Florida Tile produces ceramic tiles using two sequential production departments: Tile-Forming and Tile-Finishing. The following information was
Question:
Florida Tile produces ceramic tiles using two sequential production departments: Tile-Forming and Tile-Finishing. The following information was found for Florida Tile's first production process, the Tile-Forming Department.
Use the five steps of process costing to calculate the cost that should be assigned to (1) units completed and transferred out and(2) units still in ending work in process inventory. Then prepare the journal entry needed at month-end to transfer the costs associated with the formed tiles to the next department, Tile-Finishing.
Florida Tile | ||
Tile-Forming Department | ||
Month Ended May 31 | ||
Information about units: | ||
Beginning work in process, May 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,000 units | |
Started in production during May. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 18,000 units | |
Completed and transferred to Finishing Department during May. . . . . . . . . . . . . . . . . . . . | 16,000 units | |
Ending work in process, May 31 (25% complete as to direct | ||
materials, 55% complete as to conversion cost). . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,000 units | |
Information about costs: | ||
Beginning work in process, May 1 (consists of $800 of direct materials costs | ||
and $4,000 of conversion costs). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $4,800 | |
Direct materials used in May. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $6,000 | |
Conversion costs incurred in May. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $32,400 |
Begin by summarizing the physical flow of units and computing total equivalent units for direct materials and for conversion costs.
Flow of | Equivalent Units | ||
Physical | Direct | Conversion | |
Flow of Production | Units | Materials | Costs |
Units to account for: | |||
Units accounted for: | |||
Total equivalent units |
Next, summarize total costs to account for.
Florida Tile: Tile-Forming Department | |||||
Costs to Account for | |||||
Month Ended May 31 | |||||
Direct | Conversion | ||||
Materials | Costs | Total | |||
Total costs to account for |
Calculate the cost per equivalent unit. (Enter the cost per equivalent unit to the nearest cent.)
Florida Tile: Tile-Forming Department | |||
Cost per Equivalent Unit | |||
Month Ended May 31 | |||
Direct | Conversion | ||
Materials | Costs | ||
Cost per equivalent unit |
Now we can calculate the total cost of the units completed and transferred out and the total cost of the ending work in process.(Enter quantities first, then the cost per equivalent unit amounts in the same order as calculated in the preceding step. Round the total costs to the nearest whole dollar.)
Florida Tile: Tile-Forming Department | |||||||||
Month Ended May 31 | |||||||||
Assigning Costs | |||||||||
Direct | Conversion | Total | |||||||
Materials | Costs | ||||||||
Completed and transferred out: | |||||||||
Ending work in process: | |||||||||
Total costs accounted for |
Finally, journalize the transfer of costs to the Finishing Department. (Record debits first, then credits. Exclude explanations from any journal entries.)
Journal Entry | ||||
Date | Accounts | Debit | Credit | |
Elementary Statistics A Step By Step Approach
ISBN: 978-1259755330
10th edition
Authors: Allan G. Bluman