Smiths Exteriors produces exterior siding for homes. The Preparation Department begins with wood, which is chopped into

Smith’s Exteriors produces exterior siding for homes. The Preparation Department begins with wood, which is chopped into small bits. At the end of the process, an adhesive is added. Then the wood/adhesive mixture goes on to the Compression Department, where the wood is compressed into sheets. Conversion costs are added evenly throughout the preparation process. January data for the Preparation Department are as follows:

Requirements

1. Prepare a production cost report for the Preparation Department for January.

2. Prepare the journal entry to record the cost of the sheets completed and transferred out to the Compression Department.

3. Post the journal entries to the Work- in- Process Inventory—Preparation T-account. What is the endingbalance?

Transcribed Image Text:

UNITS Beginning Work-in-Process Inventony Started in production Completed and transferred out to Compression in January Ending Work-in-process inventory (30% of the way through the preparation process) COSTS Beginning Work-in-Process Inventony Costs added during March: 0 sheets 3,700 sheets 2,000 sheets 1,700 sheets Wood Adhesives Direct labor Manufacturing overhead 3,108 1240 558 1,450 6,356 Total costs