Question

Seacrest Company uses a process costing system. The company manufactures a product that is processed in two departments: A and B. As work is completed, it is transferred out. All inputs are added uniformly in Department A. The following summarizes the production activity and costs for November:

	Department A	Department B
Beginning inventories:
Physical units	5,000	8,000
Costs:
Transferred in	—	$45,320
Direct materials	$10,000	—
Conversion costs	$6,900	$16,800
Current production:
Units started	25,000	?
Units transferred out	28,000	33,000
Costs:
Transferred in	—	?
Direct materials	$57,800	$37,950
Conversion costs	$95,220	$128,100
Percentage completion:
Beginning inventory	40%	50%
Ending inventory	80%	50%

1(c) Using the weighted average method, prepare a calculation of unit costs for Department A. Refer to the list of Amount Descriptions for the exact wording of text items within your schedule. Round to two decimal places. (Note: Be sure to enter the unit cost below the table.)

Department A—Cost Schedule

1		Materials	Conversion	Total
2
3
4

What is the unit cost?

1(d) Using the weighted average method, calculate the cost of EWIP and cost of goods transferred out for Department A.

Cost of EWIP:$ ____

Cost of goods transferred out: $_____

1(e) Using the weighted average method, prepare a cost reconciliation for Department A. Refer to the list of Amount Descriptions for the exact wording of text items within your schedule.

Note: Costs to account for and Costs accounted for will differ due to rounding.

Department A—Cost Reconciliation

1	Costs to account for:
2
3
4
5	Costs accounted for:
6
7
8

2. CONCEPTUAL CONNECTION: (a) Prepare journal entries on Nov. 30 that show the flow of manufacturing costs for Department A. Use a conversion cost control account for conversion costs. Refer to the Chart of Accounts for the exact wording of account titles. (Note: Be sure to complete part (b) below the journal.)

GENERAL JOURNAL

	DATE	ACCOUNT	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6

Answer 1

1.

	Physical units	Material	Conversion
Units to account for
Work in Process Beginning	5000
Started during the period	25000
Total units to account for	30000
Units Accounted for
Completed and transferred	28000	28000	28000
Work in Process Ending	2000	2000	1600
Total Units Accounted for	30000
Equivalent units		30000	29600
	Material	Conversion	Total
Cost of Beginning Work in Process	$          10,000	$            6,900	$             16,900
Cost added during the period	$          57,800	$          95,220	$           153,020
Total Cost to account for	$          67,800	$       102,120	$           169,920
Equivalent units of Production	30000	29600
Cost per equivalent unit	$              2.26	$              3.45	$                 5.71
	Material	Conversion	Total
Units Completed and transferred out
Units transferred to next department	28000	28000
Cost per equivalent unit	$              2.26	$              3.45
Cost of units transferred out	$          63,280	$          96,600	$           159,880
	Material	Conversion	Total
Ending work in Process Inventory
Equivalent units of Production	2000	1600
Cost per equivalent unit	$              2.26	$              3.45
Cost of Ending work in Process Inventory	$            4,520	$            5,520	$             10,040
Total Costs Accounted for	$          67,800	$       102,120	$           169,920
Reconciliation
Costs to be accounted for :
Cost of beginning work in process inventory	$          16,900
Costs added to the production during the year	$        153,020
Total Costs to be accounted for	$       169,920
Cost of Ending work in Process Inventory	$          10,040
Cost of units transferred out	$        159,880
Total Costs accounted for	$       169,920

2.

Account Titles	Debit	Credit
Work in Process Inventory - Dept A	$          57,800
Raw Material Inventory		$          57,800
Work in Process Inventory - Dept A	$          95,220
Conversion Cost Control		$          95,220
Work in Process Inventory - Dept B	$        159,880
Work in Process Inventory - Dept A		$        159,880