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., 800 units, 20% completed:

Direct materials (800 x $4.6) $ 3,680

Conversion (800 x 20% x $1.9) 304

$ 3,984

From Smelting Department, 18,320 units $86,104

Direct labor 23,764

Factory overhead 12,796

During September, 800 units in process on September 1 were completed, and of the 18,320 units entering the department, all were completed except 1,700 units that were 60% completed. Charges to Work in Process—Rolling for October were as follows:

From Smelting Department, 21,100 units $103,390

Direct labor 29,590

Factory overhead 15,938

During October, the units in process at the beginning of the month were completed, and of the 21,100 units entering the department, all were completed except 1,000 units that were 90% 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.

ACCOUNT Work in Process-Rolling Department ACCOUNT NO.

BALANCE

DATE ITEM POST. REF. DEBIT CREDIT DEBIT CREDIT

Sept. 1 Bal., 800 units, 20% completed

3,984

3,984

Sept. 30 Smelting Dept., 18,320 units at $4.7

86,104

Sept. 30 Direct labor

23,764

Sept. 30 Factory overhead

12,796

Sept. 30 Finished goods

Sept. 30 Bal., 1,700 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 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., 21,100 units at $4.9

October 31 Direct labor

October 31 Factory overhead

October 31 Finished goods

October 31 Bal., 1,000 units, 90% 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 $

3. The cost per equivalent unit for direct materials

from August to October. The cost per equivalent unit for conversion costs

from August to October. These changes

be investigated for their underlying causes, and any necessary corrective actions should be taken.

Answer 1

Work in Process-Rolling
1	Date	Item	Debit	Credit	Balance Dr.	Balance Cr.
2	Sept. 1	Balance			$3,984
3	30	Smelting Department	86104		$90,088
4	30	Direct labor	23764		$113,852
5	30	Factory overhead	12796		$126,648
6	30	Finished goods		$116,618	$10,030
Cost of Production Report-Rolling Department
For the Month Ended September 30, 2016
UNITS		Whole Units	Equivalent Units
			Direct Materials	Conversion
Units charged to production:
Inventory in process, September 1		800
Received from Smelting Department		18320
Total units accounted for by the Rolling Department		19120
Units to be assigned costs:
Inventory in process, September 1 (   completed) b		800	0	640	(800*80%)
Started and completed in September a		16620	16620	16620
Transferred to finished goods in September (19120-1700)		17420	16620	17260
Inventory in process, September 30 (   completed) e		1700	1700	1020	(1700*60%)
Total units to be assigned costs		19120	18320	18280
COSTS		Costs
		Direct Materials	Conversion	Total
Costs per equivalent unit:
Total costs for September in Rolling Department		86104	36560	122664
Total equivalent units		18320	18280	÷
Costs per equivalent unit C		4.7	2
Costs assigned to production:
Inventory in process, September 1				$3,984
Costs incurred in September				122664
Total costs accounted for by the Rolling Department				$126,648
Cost allocated to completed and
partially completed units:
Inventory in process, September 1 balance				$3,984
To complete inventory in process, September 1 (640*2)		0	1280	1280
Cost of completed September 1 work in process				$5,264
Started and completed in September (a*c)		78114	33240	111354
Transferred to finished goods in September				$116,618
Inventory in process, September 30 (e*c)		7990	2040	10030
Total costs assigned by the Rolling Department				$126,648
Work in Process-Rolling
1	Date	Item	Debit	Credit	Balance Dr.	Balance Cr.
	30	Balance			$10,030
	Oct. 31	Smelting Department	103390		$113,420
	31	Direct labor	29590		$143,010
	31	Factory overhead	15938		$158,948
	31	Finished goods		$152,158	$6,790
	31	Balance
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, September 1		1700
Received from Smelting Department		21100
Total units accounted for by the Rolling Department		22800
Units to be assigned costs:
Inventory in process, September 1 (   completed) b		1700	0	680	(1700*40%)
Started and completed in Oct a		20100	20100	20100
Transferred to finished goods in Oct		21800	20100	20780
Inventory in process, October 31 (   completed) e		1000	1000	900
Total units to be assigned costs		22800	21100	21680
COSTS		Costs
		Direct Materials	Conversion	Total
Costs per equivalent unit:
Total costs for September in Rolling Department		103390	45528	148918
Total equivalent units		21100	21680	÷
Costs per equivalent unit C		4.9	2.1
Costs assigned to production:
Inventory in process, September 1				$10,030
Costs incurred in September				148918
Total costs accounted for by the Rolling Department				$158,948
Cost allocated to completed and
partially completed units:
Inventory in process, October 1 balance				$10,030
To complete inventory in process, October 1 (a*e)		0	1428	1428
Cost of completed Octoberber 1 work in process				$11,458
Started and completed in October (a*c)		98490	42210	140700
Transferred to finished goods in October				$152,158
Inventory in process, October 30 (e*c)		4900	1890	6790
Total costs assigned by the Rolling Department				$158,948
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