In: Accounting
1. Cost of Production Report
The Cutting Department of Karachi Carpet Company provides the following data for January. Assume that all materials are added at the beginning of the process.
Work in process, January 1, 12,800 units, 55% completed | $142,528* | |
*Direct materials (12,800 × $8) | $102,400 | |
Conversion (12,800 × 55% × $5.7) | 40,128 | |
$142,528 | ||
Materials added during January from Weaving Department, 197,200 units | $1,587,460 | |
Direct labor for January | 494,424 | |
Factory overhead for January | 604,296 | |
Goods finished during January (includes goods in process, January 1), 199,600 units | — | |
Work in process, January 31, 10,400 units, 35% completed | — |
a. Prepare a cost of production report for the Cutting Department. If an amount is zero or a blank, enter in "0". For the cost per equivalent unit computations, round your answers to two decimal places.
Karachi Carpet Company | |||
Cost of Production Report-Cutting Department | |||
For the Month Ended January 31 | |||
Unit Information | |||
Units charged to production: | |||
Inventory in process, January 1 | |||
Received from Weaving Department | |||
Total units accounted for by the Cutting Department | |||
Units to be assigned costs: | |||
Equivalent Units | |||
Whole Units | Direct Materials | Conversion | |
Inventory in process, January 1 | |||
Started and completed in January | |||
Transferred to finished goods in January | |||
Inventory in process, January 31 | |||
Total units to be assigned costs | |||
Cost Information | |||
Costs per equivalent unit: | |||
Direct Materials | Conversion | ||
Total costs for January in Cutting Department | $ | $ | |
Total equivalent units | |||
Cost per equivalent unit | $ | $ | |
Costs assigned to production: | |||
Direct Materials | Conversion | Total | |
Inventory in process, January 1 | $ | ||
Costs incurred in January | |||
Total costs accounted for by the Cutting Department | $ | ||
Cost allocated to completed and partially completed units: | |||
Inventory in process, January 1 balance | $ | ||
To complete inventory in process, January 1 | $ | ||
Cost of completed January 1 work in process | $ | ||
Started and completed in January | $ | ||
Transferred to finished goods in January | $ | ||
Inventory in process, January 31 | |||
Total costs assigned by the Cutting Department | $ | ||
b. Compute and evaluate the change in the costs per equivalent unit for direct materials and conversion from the previous month (December). If required, round your answers to two decimal places.
Increase or Decrease | Amount | |
Change in direct materials cost per equivalent unit | $ | |
Change in conversion cost per equivalent unit |
2. Cost of Production and Journal Entries
AccuBlade Castings Inc. casts blades for turbine engines. Within the Casting Department, alloy is first melted in a crucible, then poured into molds to produce the castings. On May 1, there were 1,100 pounds of alloy in process, which were 40% complete as to conversion. The Work in Process balance for these 1,100 pounds was $125,840, determined as follows:
Direct materials (1,100 x $110) | $121,000 |
Conversion (1,100 x 40% x $11) | 4,840 |
$125,840 |
During May, the Casting Department was charged $1,091,800 for 10,300 pounds of alloy and $41,880 for direct labor. Factory overhead is applied to the department at a rate of 150% of direct labor. The department transferred out 10,700 pounds of finished castings to the Machining Department. The May 31 inventory in process was 30% complete as to conversion.
a1. Prepare the May journal entry for the Casting Department for the materials charged to production.
a2. Prepare the May journal entry for the Casting Department for the conversion costs charged to production. If an amount box does not require an entry, leave it blank.
a3. Prepare the May journal entry for the Casting Department for the completed production transferred to the Machining Department.
b. Determine the Work in Process—Casting
Department May 31 balance.
$
c. Compute the change in the costs per equivalent unit for direct materials and conversion from the previous month (April).
Cost per Equivalent Unit | ||
Change in materials | $ | |
Change in conversion |