In: Accounting
Equivalent Units and Related Costs; Cost of Production Report; Entries
Dover Chemical Company manufactures specialty chemicals by a series of three processes, all materials being introduced in the Distilling Department. From the Distilling Department, the materials pass through the Reaction and Filling departments, emerging as finished chemicals.
The balance in the account Work in Process—Filling was as follows on January 1:
Work in Process—Filling Department | ||
(3,000 units, 30% completed): | ||
Direct materials (3,000 x $11.30) | $33,900 | |
Conversion (3,000 x 30% x $7.30) | 6,570 | |
$40,470 |
The following costs were charged to Work in Process—Filling during January:
Direct materials transferred from Reaction | ||
Department: 38,700 units at $11.00 a unit | $425,700 | |
Direct labor | 156,860 | |
Factory overhead | 150,712 |
During January, 38,400 units of specialty chemicals were completed. Work in Process—Filling Department on January 31 was 3,300 units, 90% completed.
Required:
1. Prepare a cost of production report for the Filling Department for January. If an amount is zero, enter "0". If required, round your cost per equivalent unit answers to two decimal places.
Dover Chemical Company | |||
Cost of Production Report-Filling Department | |||
For the Month Ended January 31 | |||
Unit Information | |||
Units charged to production: | |||
Inventory in process, January 1 | fill in the blank 14499a00dfcafa6_1 | ||
Received from Reaction Department | fill in the blank 14499a00dfcafa6_2 | ||
Total units accounted for by the Filling Department | fill in the blank 14499a00dfcafa6_3 | ||
Units to be assigned costs: | |||
Equivalent Units | |||
Whole Units | Direct Materials | Conversion | |
Inventory in process, January 1 | fill in the blank 14499a00dfcafa6_4 | fill in the blank 14499a00dfcafa6_5 | fill in the blank 14499a00dfcafa6_6 |
Started and completed in January | fill in the blank 14499a00dfcafa6_7 | fill in the blank 14499a00dfcafa6_8 | fill in the blank 14499a00dfcafa6_9 |
Transferred to finished goods in January | fill in the blank 14499a00dfcafa6_10 | fill in the blank 14499a00dfcafa6_11 | fill in the blank 14499a00dfcafa6_12 |
Inventory in process, January 31 | fill in the blank 14499a00dfcafa6_13 | fill in the blank 14499a00dfcafa6_14 | fill in the blank 14499a00dfcafa6_15 |
Total units to be assigned costs | fill in the blank 14499a00dfcafa6_16 | fill in the blank 14499a00dfcafa6_17 | fill in the blank 14499a00dfcafa6_18 |
Cost Information | |||
Costs per equivalent unit: | |||
Direct Materials | Conversion | ||
Total costs for January in Filling Department | $fill in the blank 14499a00dfcafa6_19 | $fill in the blank 14499a00dfcafa6_20 | |
Total equivalent units | fill in the blank 14499a00dfcafa6_21 | fill in the blank 14499a00dfcafa6_22 | |
Cost per equivalent unit | $fill in the blank 14499a00dfcafa6_23 | $fill in the blank 14499a00dfcafa6_24 | |
Costs charged to production: | |||
Direct Materials | Conversion | Total | |
Inventory in process, January 1 | $fill in the blank 14499a00dfcafa6_25 | ||
Costs incurred in January | fill in the blank 14499a00dfcafa6_26 | ||
Total costs accounted for by the Filling Department | $fill in the blank 14499a00dfcafa6_27 | ||
Cost allocated to completed and partially completed units: | |||
Inventory in process, January 1 balance | $fill in the blank 14499a00dfcafa6_28 | ||
To complete inventory in process, January 1 | $fill in the blank 14499a00dfcafa6_29 | $fill in the blank 14499a00dfcafa6_30 | fill in the blank 14499a00dfcafa6_31 |
Cost of completed January 1 work in process | $fill in the blank 14499a00dfcafa6_32 | ||
Started and completed in January | fill in the blank 14499a00dfcafa6_33 | fill in the blank 14499a00dfcafa6_34 | fill in the blank 14499a00dfcafa6_35 |
Transferred to finished goods in January | $fill in the blank 14499a00dfcafa6_36 | ||
Inventory in process, January 31 | fill in the blank 14499a00dfcafa6_37 | fill in the blank 14499a00dfcafa6_38 | fill in the blank 14499a00dfcafa6_39 |
Total costs assigned by the Filling Department | $fill in the blank 14499a00dfcafa6_40 |
2. Journalize the entries for (1) costs transferred from Reaction to Filling and (2) the costs transferred from Filling to Finished Goods.
(1) | fill in the blank f6f1b2019f91fff_2 | ||
fill in the blank f6f1b2019f91fff_4 | |||
(2) | fill in the blank f6f1b2019f91fff_6 | ||
fill in the blank f6f1b2019f91fff_8 |
3. Determine the increase or decrease in the cost per equivalent unit from December to January for direct materials and conversion costs. If required, round your answers to two decimal places.
Increase or Decrease | Amount | |
Change in direct materials cost per equivalent unit | $fill in the blank 989156f3f03c012_2 | |
Change in conversion cost per equivalent unit | fill in the blank 989156f3f03c012_4 |
4. The cost of production report may be used as the basis for allocating product costs between and . The report can also be used to control costs by holding each department head responsible for the units entering production and the costs incurred in the department. Any differences in unit product costs from one month to another, such as those in part (3), can be studied carefully and any significant differences investigated.
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Workings | |
Goods transferred out in Jan | Physical Units |
Opening work in process | 3,000.00 |
Add: Materials received | 38,700.00 |
Less: Closing work in process | 3,300.00 |
Goods transferred out in Jan | 38,400.00 |
Started and completed in Jan | Note B |
Goods transferred out in Jan | 38,400.00 |
Less: Opening work in process | 3,000.00 |
Started and completed in Jan | 35,400.00 |
Dover Chemical Company | |
Answer 1 | |
Cost of Production Report-Filling Department | |
For the Month Ended Jan 31 | |
Unit information | |
Units charged to production: | Physical Units |
Inventory in process Jan 1 | 3,000.00 |
Direct materials received | 38,700.00 |
Total units accounted for by the Filling Department | 41,700.00 |
Equivalent Units | |||
Units to be assigned costs: | Physical Units | Materials | Conversion |
Inventory in process Jan 1 | 3,000.00 | - | 2,100.00 |
Started and completed in Jan | 35,400.00 | 35,400.00 | 35,400.00 |
Goods transferred out in Jan | 38,400.00 | 35,400.00 | 37,500.00 |
Inventory in process, Jan 31 | 3,300.00 | 3,300.00 | 2,970.00 |
Total units to be assigned costs: | 41,700.00 | 38,700.00 | 40,470.00 |
Cost Information | |||
Costs per equivalent unit | Total | Materials | Conversion |
Total costs for Jan in Filling Department | 733,272.00 | 425,700.00 | 307,572.00 |
Total equivalent units | 38,700.00 | 40,470.00 | |
Cost per equivalent unit | 18.60 | 11.00 | 7.60 |
Costs assigned to production: | |||
Inventory in process, Jan 1 | 40,470.00 | 33,900.00 | 6,570.00 |
Costs incurred in Jan | 733,272.00 | 425,700.00 | 307,572.00 |
Total costs accounted for by the Filling Department | 773,742.00 | ||
Costs allocated to completed and partially completed units | |||
Inventory in process, Jan 1 balance | 40,470.00 | 33,900.00 | 6,570.00 |
To complete inventory in process, Jan 1 | 15,960.00 | - | 15,960.00 |
Cost of completed Jan 1 work in process | 56,430.00 | 33,900.00 | 22,530.00 |
Started and completed in Jan | 658,440.00 | 389,400.00 | 269,040.00 |
Transferred to Finished Goods in Jan | 714,870.00 | ||
Inventory in process, Jan 31 | 58,872.00 | 36,300.00 | 22,572.00 |
Total costs assigned by the Filling Department | 773,742.00 |
Answer 2 | ||
Account | Debit $ | Credit $ |
Work in Process- Filling Dept. | 733,272.00 | |
Work in Process- Reaction Dept. | 733,272.00 | |
Finished Goods | 714,870.00 | |
Work in Process- Filling Dept. | 714,870.00 | |
Answer 3 | |||
Calculation of beginning Costs per equivalent unit | Physical Units | Materials | Conversion |
Inventory in process Jan 1 | 3,000.00 | 3,000.00 | 900.00 |
Costs | 33,900.00 | 6,570.00 | |
Beginning Costs per equivalent unit | 11.30 | 7.30 |
Materials | Amount $ |
Beginning Costs per equivalent unit | 11.30 |
Costs per equivalent unit for Jan | 11.00 |
Decrease by | (0.30) |
Conversion | Amount $ |
Beginning Costs per equivalent unit | 7.30 |
Costs per equivalent unit for Jan | 7.60 |
Increase by | 0.30 |
Answer 4 | |
The statement is true. |