Question

Work in Process Account Data for Two Months; Cost of Production Reports

Pittsburgh Aluminum Company uses a process cost system to record the costs of manufacturing rolled aluminum, which consists of the smelting and rolling processes. Materials are entered from smelting at the beginning of the rolling process. The inventory of Work in Process—Rolling on September 1 and debits to the account during September were as follows:

Bal., 600 units, 30% completed:
	Direct materials (600 x $7.2)	$ 4,320
	Conversion (600 x 30% x $3)	540
		$ 4,860
From Smelting Department, 14,160 units		$103,368
Direct labor		29,177
Factory overhead		15,711

During September, 600 units in process on September 1 were completed, and of the 14,160 units entering the department, all were completed except 1,000 units that were 90% completed. Charges to Work in Process—Rolling for October were as follows:

From Smelting Department, 16,300 units	$122,250
Direct labor	34,690
Factory overhead	18,686

During October, the units in process at the beginning of the month were completed, and of the 16,300 units entering the department, all were completed except 800 units that were 60% completed.

Required:

1. Enter the balance as of September 1 in a four-column account for Work in Process—Rolling. Record the debits and the credits in the account for September. Construct a cost of production report and present computations for determining (a) equivalent units of production for materials and conversion, (b) costs per equivalent unit, (c) cost of goods finished, differentiating between units started in the prior period and units started and finished in September, and (d) work in process inventory. If an amount box does not require an entry, leave it blank.

If an amount is zero, enter in a zero "0". Round cost per unit answers to the nearest cent.

Pittsburgh Aluminum Company Cost of Production Report-Rolling Department For the Month Ended September 30
	Whole Units	Equivalent Units
Units		Direct Materials (a)	Conversion (a)
Units charged to production:
Inventory in process, September 1
Received from Smelting Department
Total units accounted for by the Rolling Department
Units to be assigned costs:
Inventory in process, September 1
Started and completed in September
Transferred to finished goods in September
Inventory in process, September 30
Total units to be assigned costs

	Costs
Costs		Direct Materials				Conversion				Total Costs
Cost per equivalent unit:
Total costs for September in Rolling Department		$				$
Total equivalent units
Cost per equivalent unit (b)		$				$
Costs assigned to production:
Inventory in process, September 1										$
Costs incurred in September
Total costs accounted for by the Rolling Department										$
Costs allocated to completed and partially completed units:
Inventory in process, September 1 balance (c)										$
To complete inventory in process, September 1 (c)		$				$
Cost of completed September 1 work in process										$
Started and completed in September (c)		$
Transferred to finished goods in September (c)										$
Inventory in process, September 30 (d)
Total costs assigned by the Rolling Department										$

2. Provide the same information for October by recording the October transactions in the four-column work in process account. Construct a cost of production report, and present the October computations (a through d) listed in part (1). If an amount box does not require an entry, leave it blank.

ACCOUNT	Work in Process-Rolling Department				ACCOUNT NO.
					Balance
DATE	ITEM	POST. REF.	DEBIT	CREDIT	DEBIT	CREDIT
October 1	Balance
October 31	Smelting Dept., 16,300 units at $7.5
October 31	Direct labor
October 31	Factory overhead
October 31	Finished goods
October 31	Bal., 800 units, 60% completed

If an amount is zero, enter in a zero "0". Round cost per unit answers to the nearest cent.

Pittsburgh Aluminum Company Cost of Production Report-Rolling Department For the Month Ended October 31
	Whole Units	Equivalent Units
Units		Direct Materials (a)	Conversion (a)
Units charged to production:
Inventory in process, October 1
Received from Smelting Department
Total units accounted for by the Rolling Department
Units to be assigned costs:
Inventory in process, October 1
Started and completed in October
Transferred to finished goods in October
Inventory in process, October 31
Total units to be assigned costs

	Costs
Costs		Direct Materials				Conversion				Total Costs
Cost per equivalent unit:
Total costs for October in Rolling Department		$				$
Total equivalent units
Cost per equivalent unit (b)		$				$
Costs assigned to production:
Inventory in process, October 1										$
Costs incurred in October
Total costs accounted for by the Rolling Department										$
Costs allocated to completed and partially completed units:
Inventory in process, October 1 balance (c)										$
To complete inventory in process, October 1 (c)		$				$
Cost of completed October 1 work in process										$
Started and completed in October (c)
Transferred to finished goods in October (c)										$
Inventory in process, October 31 (d)
Total costs assigned by the Rolling Department										$

Answer 1

Solotion 1:
Account	Work in Pocess- Rolling Department
				Balance
Date	Item	Debit	Credit	Debit	Credit
01-Sep	Balance			$4,860
30-Sep	Smelting Department	$1,03,368		$1,08,228
30-Sep	Direct labor	29177		$1,37,405
30-Sep	Factory Overhead	15711		$1,53,116
30-Sep	Finished Goods		$1,43,026	$10,090
30-Sep	Ending balance			$10,090
	Pittsburgh Aluminum Company.
	Cost of Production Report-Rolling Department
	For the Month Ended September 30
	UNITS	Whole Units	Equivalent Units
	Direct Materials	Conversion
	Units charged to production:
	Inventory in process, September 1	600
	Received from Smelting Department	14160
	Total units accounted for by the Rolling Department	14760
	Units to be assigned costs:
	Inventory in process, September 1	600	0	420
	Started and completed in September (14160-1000)	13160	13160	13160
	Transferred to Finished goods in September	13760	13160	13580
	Inventory in process, September 30	1000	1000	900
	Total units to be assigned costs	14760	14160	14480
	COSTS	Costs
	Direct Materials	Conversion	Total
	Cost per equivalent unit:
	Total costs for September in Rolling Department	$1,03,368	$44,888
	/Total equivalent units	14160	14480
	Cost per equivalent unit	$7.30	$3.10	$10.40
	Costs assigned to production:
	Inventory in process, September 1			$4,860
	Costs incurred in September			$1,48,256
	Total costs accounted for by the Rolling Department			$1,53,116
	Costs allocated to completed and partially completed units:
	Inventory in process, September 1-balance			$4,860
	To complete inventory in process, September 1	$0	$1,302	$1,302
	Cost of completed September 1 work in process			$6,162
	Started and completed in September	$96,068	$40,796	$1,36,864
	Transferred to Finished goods in September			$1,43,026
	Inventory in process, September 30	$7,300	$2,790	$10,090
	Total costs assigned by the Rolling Department			$1,53,116

Solution 2:
Account	Work in Pocess- Rolling Department
				Balance
Date	Item	Debit	Credit	Debit	Credit
01-Oct	Balance			$10,090
31-Oct	Smelting department	$1,22,250		$1,32,340
31-Oct	Direct labor	$34,690		$1,67,030
31-Oct	Factory Overhead	$18,686		$1,85,716
31-Oct	Finished Goods		$1,80,889	$4,827
31-Oct	Ending Balance			$4,827
	Pittsburgh Aluminum Company.
	Cost of Production Report-Rolling Department
	For the Month Ended October 31
	UNITS	Whole Units	Equivalent Units
	Direct Materials	Conversion
	Units charged to production:
	Inventory in process, October 1	1000
	Received from Smelting Department	16300
	Total units accounted for by the Rolling Department	17300
	Units to be assigned costs:
	Inventory in process, October 1	1000	0	100
	Started and completed in October (16300-800)	15500	15500	15500
	Transferred to Finished goods in October	16500	15500	15600
	Inventory in process, October 31	500	500	300
	Total units to be assigned costs	17000	16000	15900
	COSTS	Costs
	Direct Materials	Conversion	Total
	Cost per equivalent unit:
	Total costs for October in Rolling Department	$1,22,250	$53,376
	/Total equivalent units	16000	15900
	Cost per equivalent unit	$7.64	$3.36	$11.00
	Costs assigned to production:
	Inventory in process, October 1			$10,090
	Costs incurred in October			$1,75,626
	Total costs accounted for by the Rolling Department			$1,85,716
	Costs allocated to completed and partially completed units:
	Inventory in process, October 1-balance			$10,090
	To complete inventory in process, October 1	$0	$336	$336
	Cost of completed October 1 work in process			$10,426
	Started and completed in October	$1,18,430	$52,033	$1,70,463
	Transferred to Finished goods in October			$1,80,889
	Inventory in process, October 31	$3,820	$1,007	$4,827
	Total costs assigned by the Rolling Department			$1,85,716