Dayton Aluminum Company uses a process cost system to record the costs of manufacturing rolled aluminum, which requires a series of four processes. The inventory of Work in Process—Rolling on September 1, 2008, and debits to the account during September were as follows:

Bal., 4,000 units, 1/4 completed:

Direct materials (4,000 × $41.00) .. $ 164,000

Conversion (4,000 × 1/4 × $12.30) .... 12,300

$ 176,300

From Smelting Department, 150,000 units . $6,195,000

Direct labor ............... 773,780

Factory overhead ............ 1,138,900

During September, 4,000 units in process on September 1 were completed, and of the 150,000 units entering the department, all were completed except 6,000 units that were 4/5 completed.

Charges to Work in Process—Rolling for October were as follows:

From Smelting Department, 165,000 units . $6,930,000

Direct labor ................ 824,500

Factory overhead ............. 1,242,530

During October, the units in process at the beginning of the month were completed, and of the 165,000 units entering the department, all were completed except 6,800 units that were 2/5 completed.

Instructions

1. Enter the balance as of September 1, 2008, in a four-column account for Work in Process—Rolling. Record the debits and the credits in the account for September. Construct a cost of production report and present computations for determining

(a) Equivalent units of production for materials and conversion,

(b) Equivalent costs per unit,

(c) Cost of goods finished, differentiating between units started in the prior period and units started and finished in September, and

(d) Work in process inventory.

2. Provide the same information for October by recording the October transactions in the four-column work in process account. Construct a cost of production report, and present the October computations (a through d) listed in part (1).

3. Comment on the change in cost per equivalent unit for August through October for direct materials and conversion cost.