The Great Southern Furniture Company produces dining tables in a three-stage process: cutting, assembly, and staining. Direct materials (lumber) are added at the beginning of the cutting process, and conversion costs are incurred evenly throughout the process. September 2009 activity in the Cutting Department included cutting 11,000 meters of lumber, which were transferred to the Assembly Department. Also, work began on 1,000 meters of lumber, which on September 30 were \(70 \%\) of the way through the cutting process.

Costs incurred in the Cutting Department during September are summarized as follows:

Requirements 

1. Draw a time line for the Cutting Department.

2. Use the time line to help you compute the number of equivalent units and the cost per equivalent unit in the Cutting Department for September.

3. Show that the sum of

(a) cost of goods transferred out of the Cutting Department and

(b) ending Work in Process Inventory-Cutting equals the total cost accumulated in the department during September.

4. Journalize all transactions affecting the company's cutting process during September, including those already. posted.

Transcribed Image Text:

Work in Process Inventory-Cutting Balance, Sept. 1 0 Direct materials Direct labor 1,860,000 139,100 Manufacturing overhead 165.100