Refer to your answers from Exercise E18-19.
In exercise
Gallons
Beginning Work-in-Process Inventory............ 0 gallons
Started in production...................9,500 gallons
Completed and transferred out to Packaging in May........6,000 gallons
Ending Work-in-Process Inventory
(30% of the way through the blending process).........3,500 gallons
Costs
Beginning Work-in-Process Inventory............. $ 0
Costs added during May:
Direct materials...................... 5,700
Direct labor....................... 2,085
Manufacturing overhead allocated.............. 2,004
Total costs added during May.................. $ 9,789
Requirements
1. Prepare the journal entries to record the assignment of direct materials and direct labor and the allocation of manufacturing overhead to the Blending Department. Also, prepare the journal entry to record the costs of the gallons completed and transferred out to the Packaging Department.
2. Post the journal entries to the Work-in-Process Inventory—Blending T-account. What is the ending balance?
3. What is the average cost per gallon transferred out of the Blending Department into the Packaging Department? Why would the company managers want to know this cost?