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.
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.
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.
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
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.
Refreshing Water Company produces premium bottled water. In the second department, the Bottling Department, conversion costs are incurred evenly throughout the bottling process, but packaging materials are not added until the end of the process. Costs in beginning Work-in-Process Inventory include transferred in costs of $1,400, direct labor of $700, and manufacturing overhead of $330. March data for the Bottling Department follow:
REFRESHING WATER COMPANY
WORK-IN-PROCESS INVENTORY – BOTTLINGMonth ended March 31,2018
Beginning inventory, Mar. 1 (40% complete)
Ending inventory, Mar 31 (70% completed)
1. Prepare a production cost report for the Bottling Department for the month of
March. The company uses the weighted-average method.
2. Prepare the journal entry to record the cost of units completed and transferred out.
3. Post all transactions to the Work-in-Process Inventory—Bottling T-account. What is the ending balance?
Color Explosion prepares and packages paint products. Color Explosion has two departments: Blending and Packaging. Direct materials are added at the beginning of the blending process (dyes) and at the end of the packaging process (cans). Conversion costs are added evenly throughout each process. The company uses the weighted- average method. Data from the month of May for the Blending Department are as follows:
Beginning work-in-process inventory
Started in production
Completed and transferred out to packaging in may
Ending work-in-process inventory (30% of the way through the blending process)
Beginning work-in-process inventory
Costs added during May:
Total costs added during May
1. Compute the Blending Department’s equivalent units of production for direct
materials and for conversion costs.
2. Compute the total costs of the units (gallons)
a. completed and transferred out to the Packaging Department.
b. in the Blending Department ending Work-in-Process Inventory.
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