PLEASE ANSWER #2 ONLY Process Job Costing and Equivalent Units of Production
Bay Manufacturing produces paint. The company has two processes: mixing and packaging.
The ingredients for the paint are mixed in large batches and then transferred to the packaging
department, where one-gallon cans are filled, capped, labeled, and boxed.
There was no work in process on February 1. The materials are all brought to the packaging job up front
and charged to the job. Nothing is transferred to finished goods until the entire job is complete. The
materials costs include the packaging, material, and the cost transferred from the mixing department.
On February 2, 15,000 gallons (job 2-1) were transferred into the packaging department from the
mixing department and completed on February 19.
The costs incurred to complete job 2-1 in the packaging department are as follows:
Materials	56,250
Labor	11,250
Overhead (applied based on direct labor hours)	7,500
On February 20, another 20,000 gallons (job 2-2) were transferred into the packaging department.
Job 2-2 was 50% complete as to labor at the end of the month.
The costs incurred (unit cost unchanged from job 2-1) to complete job 2-2 in the packaging
department are as follows:
Materials	75,000
Labor	15,000
Overhead (applied based on direct labor hours)	10,000
INSTRUCTIONS:
1. Compute the physical units of production.
2. Compute the cost per unit to complete packaging for labor, materials, overhead, and total.
3. Compute equivalent units and cost of work in process as of the end of February.
4. Record journal entries for:
a. the movement of materials from materials inventory to each job
b. the allocation of payroll to each job
c. the application of overhead to each job
d. the movement of work in process to finished goods
1)
Packaging department	Physical units
On February 2, (job 2-1) were transferred into the packaging department	15,000 gallons
On February 20, (job 2-2) were transferred into the packaging department	10,000 gallons
On February 20, (job 2-2) were transferred into the packaging department, work in progress (50% pending)	10,000 gallons
Total physical units	35,000 gallons
Physical units are the actual units to be accounted for during a period, irrespective of any work performed. Add the units started into production during the period to the units in process at the beginning of the period. This amount is referred to as the total units to be accounted for.
These units are then accounted for by the output of the period, which consists of units transferred out during the period, and any units in process at the end of the period. This amount is referred to as the total units accounted for.
2)
3)
		Material	Labour	Overhead
(job 2-1) 100% completed and transferred	15,000	15,000	15,000	15,000
(job 2-2) 100% transferred	10,000	10,000	10,000	10,000
(job 2-2) 50% transferred	50,000	50,000	5,000	50,000
Total equivalent units of production	30,000	30,000	30,000	30,000
cost per unit = total cost / units of material
= 56,250 + 11,250 + 7,500 / 15,000 = 5 per unit for job (2-1)
= 75,000 + 15,000+ 10,000 / 15,000 = 6.67 per unit for job (2-2)
cost per unit of material for job2-1 = 56,250 / 15,000 = 3.75 per unit
cost per unit of labour for job2-1 = 11,250 / 15,000 = 0.75 per unit
cost per unit of overhead for job2-1 = 7,500 / 15,000 = 0.5 per unit
cost per unit of material for job2-2 = 75,000 / 15,000 = 5 per unit
cost per unit of labour for job2-2 = 15,000 / 15,000 = 1 per unit
cost per unit of overhead for job2-2 = 10,000 / 15,000 = 0.67 per unit
4)
Journal Entry	Debit	Credit
A. The movement of materials from materials inventory to each job. The cost of the goods transferred from one processing department to the next. Work in Process - Packing, Work in Process - Mixing (To record transfer of units to Packing Department.	56,250	56,250
B. The allocation of payroll to each job. Work in Process - Mixing, Work in Process - Packing Factory Labor (To assign factory labor to production = 11,250 + 15,000	11,250 15,000	26,250
C. The application of overhead to each job Work in process - Mixing, Work in process - Packing, manufacturing Overhead (To assign overhead to production)	7,500 10,000	17,500
D. The movement of work in process to finished goods Finished Goods	131,250	131,250