ACCT-241 Chapter Notes - Chapter 4: Finished Good

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fuchsiacamel933

17 Jan 2016

School

American University

Department

Accounting And Taxation

Course

ACCT-241

Professor

harr

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Document Summary

Used when a company produces a continuous flow of units indistinguishable from one another. Materials, labor and overhead aren"t identified with particular orders. Costs assigned uniformly to all units passing through the department. Organizational unit where work is performed on a product. Materials, labor and overhead are added to the product. Each department has a work in process t-account. Completed production from each department is transferred to the work in. Any department can have materials, labor and overhead costs added to it. Work in process account = those costs added + transferred-in costs from the partially finished units from before. Drawn from storage using a materials requisition form. Applied according to the amount of the allocation base incurred in the department. Transfer work from one department to the next. Debit work in process (department 2); credit work in process (department. Debit finished goods; credit work in process (department 2) Debit cost of goods sold; credit finished goods.

Related Questions

Kansas Supplies is a manufacturer of plastic parts that uses the weighted-average process costing method to account for costs of production. It produces parts in three separate departments: Molding, Assembling, and Packaging. The following information was obtained for the Assembling Department for the month of April.

Work in process on April 1 had 75,000 units made up of the following:

	Amount		Degree of Completion
Prior department costs transferred in from the Molding Department	$	192,000		100	%
Costs added by the Assembling Department
Direct materials	$	120,000		100	%
Direct labor		43,200		60	%
Manufacturing overhead		27,600		50	%
	$	190,800
Work in process, April 1	$	382,800

During April, 375,000 units were transferred in from the Molding Department at a cost of $960,000. The Assembling Department added the following costs:


Direct materials	$	576,000
Direct labor		216,000
Manufacturing overhead		113,400
Total costs added	$	905,400

Assembling finished 300,000 units and transferred them to the Packaging Department.

At April 30, 150,000 units were still in work-in-process inventory. The degree of completion of work-in-process inventory at April 30 was as follows:


Direct materials	90	%
Direct labor	70
Manufacturing overhead	35

Required:

a. Prepare a production cost report using the weighted-average method. (Round "Cost per equivalent unit" to 2 decimal places.)

KANSAS SUPPLIES
Assembling Department
Production Cost ReportâWeighted-Average
Flow of Production Units
	Physical units
Units to be accounted for:
Beginning WIP inventory
Units started this period
Total units to be accounted for

	DETAILS
	Total Costs	Prior Department Costs	Materials	Labor	Manufacturing Overhead
Costs to be accounted for:
Costs in beginning WIP inventory
Current period costs
Total costs to be accounted for

Cost per equivalent unit:
Prior department costs
Materials
Labor
Manufacturing overhead

Costs accounted for:
Costs assigned to units transferred out:
Prior department costs
Materials
Labor
Manufacturing overhead
Total costs of units transferred out
Costs assigned to ending WIP inventory:
Prior department costs
Materials
Labor
Manufacturing overhead
Total ending WIP inventory
Total costs accounted for

yellowseal74

Douglas Toys is a manufacturer that uses FIFO costing method toaccount for costs of production. It produces a plastic toy in threeseparate departments: Molding, Assembling, and Finishing. Thefollowing information was obtained for the Assembling Departmentfor the month of September.

Work in process on September 1 had120,000 units made up of the following:

Amount

Degree ofCompletion

Prior departmentcosts transferred in from the Molding Department

178,800

100

Costs added by theAssembling Department

Manufacturing overhead

32,520

187,240

Work in process,September 1

366,040

During September, 520,000 unitswere transferred in from the Molding Department at a cost of$774,800. The Assembling Department added the following costs:

Manufacturingoverhead

161,880

Total costsadded

836,200

Assembling finished 420,000units and transferred them to the Finishing Department.

At September 30, 220,000 unitswere still in work-in-process inventory. The degree of completionof work-in-process inventory at September 30 was as follows:

Direct materials90%

Directlabor80

Manufacturingoverhead30

Required:

(a)

Prepare a production cost report using FIFO. (Round youranswer to 2 decimal places.)

DOUGLAS TOYS
Assembling Department
Production Cost ReportâFIFO
Flow of Production Units	COMPUTE EQUIVALENT UNITS
	Physical Units	Prior Department Costs	Materials	Labor	Manufacturing Overhead
Units tobe accounted for:
BeginningWIP inventory
Unitsstarted this period
Totalunits to be accounted for	0
Unitsaccounted for:
Unitscompleted and transferred out:
Frombeginning inventory
Startedand completed currently
Units inending WIP inventory
Totalunits accounted for	0	0	0	0	0

Costs		DETAILS
	Total Costs	Prior Department Costs	Materials	Labor	Manufacturing Overhead
Costs tobe accounted for:
Costs inbeginning WIP inventory
Currentperiod costs
Totalcosts to be accounted	$0	$0	$0	$0	$0

Cost perequivalent unit:
Priordepartment costs
Materials
Labor
Manufacturing overhead

	DETAILS
	Total Costs	Prior Department Costs	Materials	Labor	Manufacturing Overhead
Costsaccounted for:
Costsassigned to units transferred out:
Costsfrom beginning WIP inventory
Currentcosts added to complete beginning WIP inventory:
Priordepartment costs
Materials
Labor
Manufacturing overhead
Totalcosts from beginning inventory	$0
Currentcosts of units started and completed:
Priordepartment costs
Materials
Labor
Manufacturing overhead
Totalcosts of units started and completed	$0
Totalcosts of units transferred out	$0
Costsassigned to ending WIP inventory:
Priordepartment costs
Materials
Labor
Manufacturing overhead
Totalending WIP inventory	$0
Total costs accounted for	$0	$0	$0	$0	$0

emeraldbutterfly445

Please only answer if you're 100% on the answer and can fully complete. Thank you.

USE FIRST-IN, FIRST-OUT COSTING

Sulu Company produces its finished product in two processing departments--Assembly and Packaging.

The following information is available for the month of July:

Assembly Department:

The beginning work-in-process inventory was $5,755 ($4,815 direct materials and $940 conversion costs) and consisted of 350 units that were 10% complete as to conversion costs.

During July, an additional 4,500 units were started into production.

A total of 4,650 units were completed and transferred out to the Packaging Department.

The ending work-in-process inventory consisted of 200 units which were 35% complete as to conversion costs.

The following costs were incurred during July: direct materials $73,800; direct labor $86,300; and overhead $40,195.

Direct materials are added at the beginning of the process in the Assembly Department and conversion costs are incurred evenly throughout the production process.

Packaging Department:

The beginning work in process inventory was $29,631 ($18,606 transferred-in costs and $11,025 conversion costs) and consisted of 450 units that were 70% complete as to conversion costs.

During July, a total of 4,800 units were completed and transferred out to Finished Goods Inventory.

The ending work in process inventory consisted of 300 units which were 60% complete as to conversion costs.

The following costs were incurred during July: direct materials $132,480; direct labor $60,000; and overhead costs $105,141.

Direct materials are added at the end of the process in the Packaging Department and conversion costs are incurred evenly throughout the production process.

REQUIRED:

A. Prepare a production report for July for the Assembly Department.

B. Give the general journal entry to record the transfer of the completed units from the Assembly Department to the Packaging Department for July.

C. Prepare a production report for July for the Packaging Department.

cyanpig861

ACCT-241 Chapter Notes - Chapter 4: Finished Good

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