Cost Flows Lamont Company produced 80,000 machine parts for diesel engines. There were no beginning or...
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Cost Flows Lamont Company produced 80,000 machine parts for diesel engines. There were no beginning or ending work-in-process inventories in any department. Lamont incurred the following costs for May: Direct materials Direct labor Applied overhead Required: Molding Department $12,000 Grinding Finishing Department Department $5,300 10,000 8,800 $8,000 12,000 17,000 15,000 11,000 1. Calculate the costs transferred out of each department. Molding Grinding Finishing Costs Transferred Out 39,000 69,800 X $ 112,800 X Feedback Check My Work In process costing, each process (department) accumulates its costs in a WIP account and they are listed like job costs except it has transferred in costs (if any) and transferred out costs unless they are in the Finishing Department. 2. Prepare the journal entries corresponding to these transfers. Also, prepare the journal entry for Grinding that reflects the costs added to the transferred-in goods received from Molding. For a compound transaction, if an amount box does not require an entry, leave it blank. Transfer entries: Work in Process-Grinding Work in Process-Molding 39,000 39,000 Work in Process-Finishing 69,800 X Work in Process-Grinding 69,800 X Finished Goods 112,800 X Work in Process-Finishing 112,800 X Cost-added entry (Grinding only): Work in Process-Grinding Feedback Materials Payroll Overhead Control 29,100 5,300 8,800 15,000 Check My Work As the work is finished in a process, the partially completed units and all their associated costs are transferred to the next process by debiting the WIP account of the process receiving the unit and crediting the WIP account of the transferring department. The second JE is for the Grinding Department only. 3. What if the Grinding Department had an ending WIP of $12,000? Calculate the cost transferred out. $ 57,800 X Feedback Check My Work Calculate the difference of the cost transferred out and make a journal entry according to the above instructions. Explain what the effect is on Finished Goods. Provide the journal entry that would reflect this transfer. Work in Process-Finishing Work in Process-Grinding Feedback 57,800 X 57,800 X Check My Work Calculate the difference of the cost transferred out and make a journal entry according to the above instructions. Explain what the effect is on Finished Goods. What is the effect on finished goods calculated in Requirement 1, assuming the other two departments have no ending WIP? Decreased by $ 12,000 Feedback Check My Work Calculate the effect of the cost that was transferred out on Finished Goods. Production Report Tomar Company produces vitamin energy drinks. The Mixing Department, the first process department, mixes the ingredients required for the drinks. The following data are for April: Work in process, April 1 Quarts started 90,000 Quarts transferred out 75,000 Quarts in EWIP 15,000 Direct materials cost $66,000 Direct labor cost $167,000 $334,000 Overhead applied Direct materials are added throughout the process. Ending inventory is 40 percent complete with respect to direct labor and overhead. Required: Prepare a production report for the Mixing Department for April. If an answer is zero, enter "0". Tomar Company Mixing Department Production Report for April Unit Information Units to account for: Total units to account for Units accounted for: Physical Flow Equivalent Units Total units accounted for Work completed Cost Information Costs to account for: Total costs to account for Cost per equivalent unit Costs accounted for: Total costs accounted for Production Report, No Beginning Inventory Softkin Company manufactures sun protection lotion. The Mixing Department, the first process department, mixes the chemicals required for the repellant. The following data are for the current year: Work in process, January 1 Gallons started 450,000 Gallons transferred out 378,000 Direct materials cost $900,000 $2,125,440 $3,188,160 Direct labor cost Overhead applied Direct materials are added at the beginning of the process. Ending inventory is 90 percent complete with respect to direct labor and overhead. Required: Prepare a production report for the Mixing Department for the current year. If an amount is zero, enter "0". Units to account for: Total units to account for Softkin Company Mixing Department Production Report for Current Year Unit Information Units accounted for: Equivalent Units Physical Flow Direct Materials Conversion Costs Total units accounted for Work completed Cost Information Costs to account for: Direct Materials Conversion Costs Total Total costs to account for Cost per equivalent unit Costs accounted for: Total costs accounted for Weighted Average Method, Single Department Analysis, Uniform Costs Hatch Company produces a product that passes through three processes: Fabrication, Assembly, and Finishing. All manufacturing costs are added uniformly for all processes. The following information was obtained for the Fabrication Department for June: a. Work in process, June 1, had 90,000 units (40 percent completed) and the following costs: Direct materials Direct labor Overhead $68,400 107,000 35,000 b. During the month of June, 180,000 units were completed and transferred to the Assembly Department, and the following costs were added to production: Direct materials Direct labor Overhead $215,000 144,000 165,000 c. On June 30, there were 45,000 partially completed units in process. These units were 80 percent complete. Required: Prepare a cost of production report for the Fabrication Department for June using the weighted average method of costing. The report should disclose the physical flow of units, equivalent units, and unit costs and should track the disposition of manufacturing costs. Round the cost per equivalent unit to the nearest cent. Hatch Company Fabrication Department Production Report for June Unit Information Units to account for: Units to account for Units accounted for: Physical Flow Equivalent Units Total units accounted for Cost Information Costs to account for: Manufacturing Costs Total costs to account for Cost per equivalent unit Costs accounted for: Units completed Units, ending work in process Total costs accounted for $ Unit Information with BWIP, FIFO Method Jackson Products produces a barbeque sauce using three departments: Cooking, Mixing, and Bottling. In the Cooking Department, all materials are added at the beginning of the process. Output is measured in ounces. The production data for July are as follows: Production: Units in process, July 1, 60% complete* 10,100 Units completed and transferred out 84,000 Units in process, July 31, 80% complete* 15,700 * With respect to conversion costs. Required: 1. Prepare a physical flow schedule for July. Jackson Products Physical Flow Schedule For the Month of July Units to account for: Total units to account for Units accounted for: Units completed and transferred out: Total units accounted for 2. Prepare an equivalent units schedule for July using the FIFO method. Enter percentages as whole numbers. If an amount box does not require an entry, enter "0". Jackson Products Equivalent Units Schedule Add: Units in beginning work in process Percentage to complete: % % Add: Units in ending work in process Percentage complete: X % X % Direct Materials Conversion Costs 3. What if 60 percent of the materials were added at the beginning of the process and 40 percent were added at the end of the process (all ingredients used are treated as the same type or category of materials)? How many equivalent units of materials would there be? equivalent units Unit Information with BWIP, Weighted Average Method Jackson Products produces a barbeque sauce using three departments: Cooking, Mixing, and Bottling. In the Cooking Department, all materials are added at the beginning of the process. Output is measured in ounces. The production data for July are as follows: Production: Units in process, July 1, 60% complete* Units completed and transferred out 10,000 88,000 Units in process, July 31, 90% complete* 15,100 * With respect to conversion costs. Required: 1. Prepare a physical flow schedule for July. Jackson Products Physical Flow Schedule For the Month of July Units to account for: Total units to account for Units accounted for: Units completed and transferred out: Total units accounted for 2. Prepare an equivalent units schedule for July using the weighted average method. Enter percentages as whole numbers. Jackson Products Equivalent Units Schedule Units completed Add: Units in ending work in process Percentage complete: X X % % Equivalent units of output Direct Materials Conversion Costs 3. What if you were asked to calculate the FIFO units beginning with the weighted average equivalent units? Calculate the weighted average equivalent units by subtracting out the prior-period output found in BWIP. Direct Materials Conversion Costs FIFO Equivalent Units Cost Flows Lamont Company produced 80,000 machine parts for diesel engines. There were no beginning or ending work-in-process inventories in any department. Lamont incurred the following costs for May: Direct materials Direct labor Applied overhead Required: Molding Department $12,000 Grinding Finishing Department Department $5,300 10,000 8,800 $8,000 12,000 17,000 15,000 11,000 1. Calculate the costs transferred out of each department. Molding Grinding Finishing Costs Transferred Out 39,000 69,800 X $ 112,800 X Feedback Check My Work In process costing, each process (department) accumulates its costs in a WIP account and they are listed like job costs except it has transferred in costs (if any) and transferred out costs unless they are in the Finishing Department. 2. Prepare the journal entries corresponding to these transfers. Also, prepare the journal entry for Grinding that reflects the costs added to the transferred-in goods received from Molding. For a compound transaction, if an amount box does not require an entry, leave it blank. Transfer entries: Work in Process-Grinding Work in Process-Molding 39,000 39,000 Work in Process-Finishing 69,800 X Work in Process-Grinding 69,800 X Finished Goods 112,800 X Work in Process-Finishing 112,800 X Cost-added entry (Grinding only): Work in Process-Grinding Feedback Materials Payroll Overhead Control 29,100 5,300 8,800 15,000 Check My Work As the work is finished in a process, the partially completed units and all their associated costs are transferred to the next process by debiting the WIP account of the process receiving the unit and crediting the WIP account of the transferring department. The second JE is for the Grinding Department only. 3. What if the Grinding Department had an ending WIP of $12,000? Calculate the cost transferred out. $ 57,800 X Feedback Check My Work Calculate the difference of the cost transferred out and make a journal entry according to the above instructions. Explain what the effect is on Finished Goods. Provide the journal entry that would reflect this transfer. Work in Process-Finishing Work in Process-Grinding Feedback 57,800 X 57,800 X Check My Work Calculate the difference of the cost transferred out and make a journal entry according to the above instructions. Explain what the effect is on Finished Goods. What is the effect on finished goods calculated in Requirement 1, assuming the other two departments have no ending WIP? Decreased by $ 12,000 Feedback Check My Work Calculate the effect of the cost that was transferred out on Finished Goods. Production Report Tomar Company produces vitamin energy drinks. The Mixing Department, the first process department, mixes the ingredients required for the drinks. The following data are for April: Work in process, April 1 Quarts started 90,000 Quarts transferred out 75,000 Quarts in EWIP 15,000 Direct materials cost $66,000 Direct labor cost $167,000 $334,000 Overhead applied Direct materials are added throughout the process. Ending inventory is 40 percent complete with respect to direct labor and overhead. Required: Prepare a production report for the Mixing Department for April. If an answer is zero, enter "0". Tomar Company Mixing Department Production Report for April Unit Information Units to account for: Total units to account for Units accounted for: Physical Flow Equivalent Units Total units accounted for Work completed Cost Information Costs to account for: Total costs to account for Cost per equivalent unit Costs accounted for: Total costs accounted for Production Report, No Beginning Inventory Softkin Company manufactures sun protection lotion. The Mixing Department, the first process department, mixes the chemicals required for the repellant. The following data are for the current year: Work in process, January 1 Gallons started 450,000 Gallons transferred out 378,000 Direct materials cost $900,000 $2,125,440 $3,188,160 Direct labor cost Overhead applied Direct materials are added at the beginning of the process. Ending inventory is 90 percent complete with respect to direct labor and overhead. Required: Prepare a production report for the Mixing Department for the current year. If an amount is zero, enter "0". Units to account for: Total units to account for Softkin Company Mixing Department Production Report for Current Year Unit Information Units accounted for: Equivalent Units Physical Flow Direct Materials Conversion Costs Total units accounted for Work completed Cost Information Costs to account for: Direct Materials Conversion Costs Total Total costs to account for Cost per equivalent unit Costs accounted for: Total costs accounted for Weighted Average Method, Single Department Analysis, Uniform Costs Hatch Company produces a product that passes through three processes: Fabrication, Assembly, and Finishing. All manufacturing costs are added uniformly for all processes. The following information was obtained for the Fabrication Department for June: a. Work in process, June 1, had 90,000 units (40 percent completed) and the following costs: Direct materials Direct labor Overhead $68,400 107,000 35,000 b. During the month of June, 180,000 units were completed and transferred to the Assembly Department, and the following costs were added to production: Direct materials Direct labor Overhead $215,000 144,000 165,000 c. On June 30, there were 45,000 partially completed units in process. These units were 80 percent complete. Required: Prepare a cost of production report for the Fabrication Department for June using the weighted average method of costing. The report should disclose the physical flow of units, equivalent units, and unit costs and should track the disposition of manufacturing costs. Round the cost per equivalent unit to the nearest cent. Hatch Company Fabrication Department Production Report for June Unit Information Units to account for: Units to account for Units accounted for: Physical Flow Equivalent Units Total units accounted for Cost Information Costs to account for: Manufacturing Costs Total costs to account for Cost per equivalent unit Costs accounted for: Units completed Units, ending work in process Total costs accounted for $ Unit Information with BWIP, FIFO Method Jackson Products produces a barbeque sauce using three departments: Cooking, Mixing, and Bottling. In the Cooking Department, all materials are added at the beginning of the process. Output is measured in ounces. The production data for July are as follows: Production: Units in process, July 1, 60% complete* 10,100 Units completed and transferred out 84,000 Units in process, July 31, 80% complete* 15,700 * With respect to conversion costs. Required: 1. Prepare a physical flow schedule for July. Jackson Products Physical Flow Schedule For the Month of July Units to account for: Total units to account for Units accounted for: Units completed and transferred out: Total units accounted for 2. Prepare an equivalent units schedule for July using the FIFO method. Enter percentages as whole numbers. If an amount box does not require an entry, enter "0". Jackson Products Equivalent Units Schedule Add: Units in beginning work in process Percentage to complete: % % Add: Units in ending work in process Percentage complete: X % X % Direct Materials Conversion Costs 3. What if 60 percent of the materials were added at the beginning of the process and 40 percent were added at the end of the process (all ingredients used are treated as the same type or category of materials)? How many equivalent units of materials would there be? equivalent units Unit Information with BWIP, Weighted Average Method Jackson Products produces a barbeque sauce using three departments: Cooking, Mixing, and Bottling. In the Cooking Department, all materials are added at the beginning of the process. Output is measured in ounces. The production data for July are as follows: Production: Units in process, July 1, 60% complete* Units completed and transferred out 10,000 88,000 Units in process, July 31, 90% complete* 15,100 * With respect to conversion costs. Required: 1. Prepare a physical flow schedule for July. Jackson Products Physical Flow Schedule For the Month of July Units to account for: Total units to account for Units accounted for: Units completed and transferred out: Total units accounted for 2. Prepare an equivalent units schedule for July using the weighted average method. Enter percentages as whole numbers. Jackson Products Equivalent Units Schedule Units completed Add: Units in ending work in process Percentage complete: X X % % Equivalent units of output Direct Materials Conversion Costs 3. What if you were asked to calculate the FIFO units beginning with the weighted average equivalent units? Calculate the weighted average equivalent units by subtracting out the prior-period output found in BWIP. Direct Materials Conversion Costs FIFO Equivalent Units
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Related Book For
Cornerstones of Cost Management
ISBN: 978-1285751788
3rd edition
Authors: Don R. Hansen, Maryanne M. Mowen
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