Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration

Q26E

Expert-verified
Horngren'S Financial And Managerial Accounting
Found in: Page 1014

Short Answer

Selected production and cost data of Laura’s Caliper Co. follow for May 2018:

Mixing Department

Heating department

Units to account for :

  • Beginning WIP, April 30

25,000

10,000

  • Started in May

90,000

  • Transferred in during May

90,000

Total units to account for

115,000

100,000

Units accounted for:

  • Completed and transferred out during may

90,000

82,000

  • Ending WIP, May 31

25,000

18,000

Total units accounted for

115,000

100,000

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.

1. The equivalent unit of production for direct material for the mixing department is 110,000 units, and the conversion cost is 101,250.

2. The equivalent unit of production for direct materials for the heating department is 92,800 units, and the conversion cost is 88,300 units.

See the step by step solution

Step by Step Solution

Step-by-Step Solution:Step 1: Equivalent Unit of Production

The equivalent unit of production is calculated by multiplying the number of units with the completion percentage. The Equivalent unit of production for direct material is the aggregate of the equivalent unit completed unit and the equivalent units of WIP units.

Step 2: Equivalent unit of production for direct materials for the mixing department

Step 3: Equivalent unit of production for conversion costs for the mixing department

Step 4: Equivalent unit of production for direct materials for the heating department

Step 5: Equivalent unit of production for conversion costs for the heating department

Most popular questions for Business-studies Textbooks

Cheerful Colors manufactures crayons in a three-step process: mixing, molding, and packaging. The Mixing Department combines the direct materials of paraffin wax and pigments. The heated mixture is pumped to the Molding Department, where it is poured into molds. After the molds cool, the crayons are removed from the molds and are transferred to the Packaging Department, where paper wrappers are added and the crayons are boxed.

In the Mixing Department, 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 Department on March 1, 2018, consisted of 800 batches of crayons that were 10% of the way through the production process. The beginning balance in Work-in-Process Inventory—Mixing was $32,800, which consisted of $14,000 in direct materials costs and $18,800 in conversion costs. During March, 5,200 batches were started in production. The Mixing Department transferred 3,000 batches to the Molding Department in March, and 3,000 were still in process on March 31. This ending inventory was 80% of the way through the mixing process. Cheerful Colors uses FIFO process costing.

At March 31, before recording the transfer of costs from the Mixing Department

to the Molding Department, the Cheerful Colors general ledger included the following account:

Work-in-process inventory – Mixing

Balance, March 1

32,800

Direct materials

42,000

Direct labor

24,610

Manufacturing overhead

65,830

Requirements

1. Prepare a production cost report for the Mixing Department for March. Round

equivalent unit of production costs to four decimal places. Round all other costs to the nearest whole dollar.

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

Icon

Want to see more solutions like these?

Sign up for free to discover our expert answers
Get Started - It’s free

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.