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Palcic Manufacturing Company uses a process cost system. The Molding Department adds materials at the beginning...

Palcic Manufacturing Company uses a process cost system. The Molding Department adds materials at the beginning of the process and conversion costs are incurred uniformly throughout the process. Work in process on May 1 was 75% complete and work in process on May 31 was 40% complete.

Instructions

Part A: Complete the Production Cost Report for the Molding Department for the month of May using the above information and the information below.

PALCIC MANUFACTURING COMPANY

Molding Department

Production Cost Report

For the Month Ended May 31, 2018

                                                                                                                Equivalent Units             

QUANTITIES                                Physical Units                   Materials             Conversion Costs

Units to be accounted for

      Work in process, May 1                    16,000

      Started into production                      50,000

Total units                                               66,000

Units accounted for

      Transferred out                                ______                       _______                       _______

      Work in process, May 31                  20,000                       _______                       _______                                                 

Total units                                              ______                       _______                       _______                                                                                           

COSTS

Unit costs                                                      Materials         Conversion Costs              Total     

      Costs in May                                             $198,000                $135,000                $333,000

      Equivalent units                                        ______                    _______                  _______                                                        

      Unit costs                                                $______                  $______                  $  ______           

Costs to be accounted for

      Work in process, May 1                                                                                          $ 83,000

      Started into production**                                                                                        250,000

Total costs                                                                                                                 $333,000

Cost Reconciliation Schedule

Costs accounted for

      Transferred out to assembly department                                                                $

      Work in process, May 31

            Materials                                                                            $

            Conversion costs                                                                ______                        ______                      

Total costs                                                                                                                                      $______ .          

Part B: journalize all the transactions from above (current period manufacturing costs and transfer to next department – Packaging Department in this case).

**NOTE: Started into production costs (current period costs) breakdown as follows

Material costs: $85,000      Direct Labor: $100,000           Manufacturing Overhead: $65,000

Solutions

Expert Solution

Part A:

PALCIC MANUFACTURING COMPANY
Molding Department
Production Cost Report
For the Month Ended May 31, 2018
Equivalent Units
QUANTITIES Physical Units Materials Conversion Costs
Units to be accounted for:
Work in process, May 1 16000
Started into production 50000
Total units 66000
Units accounted for:
Transferred out 46000 46000 46000
Work in process, May 31 20000 20000 8000
Total units 66000 66000 54000
COSTS
Unit costs: Materials Conversion Costs Total
Costs in May $ 198000 135000 333000
Equivalent units 66000 54000
Unit costs $ 3.00 2.50 5.50
Costs to be accounted for:
Work in process, May 1 $ 83000
Started into production $ 85000 165000 250000
Total costs $ 333000
Cost Reconciliation Schedule
Costs accounted for:
Transferred out to assembly department $ (46000 x $5.50) 253000
Work in process, May 31
Materials $ (20000 x $3) 60000
Conversion costs $ (8000 x $2.50) 20000 80000
Total costs $ 333000

Part B:

No. Account Titles and Explanation Debit Credit
1 Work in process-Molding department 250000
Materials Inventory 85000
Wages payable 100000
Manufacturing overheads 65000
(To record current period manufacturing costs)
2 Work in process-Packaging department 253000
Work in process-Molding department 253000
(To record transfers from Molding to Packaging department)

Note: Production cost report refers to transfer to assembly department while part B refers to transfer to packaging department. Please confirm department to which transferred.

ekkarill92 answered 10 months ago
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