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In: Accounting

Sweet Corporation is in the dairy business. Products go through two production departments (A first, then...

Sweet Corporation is in the dairy business. Products go through two production departments (A first, then B). Data from those departments for October 2020 are presented below.


Complete the four steps necessary to prepare a production cost report.


Department A
Department B

Beginning work in process
Beginning work in process


Number of units
1,000
200


% complete for materials
100%

% complete for transferred-in

100%


% complete for conversion
60%
30%


Total materials cost
$24,000
-0-


Total conversion cost
$30,000
$40,000


Total transferred-in costs

$15,000

Department A
Department B

Ending work in process
Ending work in process


Number of units
600
300


% complete for materials
100%

% complete for transferred-in

100%


% complete for conversion
30%
40%


Sweet Corporation started 2,600 units of product during the month in department A. Costs incurred in department A for October 2020 totalled $64,000 for material and $132,000 for conversion. Additionally, department B incurred conversion costs in October 2020 of $600,000. Department B adds no materials to the product.
Instructions

a. Journalize the transfer of goods from department A to department B during October 2020. Sweet Corporation accounts for its costs using the weighted-average method.


$226,163


b. Prepare a production cost report for department B for October 2020.


Total cost of units completed: $833,123 (Weygandt, 12/2017, pp. 159-160) Weygandt, J. J., Kimmel, P. D., Kieso, D. E., Aly, I. M. (2017). Managerial Accounting: Tools for Business Decision-Making, Canadian Edition, 5th Edition. [[VitalSource Bookshelf version]]. Retrieved from vbk://9781119403999 Always check citation for accuracy before use.

Solutions

Expert Solution

a.

Accounts Debit Credit
Work in Process - Department B 218625
Work in Process - Department A 218625
[2900*75.38]

b.

PhysicalUnits Transferred in Conversion costs
Units to be accounted for
Work in process, beginning 200
Transferred in 3000
Total units 3200
Units accounted for
Transferred out 2900 2900 2900
Work in process, ending 300 300 120
Total units 3200 3200 3020
Transferred in Conversion Cost Total
Costs
Unit costs
Total costs 233625 640,000 873,625
Equivalent units 3200 3020
Unit costs 73.0078125 211.9205298 284.9283423
Costs to be accounted for
Work in process, beginning 55000
Transferred in 218625
Started into production 600,000
Total costs 873625
Cost Reconciliation Schedule
Costs accounted for
Transferred out (2,900 × $284.92) 826292.1927
Work in process, ending
Transferred in (300 × $73.0078) 21902
Conversion costs (120 × $211.9205) 25430.46358
Total costs 873625

Workings:

Physical units Materials Conversion
Beginning WIP in Dept B 200
Transferred in from Dept A 3000
3200
Department B
Completed and transferred out 2900 2900 2900
Ending work in process 300 300 120
3200 3200 3020
Transferred in Material Conversion
Beginning WIP 24000 30,000
Costs added during the month 64000 132000
88000 162000
Equivalent units 3600 3180
Cost per equi. Unit 24.44444444 50.94339623 75.38784067
Transferred in Material Conversion
Beginning WIP 15000 40000
Costs added during the month 218625 600,000
233625 640000
Equivalent units 3200 3020
Cost per equi. Unit 73.0078125 211.9205298 284.9283423

ekkarill92 answered 1 year ago
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