Question

The Jackpots Dreams Cards Company is a card manufacturer. All direct materials are added at the beginning of production in the Finishing Department. Conversion costs are applied to all of Proball Trading Cards’ products at an even rate throughout the manufacturing process.
For August, the beginning work in process inventory for the Finishing Department was 9,600 units that averaged 65 percent complete. Ending work in process inventory was 18,500 units averaging 45 percent complete. Production data shows 188,400 units were started during the period. Beginning work in process inventory costs totaled $11,282 including $7,296 for conversion costs. For the month of August, additional costs totaling $75,264 for direct materials and $111,034 for conversion costs were added in the production department during the period.   
1) Prepare in good form a process report.

2) Prepare the journal entry to move costs to finished goods.

3) Prepare any journal entry, if required, for costs remaining in WIP.

Answer 1

1)

a) Process Report using Weighted Average Method:

	Equivalent Units of Production (EUP) - Weighted Average Method
					Units	% Mat.	EUP- Mat.	% Conv.	EUP- Conv.
	Units completed and transferred out				179500	100%	179500	100%	179500
	Units in ending inventory				18500	100%	18500	45%	8325
	Equivalent units of production						198000		187825

Cost per Equivalent Unit of Production
					Materials		Conversion
Beginning costs					$         3,986.00		$      7,296.00
During the month costs					$      75,264.00		$ 1,11,034.00
Total cost				Costs	$      79,250.00	Costs	$ 1,18,330.00
÷	Equivalent units of production			EUP	198000	EUP	187825
Cost per equivalent unit of production					$                0.40		$              0.63

Cost Assignment and Reconciliation
Cost of units transferred out				EUP	Cost/ EUP	Total Cost
Direct Materials				179500	$      0.40	$      71,845.33
Conversion				179500	$      0.63	$   1,13,085.24
Total costs transferred out						$   1,84,930.57
Cost of ending work in process				EUP	Cost/ EUP	Total Cost
Direct Materials				18500	$      0.40	$         7,404.67
Conversion				8325	$      0.63	$         5,244.76
Total cost of ending work in process						$      12,649.43
Total costs accounted for							$   1,97,580.00

b) Process Report using FIFO Method:

A)	Statement of equivalent production					Degree of completion
						Direct Material			Conversion
	Particulars	Units	Particulars	Units		%	Units		%	Units
	Opening WIP	9600	Transfer to next process:
	Material Introduced	188400	From O/p WIP	9600		-	-		35%	3360
			From Current Intro	169900		100%	169900		100%	169900
			Closing WIP	18500		100%	18500		45%	8325
		198000		198000			188400			181585

Statement of cost per equivalent production
Element of costs	Units	Costs	Cost/eq. units
Direct Material	188400	$        75,264.00	$                  0.40
Conversion	181585	$     1,11,034.00	$                  0.61
			$                  1.01

Statement of evaluation
Cost of Finished Goods
Existing cost of 9600 units =		$       11,282.00
Cost of Completing 3360 units:
Conversion cost =		$         2,054.54	( 3360 x $ 0.61)
Cost of 169900 units =		$    1,71,762.39	(169900 x $ 1.01)
	Total	$   1,85,098.93
Cost of Ending WIP
	Units	Cost/eq. units	Costs
Direct Material	18500	$                 0.40	$      7,390.57
Conversion	8325	$                 0.61	$      5,090.50
		Total	$    12,481.07

2)	Journal Entries
	Particulars			Debit	Credit
a)	Using Weighted Average Method:
	Finished Goods			$ 1,84,930.57
	To WIP - Finishing Department				$ 1,84,930.57
b)	Using FIFO Method:
	Finished Goods			$ 1,85,098.93
	To WIP - Finishing Department				$ 1,85,098.93

3) No entry required