Viva, Inc. manufactures tire tubes in a two-stage process that includes assembly and sealing. The Sealing Department tests the tubes and adds a puncture-resistant coating to each tube to prevent air leaks. The direct materials (coating) are added at the end of the sealing process. Conversion costs are incurred evenly throughout the process. Work in process of the Sealing Department on February 28, 2014, consisted of 700 tubes that were 30% of the way through the production process.

The beginning balance in Work-in-Process Inventory—Sealing was $ 27,890, which consisted of $ 10,440 in transferred in costs and $ 17,450 in conversion costs. During March, 3,600 tubes were transferred in from the Assembly Department. The Sealing Department transferred 3,100 tubes to Finished Goods Inventory in March, and 1,200 were still in process on March 31. This ending inventory was 50% of the way through the sealing process. Viva uses FIFO process costing.

At March 31, before recording the transfer of costs from the Sealing Department to Finished Goods Inventory, the Viva general ledger included the following account:

Requirements
1. Prepare a production cost report for the Sealing Department for March.
2. Journalize all transactions affecting the Sealing Department during March, including the entries that have already beenposted.

Transcribed Image Text:

Work-in-Process Inventory -Sealing Balance, Feb. 28 Transferred in from Assembly Direct materials Direct labor Manufacturing overhead 27,890 36,000 24,800 25,340 33,990