, an adhesive is added. Then the wood/adhesive mixture goes on to the Compression Department, where the wood is compressed into sheets. Conversion costs are added evenly throughout the preparation process. January data for the Preparation Department are as follows:

UNITS

Beginning work-in-process inventory

0 sheets

Started in production

3,900 sheets

Completed and transferred out to compression in January

2,700 sheets

Ending work-in-process inventory (25% of the way through the preparation process)

1,200 sheets

COSTS

Beginning work-in-process inventory

\(0

Costs added during January

Wood

3,120

Adhesive

1,836

Direct labor

990

Manufacturing overhead allocated

2,100

Total costs

\)8,046

Requirements

1. Prepare a production cost report for the Preparation Department for January. The company uses the weighted-average method. (Hint: Each direct material added at a different point in the production process requires its own equivalent unit of production computation.)

2. Prepare the journal entry to record the cost of the sheets completed and

transferred out to the Compression Department.

3. Post the journal entries to the Work-in-Process Inventory—Preparation T-account. What is the ending balance?
See all solutions

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