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Chapter 18: Q,18-19RQ (page 1006)
Question: Department 1 is transferring units that cost $40,000 to Department 2. Give the journal entry.
Answer
Date | Particulars | Debit ($) | Credit ($) |
Work in process inventory-Department 2 | 40,000 | ||
Work in process inventory-Department 1 | 40,000 |
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Question: What are the four steps in preparing a production cost report?
When might it be beneficial for a company to use the FIFO method? When is the weighted-average method more practical?
Miller Company sells several products. Sales reports show that the sales volume of its most popular product has increased the past three quarters while overall profits have decreased. How might production cost reports assist management in making decisions about this product?
Question: Spring Fresh produces premium bottled water. Spring Fresh purchases artesian water, stores the water in large tanks, and then runs the water through two processes: filtration and bottling.
During February, the filtration process incurred the following costs in processing
200,000 liters:
Wages of workers operating filtration equipment | $19,950 |
Manufacturing overhead allocated to filtration | 20,050 |
Water | 110,000 |
Spring Fresh had no beginning Work-in-Process Inventory in the Filtration Department in February and uses the weighted-average method.
Requirements
1. Compute the February conversion costs in the Filtration Department.
2. The Filtration Department completely processed 200,000 liters in February. What was the filtration cost per liter?
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.
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