ABC Company is a manufacturing company that produces biscuits covered with chocolates. The company has two stages;
Question:
ABC Company is a manufacturing company that produces biscuits covered with chocolates. The company has two stages; manufacturing stage where they add the biscuits at the beginning of the production. Then, they add chocolate when the production is ready by 60%. Second stage is the packaging stage where DM is added at the beginning of the process. The following is data of production and costs for both stages for Jan 2020 period:
Data | Units | Biscuits | Chocolate | CC |
Beginning inventory (70%) | 120,000 | $18,000 | $30,000 | $8,400 |
Added units | 600,000 | $96,000 | $132,000 | 64,620 |
Ending Inventory (35%) | 150,000 |
|
|
|
Data | Units | DM | CC | Transferred C |
Beginning inventory (50%) | 75,000 | $11,250 | $3,000 | $36,000 |
Added units |
| $91,200 | $52,875 |
|
Ending Inventory (60%) | 50,000 |
|
|
|
Required:
- Prepare the stage report for the manufacturing and Packaging stages using, a) WA, and B) FIFO
- Journalize the required entry to transfer the completed units and prepare the ledger of the manufacturing stage and Packaging stage.
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain