91Ó°ÊÓ

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.

Step by step solution

01

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

A production cost report shows the several costs of the products. Companies using a process costing system need to make a production cost report.

02

Equivalent unit of production for transferred in

$$\begin{gathered} \mathbf{EUP}\mathbf{}\mathbf{for}\mathbf{}\mathbf{Transferred}\mathbf{}\mathbf{in}\mathbf{=}(\mathbf{Completed}\mathbf{}\mathbf{units}\mathbf{×}\mathbf{Completion}\mathbf{\%})\mathbf{+}(\mathbf{Ending}\mathbf{}\mathbf{WIP}\mathbf{}\mathbf{units}\mathbf{×}\mathbf{Completion}\mathbf{\%}) \\ \mathbf{=}(\mathbf{480}\mathbf{×}\mathbf{100}\mathbf{\%})\mathbf{+}(\mathbf{140}\mathbf{×}\mathbf{100}\mathbf{\%}) \\ \mathbf{=}\mathbf{620} \end{gathered}$$

03

Equivalent unit of production for direct materials

$$\begin{gathered} \mathbf{EUP}\mathbf{}\mathbf{for}\mathbf{}\mathbf{Directmaterials}\mathbf{=}(\mathbf{Completed}\mathbf{}\mathbf{units}\mathbf{×}\mathbf{Completion}\mathbf{\%})\mathbf{+}(\mathbf{Ending}\mathbf{}\mathbf{WIPunits}\mathbf{×}\mathbf{Completion}\mathbf{\%}) \\ \mathbf{=}(\mathbf{480}\mathbf{×}\mathbf{100}\mathbf{\%})\mathbf{+}(\mathbf{140}\mathbf{×}\mathbf{100}\mathbf{\%}) \\ \mathbf{=}\mathbf{620} \end{gathered}$$

04

Equivalent unit of production for conversion costs

$$\begin{gathered} \mathbf{EUP}\mathbf{}\mathbf{for}\mathbf{}\mathbf{Conversion}\mathbf{}\mathbf{cost}\mathbf{=}(\mathbf{Completed}\mathbf{}\mathbf{units}\mathbf{×}\mathbf{Completion}\mathbf{\%})\mathbf{+}(\mathbf{Ending}\mathbf{}\mathbf{WIPunits}\mathbf{×}\mathbf{Completion}\mathbf{\%}) \\ \mathbf{=}(\mathbf{480}\mathbf{×}\mathbf{100}\mathbf{\%})\mathbf{+}(\mathbf{140}\mathbf{×}\mathbf{80}\mathbf{\%}) \\ \mathbf{=}\mathbf{592} \end{gathered}$$

05

Journal entries

Date	Particulars	Debit ($)	Credit ($)
1.	WIP Inventory – Dyeing department	23,280
	WIP Inventory – Spinning department		23,280
2.	WIP Inventory – Dyeing department	14,100
	Raw material		14,100
3.	WIP Inventory – Dyeing department	8,725
	Wages payable		8,725
4.	WIP Inventory – Dyeing department	43,991
	Manufacturing overhead		43,991
5.	WIP Inventory – Plying department	80,160
	WIP Inventory – Dyeing department		80,160

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