ACCT 3403 Lecture Notes - Lecture 21: Multiple Choice
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Equivalent units of production (EUP) weighted averagemethod | |||||
Units | % Materials | EUP â Materials | % Conversion | EUP Conversion | |
(Beg. goods in process inventory - units / total unitsaccounted for / total units to accounted for / units completed& transferred out / units started this period) - Select 1 | |||||
(Beg. goods in process inventory - units / total unitsaccounted for / total units to accounted for / units completed& transferred out / units started this period) - Select 1 | |||||
Total units | |||||
Cost per equivalent unit of production | Materials | Conversion | |||
(Costs transferred out / costs incurred this period / costs ofending work in process / cost of beg. work in process) - Select1 | |||||
(Costs transferred out / costs incurred this period / costs ofending work in process / cost of beg. work in process) - Select1 | |||||
Totalcosts | Costs | Costs | |||
Divide Equivalent units production | EUP | EUP | |||
Cost per equivalent unit of production | Materials | Conversion | |||
Totalcosts | Costs | Costs | |||
DivideEquivalent units of Production | EUP | EUP | |||
Costper equivalent unit of production | |||||
Total costs accounted for: | |||||
Cosof units transferred out: | EUP | Cost per EUP | Total cost | ||
Directmaterials | |||||
Conversion | |||||
Totalcosts transferred out |
Costs of endingWIP EUP Cost perEUP Total Cost
Directmaterials _____ $______ ______
Conversion ______ $_______ _______
Total cost of ending WIP
Total costs accounted for
Total costs to account for: | |||||
(Cost transferred out/costs incurred this period/cost ofending work in process/ cost of beg. work in process) - Select1 | |||||
(Cost transferred out/costs incured this period/cost ofending work in process/ cost of beg. work in process) - Selecet1 | |||||
Total costs accounted for: | |||||
Total costs accounted for: | |||||
Difference due to rounding costs/unit: | |||||
Unit reconciliation: | |||||
(Beg. work in pricess inventory - units / ending work inprocess units / units completed & trasnferred out / unitsstarted this period) | |||||
(Beg. work in pricess inventory - units / ending work inprocess units / units completed & trasnferred out / unitsstarted this period) | |||||
(extra row - ignore) | |||||
Total units to acount for: | |||||
Total units accounted for: | |||||
Units completed & transferred out | |||||
Ending Work in process - units | |||||
Total units accounted for: |
Tamar Co. manufactures a single product in one department. Alldirect materials are added at the beginning of the manufacturingprocess. Conversion costs are added evenly throughout the process.During May, the company completed and transferred 25,200 units ofproduct to finished goods inventory. Its 3,600 units of beginningwork in process consisted of $20,400 of direct materials and$248,940 of conversion costs. It has 2,700 units (100% completewith respect to direct materials and 80% complete with respect toconversion) in process at month-end. During the month, $677,100 ofdirect material costs and $2,350,260 of conversion costs werecharged to production.
1. Prepare the company's process cost summary for May usig theweighted- average method. (Charts before question)
2~
Prepare the journal entry dated May31 to transfer the cost of completed units to finished goodsinventory. (Do not roundintermediate calculations. Round your final answer to the nearestwhole dollar.)
JournalEntry Worksheet
- Record the transfer of goods tofinished goods inventory.
Hello, someone posted the answers (below) to my question. ButI'd like someone to explain how they arrived at each of the numbersin the journal entries so I can learn how to figure it out on myown later. Thanks in advance for your help.
Problem 4-16 Cost Flows [LO1]
Natureâs Way, Inc., keeps one of its production facilities busymaking a perfume called Essence de la Vache. The perfume goesthrough two processing departments: Blending and Bottling. |
The following incompleteWork in Process account is provided for the Blending Department forMarch: |
Work in ProcessâBlending |
March 1 balance | 33,500 | Completed and transferred to Bottling (760,000ounces) | ? | |
Materials | 138,600 | |||
Direct labor | 63,200 | |||
Overhead | 477,000 | |||
March 31 balance | ? | |||
The $33,500 beginning inventory inthe Blending Department consisted of the following elements:materials, $8,100; direct labor, $3,600; and overhead applied,$21,800. |
Costs incurred during March in theBottling Department were: materials used, $45,000; direct labor,$16,800; and overhead cost applied to production, $106,000. |
Required: |
1. | Prepare journal entries to record the costs incurred in both theBlending Department and Bottling Department during March.(Omit the "$" sign in your response.) |
a. | Raw materialswere issued for use in production. |
b. | Direct laborcosts were incurred. |
c. | Manufacturing overhead costs for the entire factory wereincurred, $626,000. (Credit Accounts Payable and use a singleManufacturing Overhead control account for the entire factory.) |
d. | Manufacturingoverhead was applied to production using a predetermined overheadrate. |
e. | Units that were complete with respect to processing in theBlending Department were transferred to the Bottling Department,$642,000. |
f. | Units that were complete with respect to processing in theBottling Department were transferred to Finished Goods,$710,000. |
g. | Completed unitswere sold on account for $1,450,000. The cost of goods sold was$600,000. |
Expert Answer
Debit | Credit | ||
a) | Work in process (Bottling) | $ 45,000 | |
Work in process (Blending) | $ 138,600 | ||
Raw materials | $ 183,600 | ||
Raw materials used for production | |||
b) | Work in process (Bottling) | $ 16,800 | |
Work in process (Blending) | $ 63,200 | ||
Salaries payable | $ 80,000 | ||
Direct labor cost incurred on production | |||
c) | Manufacturing overheads | $ 626,000 | |
Accounts payable | $ 626,000 | ||
Incurred Manufacturing overhead costs forthe entire factory for $626,000 | |||
d) | Work in process (Bottling) | $ 106,000 | |
Work in process (Blending) | $ 477,000 | ||
Manufacturing Overheads | $ 583,000 | ||
Manufacturing overhead applied to production | |||
e) | Work in process - Bottling | $ 642,000 | |
Work in process - (Blending) | $ 642,000 | ||
Units transferred to Bottling | |||
f) | Finshed goods | $ 710,000 | |
Work in process - Bottling | $ 710,000 | ||
Units transferred to finished goods | |||
g) | Accounts receivable | $1,450,000 | |
Sales | $1,450,000 | ||
Goods sold on account | |||
Cost of goods sold | $ 600,000 | ||
Finished Goods | $ 600,000 | ||
Cost of goods sold worth $600,000 |