Question

A)

Entries for Materials Cost Flows in a Process Cost System

The Hershey Company manufactures chocolate confectionery products. The three largest raw materials are cocoa, sugar, and dehydrated milk. These raw materials first go into the Blending Department. The blended product is then sent to the Molding Department, where the bars of candy are formed. The candy is then sent to the Packing Department, where the bars are wrapped and boxed. The boxed candy is then sent to the distribution center, where it is eventually sold to food brokers and retailers.

Show the accounts debited and credited for each of the following business events:

a. Materials used by the Blending Department.

Debit account
Credit account
Credit account
Credit account

b. Transfer of blended product to the Molding Department.

Debit account
Credit account

c. Transfer of chocolate to the Packing Department.

Debit account
Credit account

d. Transfer of boxed chocolate to the distribution center.

Debit account
Credit account

e. Sale of boxed chocolate.

Debit account
Credit account

B)

Equivalent Units of Production

The Converting Department of Soft Touch Towel and Tissue Company had 1,040 units in work in process at the beginning of the period, which were 30% complete. During the period, 21,600 units were completed and transferred to the Packing Department. There were 1,160 units in process at the end of the period, which were 70% complete. Direct materials are placed into the process at the beginning of production.

Determine the number of equivalent units of production with respect to direct materials and conversion costs. If an amount is zero, enter in "0".

Soft Touch Towel and Tissue Company
Number of Equivalent Units of Production
	Whole Units	Direct Materials Equivalent Units	Conversion Equivalent Units
Inventory in process, beginning
Started and completed
Transferred to Packing Department
Inventory in process, ending
Total

C)

Equivalent Units of Production

The following information concerns production in the Baking Department for March. All direct materials are placed in process at the beginning of production.

ACCOUNT Work in Process—Baking Department							ACCOUNT NO.
Date		Item	Debit		Credit		Balance
							Debit		Credit
March	1	Bal., 8,400 units, 2/5 completed					33,600
	31	Direct materials, 151,200 units	302,400				336,000
	31	Direct labor	89,270				425,270
	31	Factory overhead	50,212				475,482
	31	Goods finished, 153,300 units			458,346		17,136
	31	Bal. ? units, 4/5 completed					17,136

a. Determine the number of units in work in process inventory at March 31.
units

b. Determine the equivalent units of production for direct materials and conversion costs in March. If an amount is zero, enter in "0".

Baking Department
Equivalent Units of Production for Direct Materials and Conversion Costs
For March
	Whole Units	Direct Materials Equivalent Units	Conversion Equivalent Units
Inventory in process, March 1
Started and completed in March
Transferred to finished goods in March
Inventory in process, March 31
Total

D)

Costs per Equivalent Unit

The following information concerns production in the Baking Department for March. All direct materials are placed in process at the beginning of production.

ACCOUNT Work in Process—Baking Department							ACCOUNT NO.
Date		Item	Debit		Credit		Balance
							Debit		Credit
Mar.	1	Bal., 6,000 units, 2/5 completed					12,600
	31	Direct materials, 108,000 units	194,400				207,000
	31	Direct labor	55,760				262,760
	31	Factory overhead	31,360				294,120
	31	Goods finished, 109,500 units			284,580		9,540
	31	Bal. ? units, 2/5 completed					9,540

a. Based on the above data, determine each cost listed below. Round "cost per equivalent unit" answers to the nearest cent.

1. Direct materials cost per equivalent unit	$
2. Conversion cost per equivalent unit	$
3. Cost of the beginning work in process completed during March	$
4. Cost of units started and completed during March	$
5. Cost of the ending work in process	$

b. Assuming that the direct materials cost is the same for February and March, did the conversion cost per equivalent unit increase, decrease, or remain the same in March?

Answer 1