Brian Canning Co., which sells canned corn, uses an operation costing system. Cans of corn are...

Brian Canning Co., which sells canned corn, uses an operation costing system. Cans of corn are classified as either sweet or regular, depending on the type of corn used. Both types of corn go through the separating and cleaning operations, but only regular corn goes through the creaming operation. During January, two batches of corn were canned from start to finish. Batch X consisted of 1,800 pounds of sweet corn, and Batch Y consisted of 1,700 pounds of regular corn. The company had no beginning or ending Work-in-Process Inventory. The following cost information is for the month of January: Batch Cost Batch Size Raw sweet corn X $ 12,600 1,800 lbs Raw regular corn Y 6,885 * 1,700 lbs Separating department costs 5,075 Cleaning department costs 3,500 Creaming department costs 1,530 *Includes $2,300 for cream. Required: 1. Compute the unit cost for sweet corn and regular corn. 2. Record appropriate journal entries.

Expert Solution

Part A

Raw sweet corn = $ 12,600/1800 lbs = $7

Raw regular corn= $6,885 / 1,700 lbs = $4.05

Total pounds for separating and cleaning departments = 1800+1700 = 3500 lbs

Total pounds for creaming department = 1700 lbs

Separating department= 5075/3500 = $1.45

Cleaning department = 3500/3500 = $1

Creaming department = 1530/1700 = $0.90

Total product cost per pound

Sweet corn = $7+$1.45+$1 = $9.45 per pound

Regular corn = $4.05+$1.45+$1+$0.90 = $7.40 per pound

Part B

Transaction	General Journal	Debit	Credit
A	WIP Inventory: Separation Department	17185
	Direct Materials Inventory (12600+6885-2300)		17185
	(To record the requisition of the raw corn for both types less the cream cost)
B.	WIP Inventory: Separation Department	5075
	Conversion Costs Applied		5075
	(To record the application of conversion costs to the Separation Department)
C.	WIP Inventory: Cleaning Department	22260
	WIP Inventory: Separation Department (17185+5075)		22260
	(To record the transfer both types of corn to the Cleaning Department)
D.	WIP Inventory: Cleaning Department	3500
	Conversion Costs Applied		3500
	(To record the application of conversion cost to the Cleaning Department)
E.	WIP Inventory: Creaming Department (6885-2300+(1.451700)+(11700))	8750
	Finished Goods Inventory (12600+(1.451800)+(11800))	17010
	WIP Inventory: Cleaning Department (22260+3500)		25760
	(To record the transfer the Regular Corn to the Creaming Department and the Sweet Corn to Finished Goods Inventory)
F.	WIP Inventory: Creaming Department	3830
	Direct Materials Inventory		2300
	Conversion Costs Applied		1530
	(To record the transfer cream costs and conversion cost to the Creaming Department)

ekkarill92 answered 1 year ago

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