Question

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
(3,400 units, 70% completed):
	Direct materials (3,400 x $16.80)	$57,120
	Conversion (3,400 x 70% x $10.90)	25,942
		$83,062

The following costs were charged to Work in Process—Filling during January:

Direct materials transferred from Reaction
	Department: 43,900 units at $16.50 a unit	$724,350
Direct labor		245,730
Factory overhead		236,102

During January, 43,500 units of specialty chemicals were completed. Work in Process—Filling Department on January 31 was 3,800 units, 40% 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 $
Received from Reaction Department $
Total units accounted for by the Filling Department $
Units to be assigned costs: Equivalent Units Whole Units Direct Materials Conversion Inventory in process, January 1    Started and completed in January Transferred to finished goods in January Inventory in process, January 31 Total units to be assigned costs Cost Information Costs per equivalent unit: Direct Materials Conversion Total costs for January in Filling Department $ $ Total equivalent units Cost per equivalent unit $ $ Costs charged to production: Direct Materials Conversion Total Inventory in process, January 1 $ Costs incurred in January Total costs accounted for by the Filling Department $ Cost allocated to completed and partially completed units: Inventory in process, January 1 balance $ To complete inventory in process, January 1 Cost of completed January 1 work in process $ Started and completed in January $ Transferred to finished goods in January $ Inventory in process, January 31 Total costs assigned by the Filling Department 2. Journalize the entries for (1) costs transferred from Reaction to Filling and (2) the cost transferred from Filling to Finished Goods. (1) (2) $

Answer 1

Solution 1:

Dover Chemical Company
Filling Department
Computation of Equivalent unit (FIFO)
Particulars	Physical units	Material	Conversion
Units to be accounted for:
Beginning WIP Inventory	3400
Units started this period	43900
Total unit to be accounted for	47300
Units Accounted for:
Units completed and transferred out
From beginning inventory Material - 0% Conversion - 30%	3400	0	1020
Started and completed currently	40100	40100	40100
Transferred to finished goods	43500	40100	41120
Units in ending WIP Material - 100% Conversion - 40%	3800	3800	1520
Total units accounted for	47300	43900	42640

Dover Chemical Company
Filling Department
Computation of Cost per Equivalent unit
Particulars	Total cost	Material	Conversion
Current period cost	$1,206,182.00	$724,350.00	$481,832.00
Equivalent units		43900	42640
Cost per equivalent unit		$16.50	$11.30

Dover Chemical Company
Filling Department
Producton cost report - FIFO
Particulars	Total cost	Material	Conversion
Cost Accounted for :
Cost assigned to unit transferred out:
Cost from beginning WIP Inventory	$83,062	$57,120	$25,942
Current cost added to complete beginning WIP:
Material	$0	$0
Conversion (1020 * $11.30)	$11,526		$11,526
Total Cost from beginning inventory	$94,588	$57,120	$37,468
Current cost of unit started and completed:
Material (40100*$16.50)	$661,650	$661,650
Conversion (40100*$11.30)	$453,130		$453,130
Total cost of unit started and completed	$1,114,780	$661,650	$453,130
Total cost of unit transferred out	$1,209,368	$718,770	$490,598
Cost assigned to ending WIP:
Material (3800*$16.50)	$62,700	$62,700
Conversion (1520*$11.30)	$17,176		$17,176
Total ending WIP inventory	$79,876	$62,700	$17,176
Total cost accounted for	$1,289,244	$781,470	$507,774

Solution 2:

Journal Entries - Dover Chemical Company
S. No.	Particulars	Debit	Credit
1	Work In Process - Filling Department Dr	$724,350.00
	To Work In Process - Reaction Department		$724,350.00
	(Being cost of goods completed in reaction transferred to Filling department)
2	Finished Goods Inventory Dr	$1,209,368.00
	To Work In Process - Filling Department		$1,209,368.00
	(Being completed units transferred to finished goods)