Question

In the Mixing Dept., the direct materials are added at the beginning of the process and the conversion costs are incurred evenly throughout the process. Work in process of the mixing Dept. on March 1, 2018 consisted of 900 batches of crayons that were 60% of the way through the production process.

The beginning balance in WIP Inventory - Mixng was $30,700 which consited of $11,500 in direct materias cost and $19,200 in conversion costs.

During March, 4600 batches were started in production. The Mixing Dept. transferred 3,600 batches to the Molding Dept. In March, and 1,900 were still in process on March 31. The ending inventory was 30% of the way through the mixing process. Company uses the FIFO process costing.

WIP - Inventory

BL on MAr 1 : 30,700

Direct Materials: 36,800

MOH : 52,750

1-Prepare a production cost report for Mixing Dept. for March. Roud equivalent unit of production costs to four decimal places. ROund other costs to nearest whole dollar. Round cost per unit amounts to four decimal places.

2- Journalize all transactions affecting the Mixing Dept. during March, including the entries that have already been posted. Assume labor cost are accrued and not yet paid.

Answer 1

Req 1: Production cost report as per FIFO:

UNITS TO ACCOUNT FOR:
Beginning Work in Process units				900
Add: Units Started in Process				4,600
Total Units to account for:				5,500
UNITS TO BE ACCOUNTED FOR:
Units completed from Beginning WIP				900
Units started and completed				2,700
Ending Work in Process				1,900
Total Units to be accounted for:				5,500
Equivalent Units:
			Material Cost		Conversion
			% Completion	Units	% Completion	Units
Units completed from Beg. WIP			0%	0	40%	360
Units started and completed			100%	2,700	100%	2,700
Ending Work in Process			100%	1,900	30%	570
Total Equivalent units				4,600		3,630
TOTAL COST TO ACCOUNT FOR:
			Material		Conversion
Cost Added during May			36,800		52,750
Total Cost to account for:			36,800		52,750
Total Cost to account for:					89,550
COST PER EQUIVALENT UNIT:
			Material		Conversion
Total cost added during the year			36,800		52,750
Equivalent Units			4,600		3,630
Cost per Equivalent unit			8		14.5317
TOTAL COST ACCOUNTED FOR:
Units Completed from Beginning WIP (900 units)
			Equivalent unit	Cost per EU	Total Cost
Beginning Cost					30700
Material			0	8	0
Conversion Cost			360	14.5317	5231
Cost of units completed from Beg WIP					35931
Units started and Transferred out (2,700 units)
			Equivalent unit	Cost per EU	Total Cost
Material			2,700	8	21600
Conversion Cost			2,700	14.5317	39236
Total Cost of Units completed and transferred out:					60836
Ending Work in process (1,900 units)
			Equivalent unit	Cost per EU	Total Cost
Material			1,900	8	15200
Conversison Cost			570	14.5317	8283
Total cost of Ending Work in process:					23,483

Req 2: The journal entry are as follows:

Work in process-Mixing deptt Inventory Account Dr.        $ 89550

          Raw material inventory Account                                             $ 36,800

          Wages payable Account/ Manufacturing overheads Account $ 52,750

(for cost applied to work in process account)

Work In process Inventory-Molding deptt Account Dr.         $96767

          Work in Process Inventory-Mixing Deptt ($ 35931+60836)     $ 96767

(for goods completed transferred to next process)