Question

Work in Process Account Data for Two Months; A report prepared periodically by a processing department, summarizing (1) the units for which the department is accountable and the disposition of those units and (2) the costs incurred by the department and the allocation of those costs between completed and incomplete production.Cost of Production Reports

Pittsburgh Aluminum Company uses a A type of cost system that accumulates costs for each of the various departments within a manufacturing facility.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., 1,000 units, 30% completed:
	Direct materials (1,000 x $5)	$ 5,000
	Conversion (1,000 x 30% x $2.1)	630
		$ 5,630
From Smelting Department, 24,000 units		$122,400
Direct labor		34,978
Factory overhead		18,834

During September, 1,000 units in process on September 1 were completed, and of the 24,000 units entering the department, all were completed except 2,400 units that were 90% completed. Charges to Work in Process—Rolling for October were as follows:

From Smelting Department, 27,600 units	$146,280
Direct labor	40,840
Factory overhead	21,996

During October, the units in process at the beginning of the month were completed, and of the 27,600 units entering the department, all were completed except 1,300 units that were 60% 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) The number of production units that could have been completed within a given accounting period, given the resources consumed.equivalent units of production for materials and conversion, (b) The rate used to allocate costs between completed and partially completed production.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.

Answer 1

Solution 1:

Work In Process - Rolling Department
For the month of September
Particulars	Debit	Particulars	Credit
Beginning balance	$5,630.00	Transferred to finished goods	$164,850.00
Direct material from smelting	$122,400.00	Ending balance	$16,992.00
Direct labor	$34,978.00
Factory overhead	$18,834.00
Total	$181,842.00	Total	$181,842.00

Pittsburgh Aluminum Company
Rolling Department - For the month of September
Computation of Equivalent unit (FIFO)
Particulars	Physical units	Material	Conversion
Units to be accounted for:
Beginning WIP Inventory	1000
Units started this period	24000
Total unit to be accounted for	25000
Units Accounted for:
Units completed and transferred out
From beginning inventory Material - 0% Conversion - 70%	1000	0	700
Started and completed currently	21600	21600	21600
Units in ending WIP Material - 100% Conversion - 90%	2400	2400	2160
Total units accounted for	25000	24000	24460

Pittsburgh Aluminum Company
Rolling Department - For the month of September
Computation of Cost per Equivalent unit
Particulars	Total cost	Material	Conversion
Current period cost	$176,212.00	$122,400.00	$53,812.00
Equivalent units		24000	24460
Cost per equivalent unit		$5.10	$2.20

Pittsburgh Aluminum Company
Rolling Department - For the month of September
Producton cost report - FIFO
Particulars	Total cost	Material	Conversion
Cost Accounted for :
Cost assigned to unit transferred out:
Cost from beginning WIP Inventory	$5,630	$5,000	$630
Current cost added to complete beginning WIP:
Material	$0	$0
Conversion (700 * $2.20)	$1,540		$1,540
Total Cost from beginning inventory	$7,170	$5,000	$2,170
Current cost of unit started and completed:
Material (21600*$5.10)	$110,160	$110,160
Conversion (21500*$2.20)	$47,520		$47,520
Total cost of unit started and completed	$157,680	$110,160	$47,520
Total cost of unit transferred out	$164,850	$115,160	$49,690
Cost assigned to ending WIP:
Material (2400*$5.10)	$12,240	$12,240
Conversion (2160*$2.20)	$4,752		$4,752
Total ending WIP inventory	$16,992	$12,240	$4,752
Total cost accounted for	$181,842	$127,400	$54,442