Question

Dengo Co. makes a trail mix in two departments: roasting and blending. Direct materials are added at the beginning of each process, and conversion costs are added evenly throughout each process. The company uses the FIFO method of process costing. During October, the roasting department completed and transferred 23,000 units to the blending department. Of the units completed, 3,400 were from beginning inventory and the remaining 19,600 were started and completed during the month. Beginning work in process was 100% complete with respect to direct materials and 40% complete with respect to conversion. The company has 2,800 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. Information on the roasting department’s costs of beginning work in process inventory and costs added during the month follows. Cost Direct Materials Conversion Of beginning work in process inventory $ 10,300 $ 111,690 Added during the month 266,560 1,117,584 Problem 16-7A Part 1 Required: 1. Prepare the roasting department's process cost summary for October using the FIFO method. (Round "Cost per EUP" to 2 decimal places.) 2. Prepare the journal entry dated October 31 to transfer the cost of completed units to the blending department. (Do not round your intermediate calculations.) *please show all parts.*

Answer 1

1.

Dengo Co.
Roasting Department
Process Cost Summary
For the Month of October
Total costs to account for:
Beginning work in process	121990
Direct material incurred this period	266560
Conversion costs incurred this period	1117584
Total costs to account for:	1506134
Total costs accounted for	1506134
Difference due to rounding cost/unit	0
Units to account for:
Units, beginning work in process	3400
Units started	22400
Total units to account for	25800
Units accounted for:
Units, ending work in process	2800
Units completed and transferred out	23000
Units accounted for	25800
Equivalent units of production (EUP) - FIFO
	Direct Materials	Conversion Costs
Units started and completed	19600	19600
Units to complete in BWIP:
3400 x 60%	0	2040
Units in EWIP:
2800 x 100%	2800
2800 x 80%		2240
Total equivalent units	22400	23880
Cost per equivalent unit of production
	Direct Materials	Conversion Costs	Total
Costs added during December	266560	1117584	1384144
Equivalent units	22400	23880
Cost per EUP $	11.90	46.80	58.70
Total costs accounted for:
Cost of units transferred out:	Direct Materials	Conversion Costs	Total cost
Cost of beginning work in process	10300	111690	121990
Cost incurred on beginning work in process (2040 x $46.80)		95472	95472
Cost of units started and completed:
Direct materials (19600 x $11.90)	233240		233240
Conversion (19600 x $46.80)		917280	917280
Total costs transferred out	243540	1124442	1367982
Costs of ending work in process	Direct Materials	Conversion Costs	Total cost
Direct materials (2800 x $11.90)	33320		33320
Conversion (2240 x $46.80)		104832	104832
Total cost of ending work in process	33320	104832	138152
Total costs accounted for				1506134

2.

Account Title and Explanation	Debit	Credit
Work in process-Blending department	1367982
Work in process-Roasting department		1367982
(To record cost of units transferred from roasting to blending department)