Pittsburgh Aluminum Company uses a process cost system to recordthe costs of manufacturing rolled aluminum, which consists of thesmelting and rolling processes. Materials are entered from smeltingat the beginning of the rolling process. The inventory of Work inProcessĆ¢ĀĀRolling on September 1 and debits to the account duringSeptember were as follows:
Bal., 1,000 units, 30% completed:
Direct materials (1,000 x $5) $ 5,000
Conversion (1,000 x 30% x $2.1) 630
$ 5,630
From Smelting Department, 24,000 units $122,400
Direct labor 34,978
Factory overhead 18,834
During September, 1,000 units in process on September 1 werecompleted, and of the 24,000 units entering the department, allwere completed except 2,400 units that were 90% completed. Chargesto Work in ProcessĆ¢ĀĀRolling for October were as follows:
From Smelting Department, 27,600 units $146,280
Direct labor 40,840
Factory overhead 21,996
During October, the units in process at the beginning of themonth were completed, and of the 27,600 units entering thedepartment, all were completed except 1,300 units that were 60%completed.
Required:
1. Enter the balance as of September 1 in a four-column accountfor Work in ProcessĆ¢ĀĀRolling. Record the debits and the credits inthe account for September. Construct a cost of production reportand present computations for determining (a) equivalent units ofproduction for materials and conversion, (b) costs per equivalentunit, (c) cost of goods finished, differentiating between unitsstarted in the prior period and units started and finished inSeptember, and (d) work in process inventory. If an amount box doesnot require an entry, leave it blank.
ACCOUNT
Work in Process-Rolling Department
ACCOUNT NO.
BALANCE
DATE
ITEM
POST. REF.
DEBIT
CREDIT
DEBIT
CREDIT
Sept. 1 Bal., 1,000 units, 30% completed
Sept. 30 Smelting Dept., 24,000 units at $5.1
Sept. 30 Direct labor
Sept. 30 Factory overhead
Sept. 30 Finished goods
Sept. 30 Bal., 2,400 units, 90% completed
If an amount is zero, enter in a zero "0". Round cost per unitanswers to the nearest cent.
Pittsburgh Aluminum Company
Cost of Production Report-Rolling Department
For the Month Ended September 30
Whole Units
Equivalent Units
Units
Direct Materials (a)
Conversion (a)
Units charged to production:
Inventory in process, September 1
Received from Smelting Department
Total units accounted for by the Rolling Department
Units to be assigned costs:
Inventory in process, September 1
Started and completed in September
Transferred to finished goods in September
Inventory in process, September 30
Total units to be assigned costs
Costs
Costs
Direct Materials
Conversion
Total Costs
Cost per equivalent unit:
Total costs for September in Rolling Department $ $
Total equivalent units
Cost per equivalent unit (b) $ $
Costs assigned to production:
Inventory in process, September 1 $
Costs incurred in September
Total costs accounted for by the Rolling Department $
Costs allocated to completed and partially completed units:
Inventory in process, September 1 balance (c) $
To complete inventory in process, September 1 (c) $ $
Cost of completed September 1 work in process $
Started and completed in September (c) $
Transferred to finished goods in September (c) $
Inventory in process, September 30 (d)
Total costs assigned by the Rolling Department $
2. Provide the same information for October by recording theOctober transactions in the four-column work in process account.Construct a cost of production report, and present the Octobercomputations (a through d) listed in part (1). If an amount boxdoes not require an entry, leave it blank.
ACCOUNT
Work in Process-Rolling Department
ACCOUNT NO.
Balance
DATE
ITEM
POST. REF.
DEBIT
CREDIT
DEBIT
CREDIT
October 1 Balance
October 31 Smelting Dept., 27,600 units at $5.3
October 31 Direct labor
October 31 Factory overhead
October 31 Finished goods
October 31 Bal., 1,300 units, 60% completed
If an amount is zero, enter in a zero "0". Round cost per unitanswers to the nearest cent.
Pittsburgh Aluminum Company
Cost of Production Report-Rolling Department
For the Month Ended October 31
Whole Units
Equivalent Units
Units
Direct Materials (a)
Conversion (a)
Units charged to production:
Inventory in process, October 1
Received from Smelting Department
Total units accounted for by the Rolling Department
Units to be assigned costs:
Inventory in process, October 1
Started and completed in October
Transferred to finished goods in October
Inventory in process, October 31
Total units to be assigned costs
Costs
Costs
Direct Materials
Conversion
Total Costs
Cost per equivalent unit:
Total costs for October in Rolling Department $ $
Total equivalent units
Cost per equivalent unit (b) $ $
Costs assigned to production:
Inventory in process, October 1 $
Costs incurred in October
Total costs accounted for by the Rolling Department $
Costs allocated to completed and partially completed units:
Inventory in process, October 1 balance (c) $
To complete inventory in process, October 1 (c) $ $
Cost of completed October 1 work in process $
Started and completed in October (c)
Transferred to finished goods in October (c) $
Inventory in process, October 31 (d)
Total costs assigned by the Rolling Department $
3. The cost per equivalent unit for directmaterials
from August to October. The cost per equivalent unit forconversion costs
from August to October. These changes
be investigated for their underlying causes, and any necessarycorrective actions should be taken.
