GroFast Company manufactures a high-quality fertilizer, which isused primarily by commercial veg-etable growers. Two departmentsare involved in the production process. In the Mixing Department,various chemicals are entered into production. After processing,the Mixing Department transfers a chemical called Chemgro to theFinishing Department. There the product is completed, packaged, andshipped under the brand name Vegegro.
Various chemicals----->MixingDept.----->Chemgro----->FinishingDept.----->Vegegro----->
In the Mixing Department, the raw material is added at thebeginning of the process. Labor and overhead are appliedcontinuously throughout the process. All direct departmentaloverhead is traced to the departments, and plant overhead isallocated to the departments on the basis of direct-labor. Theplant overhead rate for 20x2 is $.40 per direct-labor dollar.
The following information relates to production during November20x2 in the Mixing Department.
a. Work in process, November 1 (4,000 pounds, 75 percentcomplete as to conversion):
Raw material.............................................................................................................................................................$22,800
Direct labor at $5.00 per hour.................................................................................................................................24,650
Departmental overhead...........................................................................................................................................12,000
Allocated plant overhead.........................................................................................................................................9,860
b. Raw material:
Inventory, November 1, 2,000 pounds................................................................................................................$10,000
Purchases, November 3, 10,000 pounds............................................................................................................51,000
Purchases, November 18, 10,000 pounds..........................................................................................................51,500
Released to production during November, 16,000 pounds
c. Direct-labor cost, $103,350
d. Direct departmental overhead costs, $52,000
e. Transferred to Finishing Department, 15,000 pounds
f. Work in process, November 30, 5,000 pounds, 20 percentcomplete
The company uses weighted-average process costing to accumulateproduct costs. However, for raw-material inventories, the firm usesthe FIFO (i.e., first in, first out) inventory method.
Required: 1. Prepare a production report for the MixingDepartment for November 20x2. The report should show:
a. Equivalent units of production by cost factor (i.e., directmaterial and conversion).
b. Cost per equivalent unit for each cost factor. (Round youranswers to the nearest cent.)
c. Cost of Chemgro transferred to the Finishing Department.
d. Cost of the work-in-process inventory on November 30, 20x2,in the Mixing Department.
2. Prepare journal entries to record the following events:
a. Release of direct material to production during November.
b. Incurrence of direct-labor costs in November.
c. Application of overhead costs for the Mixing Department(direct departmental and allocated plant overhead costs.)
d. Transfer of Chemgro out of the Mixing Department.
GroFast Company manufactures a high-quality fertilizer, which isused primarily by commercial veg-etable growers. Two departmentsare involved in the production process. In the Mixing Department,various chemicals are entered into production. After processing,the Mixing Department transfers a chemical called Chemgro to theFinishing Department. There the product is completed, packaged, andshipped under the brand name Vegegro.
Various chemicals----->MixingDept.----->Chemgro----->FinishingDept.----->Vegegro----->
In the Mixing Department, the raw material is added at thebeginning of the process. Labor and overhead are appliedcontinuously throughout the process. All direct departmentaloverhead is traced to the departments, and plant overhead isallocated to the departments on the basis of direct-labor. Theplant overhead rate for 20x2 is $.40 per direct-labor dollar.
The following information relates to production during November20x2 in the Mixing Department.
a. Work in process, November 1 (4,000 pounds, 75 percentcomplete as to conversion):
Raw material.............................................................................................................................................................$22,800
Direct labor at $5.00 per hour.................................................................................................................................24,650
Departmental overhead...........................................................................................................................................12,000
Allocated plant overhead.........................................................................................................................................9,860
b. Raw material:
Inventory, November 1, 2,000 pounds................................................................................................................$10,000
Purchases, November 3, 10,000 pounds............................................................................................................51,000
Purchases, November 18, 10,000 pounds..........................................................................................................51,500
Released to production during November, 16,000 pounds
c. Direct-labor cost, $103,350
d. Direct departmental overhead costs, $52,000
e. Transferred to Finishing Department, 15,000 pounds
f. Work in process, November 30, 5,000 pounds, 20 percentcomplete
The company uses weighted-average process costing to accumulateproduct costs. However, for raw-material inventories, the firm usesthe FIFO (i.e., first in, first out) inventory method.
Required: 1. Prepare a production report for the MixingDepartment for November 20x2. The report should show:
a. Equivalent units of production by cost factor (i.e., directmaterial and conversion).
b. Cost per equivalent unit for each cost factor. (Round youranswers to the nearest cent.)
c. Cost of Chemgro transferred to the Finishing Department.
d. Cost of the work-in-process inventory on November 30, 20x2,in the Mixing Department.
2. Prepare journal entries to record the following events:
a. Release of direct material to production during November.
b. Incurrence of direct-labor costs in November.
c. Application of overhead costs for the Mixing Department(direct departmental and allocated plant overhead costs.)
d. Transfer of Chemgro out of the Mixing Department.
