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Chapter 18: Q39PGB (page 1021)

Question: Mayhem 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 March 31. In mid-April, Mayhem Electronics started production on 99,000 game consoles. Of this number, 95,000 game consoles were assembled during April and transferred out to the Programming Department. The April 30 Work-in-Process Inventory in the Assembly Department was 45% of the way through the assembly process. Direct materials costing \(301,950 were placed in production in Assembly during April, direct labor of \)100,960 was assigned, and manufacturing overhead of $136,200 was allocated to that department.

Requirements

1. Prepare a production cost report for the Assembly Department for April. The

company uses the weighted-average method.

2. Prepare a T-account for Work-in-Process Inventory鈥擜ssembly to show its activity during April, including the April 30 balance.

Short Answer

Expert verified

Answer:

1. Production cost report

Production Cost Report

for Assembly Department

Equivalent unit of production

UNITS

Physical units

Direct material

Conversion costs

Total

Units to account for:

  • Beginning WIP
  • Started in production

99,000

Total units to account for

99,000

Units accounted for:

  • Completed and transferred

95,000

95,000

95,000

  • Ending WIP

4,000

4,000

1,800

Total units accounted for

99,000

99,000

96,800

COSTS

Direct material

Conversion costs

Total costs

Costs to account for:

Beginning WIP

Cost added during the period

$301,950

$237,160

539,110

Total cost to account for

301,950

237,160

539,100

Divided by: total EUP

99,000

96,800

Cost per equivalent unit

$3.05

$2.45

Costs accounted for:

  • Completed and transferred out

289,750

(95,000 x $3.05)

232,750

(95,000x$2.45)

522,500

  • Ending WIP

12,200

(4,000x $3.05)

4,410

(1,800x$2.45)

16,610

Total costs accounted for

$301,950

$237,160

539,110

2. The Ending balance of the WIP inventory account for the assembly department is $16,610

Step by step solution

01

Production Cost Report

A production cost report is a report of a manufacturing company that involves various manufacturing processes which shows the comprehensive costs of a product

02

Equivalent unit of production for conversion cost

Equivalentunitofproduction=EndingWIPunits脳Completion%=4,000脳45%=1,800

03

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

Particulars

Amount ($)

Particulars

Amount ($)

Beginning WIP

WIP-programming department

522,500

Direct material

301,950

Direct labor

100,960

Manufacturing overhead

136,200

Ending WIP

16,610

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Most popular questions from this chapter

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.

Refer to your answers from Exercise E18-21.

Requirements

1. Prepare the journal entries to record the assignment of direct materials and direct labor and the allocation of manufacturing overhead to the Blending Department. Also, prepare the journal entry to record the costs of the gallons completed and transferred out to the Packaging Department. Assume labor costs are accrued and not yet paid.

2. Post the journal entries to the Work-in-Process Inventory鈥擝lending T-account.

What is the ending balance?

3. What is the average cost per gallon transferred out of the Blending Department

into the Packaging Department? Why would the company managers want to

know this cost?

Question: Department 4 has completed production on units that have a total cost of $15,000. The units are ready for sale. Give the journal entry.

The Finishing Department reports the following data for the month:

Equivalent unit of production:

Transferred in

3,000

Direct materials

3,000

Conversion cost

2,250

Costs:

Beginning WIP

Added this month

Total

Transferred in

\(7,500

\)15,000

\(22,500

Direct materials

3,250

6,500

9,750

Conversion costs

6,125

13,000

19,125

Total

\)16,875

\(34,500

\)51,375

Calculate the cost per equivalent units of production for each input. The company

uses the weighted-average method.

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.
See all solutions

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