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Chapter 18: Q19E (page 1011)

Complete the missing amounts and labels in the T-accounts.

Work-in-process inventory 鈥� Cutting

Balance, May 1

0

Transferred out to

(A)

Direct materials

57,000

Direct labor

5,000

Manufacturing overhead

39,000

Balance, May 31

16,000

Work-in-process inventory 鈥� Finishing

Balance, May 1

11,000

Transferred out to

80,000

Transferred in from

(B)

Direct materials

21,000

Direct labor

(C )

Manufacturing overhead

18,000

Balance, May 31

68,000

Work-in-process inventory 鈥� Packaging

Balance, May 1

4,000

Transferred out to

(D)

Transferred in from

(E )

Direct material

1,000

Direct labor

9,000

Manufacturing overhead

14,000

Balance, May 31

8,000

Finished goods inventory

Balance, May 1

0

Transferred out to

(F)

Transferred in from

(G)

Balance, May 31

2,000

Cost of goods sold

Balance, May 1

0

Transferred in from

(H)

Balance, May 31

(I)

Short Answer

Expert verified

Letters

Amount

A

$85,000

B

$85,000

C

$13,000

D

$100,000

E

$80,000

F

$80,000

G

$100,000

H

$80,000

I

$80,000

Step by step solution

01

Step-by-Step Solution:Step 1: Cost of Goods Sold

The cost of goods sold implies the total cost of the product sold during the year. The cost of goods sold is added to the gross profit to arrive at the sales.

02

Calculating the amount of letter A

Transferredoutto(a)=鈥�Directmaterials+Directlabor+Manufacturingoverhead-Endingbalance=$57,000+$5,000+$39,000-$16,000=$85,000

03

Calculating the amount of letter B (transferred in from amount)

The amount transferred from the cutting department to the finishing department is $85,000.

04

Calculating the amount of letter C (direct labor)

Directlabor(c)=Endingbalance+transferoutto-transferinfrom-directmaterial-manufacturingoverhead-beginingbalance=$68,000+$80,000-$85,000-$21,000-$18,000-$11,000=$13,000

05

Calculating the amount of letter E (Transfer in from)

The amount of transferred in from the finishing department to the packaging department is $80,000.

06

Calculating the amount of letter D (transfer out to)

Transferredoutto(d)=鈥�Beginingbalance+Transferin+Directmaterials+Directlabor+Manufacturingoverhead-Endingbalance=$4,000+$80,000+$1,000+$9,000+$14,000-$8,000=$100,000

07

Calculating the amount of letter G (Transfer in from)

The amount of transferred in from the packaging department to the finished goods inventory is $100,000.

08

Calculating the amount of letter F (transfer out to)

Transferredoutto(f)=Beginingbalance+Transferinfrom-Endingbalance=$0+$100,000-$2,000=$80,000

09

Calculating the amount of letter H (transfer in from)

The amount of transferred in from the finished goods inventory to the cost of goods sold is $80,000.

10

Calculating the amount of letter I (Ending balance of cost of goods sold)

Endingbalance(i)=Beginingbalance+Transferinfrom=$0+$80,000=$80,000

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Most popular questions from this chapter

Match the following terms to their definitions.

1. Direct labor plus manufacturing

Overhead

a. Expresses partially completed units in terms of fully completed units

2. Prepared by department for EUP, production costs, and assignment of costs

b. Used by companies that manufacture

homogenous products

3. Equivalent units of production

c. Previous costs brought into later

process

4. Process costing system

d. Conversion costs

5. Transferred in costs

e. Combines prior period costs with current period costs

6. Weighted-average method

f. Production cost report

Ocean Worthy uses three processes to manufacture lifts for personal watercraft: forming a lift鈥檚 parts from galvanized steel, assembling the lift, and testing the completed lift. The lifts are transferred to Finished Goods Inventory before shipment to marinas across the country.

Ocean Worthy鈥檚 Testing Department requires no direct materials. Conversion costs are incurred evenly throughout the testing process. Other information follows for the month of August:

UNITS

Beginning work-in-process inventory

2,000 units

Transferred in from assembling department during the period

7,000 units

Completed during the period

4,000 units

Ending work in process inventory (40% complete for conversion work)

5,000 units

COSTS

Beginning work in process inventory (transferred in costs, \(93,400, conversion costs, \)18,100)

$111,500

Transferred in from the assembly department during the period

672,000

Conversion cost added during the period

54,000

The cost transferred into Finished Goods Inventory is the cost of the lifts transferred out of the Testing Department. Ocean Worthy uses weighted-average

process costing.

Requirements

1. Prepare a production cost report for the Testing Department.

2. What is the cost per unit for lifts completed and transferred out to Finished Goods Inventory? Why would management be interested in this cost?

Question: The Mixing Department of Complete Foods had 62,000 units to account for in October. Of the 62,000 units, 38,000 units were completed and transferred to the next department, and 24,000 units were 20% complete. All of the materials are added at the beginning of the process. Conversion costs are added evenly throughout the mixing process and the company uses the weighted-average method.

Compute the total equivalent units of production for direct materials and

conversion costs for October.

Collins Company has the following data for the Assembly Department for August:

Unit in process at the beginning of august

900

Units started in august

2,000

Units completed and transferred

2,100

Units in process at the end of august

800

Conversion costs are added evenly throughout the process. The company uses the weighted-average method. Compute the equivalent units of production for direct materials and conversion costs for each independent scenario:

1. Units in process at the end of August are 20% complete; materials are added at the beginning of the process.

2. Units in process at the end of August are 80% complete; materials are added at the beginning of the process.

3. Units in process at the end of August are 20% complete; materials are added at the end of the process.

4. Units in process at the end of August are 80% complete; materials are added at the halfway point.

Preparing a production cost report, second department, withbeginning WIP and transferred in costs; journal entries; FIFO method Work Problem P18-40B using the FIFO method. The Mixing Department beginningwork in process of 400 units is 80% complete as to both direct materials and conversion costs. Round equivalent unit costs to four decimal places. Round all other costs to the nearest dollar.
See all solutions

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