Question

Work in Process—Forming
Beginning inventory, October 1	26,482
Direct materials	169,798
Conversion costs	162,400
Ending inventory	?

The Forming Department had 10,350 partially complete units in beginning work in process inventory. The department started work on 76,250 units during the month and ended the month with 8,600 units still in work in process. These unfinished units were? 60% complete as to direct materials but? 20% complete as to conversion work. The beginning balance of $26,482 consisted of $21,470 of direct materials and $5,012 of conversion costs.

Requirement

Journalize the transfer of costs to the Finishing Department. ?(Hint?: Complete the? five-step process costing procedure to determine how much cost to? transfer.)

We need to begin the? five-step process costing procedure by first summarizing the units to account for and computing the equivalent units.

Smithson Roping
Forming Department
Physical Flow of Units and Equivalent Units
	Flow of	Equivalent Units
	Physical	Direct	Conversion
Flow of Production	Units	Materials	Costs
Units to account for:
Units accounted for:
Total equivalent units

The next step is calculating the cost per equivalent unit. ?(Round the cost per equivalent unit to the nearest? cen

Smithson Roping
Forming Department
Cost per Equivalent Unit
	Direct	Conversion
	Materials	Costs	Total
Cost per equivalent unit

Now we can calculate the total cost of the units completed and transferred out and the ending work in process. ?(Enter quantities? first, then the cost per equivalent unit amounts in the same order as calculated in the preceding step. Round your answers to the nearest whole? dollar.)

Smithson Roping
Forming Department
Assignment of Costs
	Assign costs:	Direct Materials			Conversion Costs				Total
			x (		+		)
			x
							x
	Total cost accounted for

Answer 1

Beggining units	10350	Transferred out	78,000
Started intro production	76250	Ending units	8,600
Units accounted for	86600		86600
Equivalent units	Material	Conversion cost
Units transferred                      A	78000	78000
Ending Units	8,600	8,600
Completion	60%	20%
B	5160	1720
Total units	83160	79720
Cost per equivalent units
Particulars	Material	Conversion cost	total
As at beginning	21470	5012	26482
Added during the month	169798	162400	332198
Cost to be accounted for	191268	167412	358680
Total eqivalent units	83160	79720
Cost per equivalent unit	2.30	2.10	4.40
Cost per equivalent unit = Cost to be accounted for / Total equivalent units

	Cost of ending work in progress
			Conversion cost
	Particulars	Material		Total
	Ending units	8,600	8,600
	Cost per equivalent units	2.30	2.10
	Completion	60%	20%
	Total cost	11868	3612	15480
	Cost of goods transferred		Conversion cost
	Particulars	Material		Total
	Number of units	78000	78000
	Cost per equivalent units	2.30	2.10	4.40
	Total amount	179400	163800	343200

Journal entry

FInished goods inventory debit 343200

Work in progress forming department credit 343200