Refer to your answers from Exercise E18-21.
1. Prepare the journal entries to record the assignment of direct materials and direct labor and the allocation of manufacturing overhead to the Blending Department. Also, prepare the journal entry to record the costs of the gallons completed and transferred out to the Packaging Department. Assume labor costs are accrued and not yet paid.
2. Post the journal entries to the Work-in-Process Inventory—Blending T-account.
What is the ending balance?
3. What is the average cost per gallon transferred out of the Blending Department
into the Packaging Department? Why would the company managers want to
know this cost?
1. The journal entries to record the assignment of the direct material costing $5,525 and direct labor of $1,500, allocation of manufacturing overhead of $2,547 and the cost of completed and transferred out gallon i.e. $7,930 is done in step 2.
2. The ending balance of the work-in-process inventory account is $1,642
3. The average cost per gallon transferred out of the blending department into the packaging department is $1.22
The management of the company compute this cost to decide the selling price of the product after adding the profit margin.
A costing system is defined as the system used by the companies to determine the cost of goods manufactured during the year. It is classified as the process and job order costing systems.
Finished goods inventory
Finished goods inventory
The manager of Shea Winery want to know this cost for deciding the selling price of the product. Selling price is derived at by adding the profit margin with the total cost of the products.
Selected production and cost data of Laura’s Caliper Co. follow for May 2018:
Units to account for :
Total units to account for
Units accounted for:
Total units accounted for
On May 31, the Mixing Department ending Work-in-Process Inventory was 80%
complete for materials and 45% complete for conversion costs. The Heating Department ending Work-in-Process Inventory was 60% complete for materials and 35% complete for conversion costs. The company uses the weighted-average method. Requirements
1. Compute the equivalent units of production for direct materials and for conversion costs for the Mixing Department.
2. Compute the equivalent units of production for transferred in costs, direct materials, and conversion costs for the Heating Department.
Question: Evergreen Orange manufactures orange juice. Last month’s total manufacturing costs for the Tampa operation included:
What was the conversion cost for Evergreen Orange’s Tampa operation last month?
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