Refreshing Water Company produces premium bottled water. In the second department, the Bottling Department, conversion costs are incurred evenly throughout the bottling process, but packaging materials are not added until the end of the process. Costs in beginning Work-in-Process Inventory include transferred in costs of \(1,400, direct labor of \)700, and manufacturing overhead of \(330. March data for the Bottling Department follow:
REFRESHING WATER COMPANY WORK-IN-PROCESS INVENTORY – BOTTLING Month ended March 31,2018 |
Dollars
|
| Units | Transferred in | Direct materials | Direct labor | Manufacturing overheads | Total costs |
Beginning inventory, Mar. 1 (40% complete) | 15,000 | \)1,400 | | \(700 | \)330 | \(2,430 |
Production started | 160,000 | 135,100 | \)30,400 | 33,100 | 16,300 | 214,900 |
Transferred out | 152,000 | | | | | |
Ending inventory, Mar 31 (70% completed) | 23,000 | | | | | |
Requirements
1. Prepare a production cost report for the Bottling Department for the month of
March. The company uses the weighted-average method.
2. Prepare the journal entry to record the cost of units completed and transferred out.
3. Post all transactions to the Work-in-Process Inventory—Bottling T-account. What is the ending balance?
