Question

St. Germaine Company manufactures car seats in its Albany plant. Each car seat passes through the assembly department and testing department. This problem focuses on the testing department. Direct materials are added when the testing department process is 95% complete. Conversion costs are added evenly during the testing​ department's process. As work in assembly is​ completed, each unit is immediately transferred to testing. As each unit is completed in​ testing, it is immediately transferred to Finished Goods. St. Germaine Company uses the​ weighted-average method of process costing. Data for the testing department for October 2017 are as​ follows:

	Physical Units (Car Seats)	Transferred-In Costs	Direct Materials	Conversion Costs
Work in progress, October 1^a	5,500	$ 2,934,000	$ 0	$ 550,195
Transferred in during October 2017	?
Completed during October 2017	29,800
Work in progress, October 31^b	1,700
Total costs added during October 2017		$ 8,154,000	$ 10,966,400	$ 4,615,290

a.) Degree of​ completion: transferred-in​ costs, ?%; direct​ materials, ?%; conversion​ costs, 65​%.

b.) Degree of​ completion: transferred-in​ costs, ?%; direct​ materials, ?%; conversion​ costs, 45​%.

Questions:

1.) What is the percentage of completion for​ (a) transferred-in costs and direct materials in beginning​ work-in-process inventory and​ (b) transferred-in costs and direct materials in ending​ work-in-process inventory?

2.) For each cost​ category, compute equivalent units in the testing department. Show physical units in the first column of your schedule.

3.) For each cost​ category, summarize total testing department costs for October 2017​, calculate the cost per equivalent​ unit, and assign costs to units completed​ (and transferred​out) and to units in ending work in process.

4.) Prepare journal entries for October transfers from the assembly department to the testing department and from the testing department to Finished Goods.

Answer 1

Req 1.
As the converison is just 65% complete in Beginning WIP, therefore no direct material is added. However, the transferred in units has been fully passed on from previous deptt.
Therefore, Degree of completeion in Beginning WIP: Transfrred in cost: 100% and Direct Material: 0%
Same is the case with Ending WIP, conversion is 45% complete therefore, no direct material is yet added.
Degree of completion in ending WIP: Transfererd in cost: 100% and direct material: 0%
Req 2.
UNITS TO ACCOUNT FOR:
Beginning Work in Process units				5,500.00
Add: Units Started in Process				26,000.00
Total Units to account for:				31,500.00			2040
							240
UNITS TO BE ACCOUNTED FOR:
Units started and completed				29,800.00
Ending Work in Process				1,700.00
Total Units to be accounted for:				31,500.00
Equivalent Units:
			Transferred in Cost		Material Cost		Conversion Cost
			% Completion	Units	% Completion	Units	% Completion	Units
Units started annd completed			100%	29,800.00	100%	29,800.00	100%	29,800.00
Ending Work in Process			100%	1,700.00	0%	0.00	45%	765.00
Total Equivalent units				31,500.00		29,800.00		30,565.00
TOTAL COST TO ACCOUNT FOR:
			Transferred-in		Material		Conversion
Beginning work in Process			2,934,000		0		550,195
Cost Added during May			8,154,000		10,966,400		4,615,290
Total Cost to account for:			11,088,000		10,966,400		5,165,485
Total Cost to account for:							27,219,885
COST PER EQUIVALENT UNIT:
			Transferred-in		Material		Conversion
Cost added during the period			11,088,000		10,966,400		5,165,485
Equivalent Units			31,500.00		29,800.00		30,565.00
Cost per Equivalent unit			352.00		368.00		169.00
TOTAL COST ACCOUNTED FOR:
Units Completed and Transferred out (29800 units)
			Equivalent unit	Cost per EU	Total Cost
Transferred-in cost			29,800	352	10489600
Material cost			29,800	368	10966400
Conversion Cost			29,800	169	5036200
Total Cost of Units completed and transferred out:					26492200
Ending Work in Process (1700 units)
			Equivalent unit		Total Cost
Transferred-in cost			1,700.00	352	598400
Material cost			0.00	368	0
Conversion Cost			765.00	169	129285
Total cost of Ending Work in process:					727,685
Total Cost accounted for:					27,219,885
Req 4. Journal entries:
Work in process-testing account				8154000
Work in process-Assembly					8154000
(for transferring the units to testing)
Finished Goods inventory Account				26492200
Work in process-Testing					26492200
(for transferring the completed units to finished goods)