Question

The July production of Bait Buckets for Flying Angler’s Supply Division consisted of batch X337 (2,000 deluxe) and batch Z444 (4,000 basic). Each batch was started and finished during July, and there was no beginning or ending work in process. Costs incurred were as follows:

Direct Material:

Batch X337, $42,000, including $2,500 for packaging material; batch Z444, $45,000.

Conversion Costs:

Preparation Department, predetermined rate of $7.50 per unit; Finishing Department, predetermined rate of $6.00 per unit; Packaging Department, predetermined rate of $.50 per unit. (Only the deluxe buckets are packaged.)

Required:

1. Compute the July product cost for each type of bait bucket.

     2. Prepare journal entries to record the cost flows during July.

Answer 1

Req 1.
Job cost sheet:
			X337	Z444
Material			42000	45000
Conversion cost
Preparation deptt @ 7.50			15000	30000
Finishing deptt @ 6			12000	24000
Packagin deptt @ 0.50			1000
Job cost sheet			70000	99000
Req 2.
S.no.	Accounts title and explanations				Debit $	Credit$
a.	Work in process-Job X337 Dr.				42000
	Work in process-Job Z444 Dr.				45000
	Raw material inventory					87000
b.	Work in process-Job X337 Dr.				15000
	Work in process-Job Z444 Dr.				30000
	Manufacturing overheads-Preparation					45000
c.	Work in process-Job X337 Dr.				12000
	Work in process-Job Z444 Dr.				24000
	Manufacturing overheads-Finishing					36000
d.	Work in process-Job X337 Dr.				1000
	Manufacturing overheads-Packaging					1000
e.	Finished Goods inventory Dr.				169000
	Work in process-Job X337					70000
	Wrk in process-Job Z444					99000