The Newfoundland Furniture Company produces dining tables in a three stage
The Newfoundland Furniture Company produces dining tables in a three-stage process: sawing, assembly, and staining. Costs incurred in the Sawing Department during September are summarized as follows:
Direct materials (lumber) are added at the beginning of the sawing process, while conversion costs are incurred evenly throughout the process. September activity in the Sawing Department included sawing of 11,000 metres of lumber, which were transferred to the Assembly Department. Also, work began on 1,000 metres of lumber, which on September 30 were 70% of the way through the sawing process.
1. Draw a time line for the Sawing Department similar to Exhibit 5-6.
2. Use the time line to help you compute the number of equivalent units and the cost per equivalent unit in the Sawing Department for September.
3. Show that the sum of (a) cost of goods transferred out of the Sawing Department and (b) ending “Work in Process Inventory—Sawing” equals the total cost accumulated in the department during September.
4. Journalize all transactions affecting the company’s sawing process during September, including those already posted.
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