Work in Process Account Data for Two Months; Cost of Production Reports Pittsbur
ID: 2402041 • Letter: W
Question
Work in Process Account Data for Two Months; Cost of Production Reports
Pittsburgh Aluminum Company uses a process cost system to record the costs of manufacturing rolled aluminum, which consists of the smelting and rolling processes. Materials are entered from smelting at the beginning of the rolling process. The inventory of Work in Process—Rolling on September 1 and debits to the account during September were as follows:
Bal., 800 units, 20% completed:
Direct materials (800 x $4.6) $ 3,680
Conversion (800 x 20% x $1.9) 304
$ 3,984
From Smelting Department, 18,320 units $86,104
Direct labor 23,764
Factory overhead 12,796
During September, 800 units in process on September 1 were completed, and of the 18,320 units entering the department, all were completed except 1,700 units that were 60% completed. Charges to Work in Process—Rolling for October were as follows:
From Smelting Department, 21,100 units $103,390
Direct labor 29,590
Factory overhead 15,938
During October, the units in process at the beginning of the month were completed, and of the 21,100 units entering the department, all were completed except 1,000 units that were 90% completed.
Required:
1. Enter the balance as of September 1 in a four-column account for Work in Process—Rolling. Record the debits and the credits in the account for September. Construct a cost of production report and present computations for determining (a) equivalent units of production for materials and conversion, (b) costs per equivalent unit, (c) cost of goods finished, differentiating between units started in the prior period and units started and finished in September, and (d) work in process inventory. If an amount box does not require an entry, leave it blank.
ACCOUNT Work in Process-Rolling Department ACCOUNT NO.
BALANCE
DATE ITEM POST. REF. DEBIT CREDIT DEBIT CREDIT
Sept. 1 Bal., 800 units, 20% completed
3,984
3,984
Sept. 30 Smelting Dept., 18,320 units at $4.7
86,104
Sept. 30 Direct labor
23,764
Sept. 30 Factory overhead
12,796
Sept. 30 Finished goods
Sept. 30 Bal., 1,700 units, 60% completed
If an amount is zero, enter in a zero "0". Round cost per unit answers to the nearest cent.
Pittsburgh Aluminum Company
Cost of Production Report-Rolling Department
For the Month Ended September 30
Whole Units Equivalent Units
Units Direct Materials (a) Conversion (a)
Units charged to production:
Inventory in process, September 1
Received from Smelting Department
Total units accounted for by the Rolling Department
Units to be assigned costs:
Inventory in process, September 1
Started and completed in September
Transferred to finished goods in September
Inventory in process, September 30
Total units to be assigned costs
Costs
Costs Direct Materials Conversion Total Costs
Cost per equivalent unit:
Total costs for September in Rolling Department $
$
Total equivalent units
Cost per equivalent unit (b) $
$
Costs assigned to production:
Inventory in process, September 1 $
Costs incurred in September
Total costs accounted for by the Rolling Department $
Costs allocated to completed and partially completed units:
Inventory in process, September 1 balance (c) $
To complete inventory in process, September 1 (c) $
$
Cost of completed September 1 work in process $
Started and completed in September (c) $
Transferred to finished goods in September (c) $
Inventory in process, September 30 (d)
Total costs assigned by the Rolling Department $
2. Provide the same information for October by recording the October transactions in the four-column work in process account. Construct a cost of production report, and present the October computations (a through d) listed in part (1). If an amount box does not require an entry, leave it blank.
ACCOUNT Work in Process-Rolling Department ACCOUNT NO.
Balance
DATE ITEM POST. REF. DEBIT CREDIT DEBIT CREDIT
October 1 Balance
October 31 Smelting Dept., 21,100 units at $4.9
October 31 Direct labor
October 31 Factory overhead
October 31 Finished goods
October 31 Bal., 1,000 units, 90% completed
If an amount is zero, enter in a zero "0". Round cost per unit answers to the nearest cent.
Pittsburgh Aluminum Company
Cost of Production Report-Rolling Department
For the Month Ended October 31
Whole Units Equivalent Units
Units Direct Materials (a) Conversion (a)
Units charged to production:
Inventory in process, October 1
Received from Smelting Department
Total units accounted for by the Rolling Department
Units to be assigned costs:
Inventory in process, October 1
Started and completed in October
Transferred to finished goods in October
Inventory in process, October 31
Total units to be assigned costs
Costs
Costs Direct Materials Conversion Total Costs
Cost per equivalent unit:
Total costs for October in Rolling Department $
$
Total equivalent units
Cost per equivalent unit (b) $
$
Costs assigned to production:
Inventory in process, October 1 $
Costs incurred in October
Total costs accounted for by the Rolling Department $
Costs allocated to completed and partially completed units:
Inventory in process, October 1 balance (c) $
To complete inventory in process, October 1 (c) $
$
Cost of completed October 1 work in process $
Started and completed in October (c)
Transferred to finished goods in October (c) $
Inventory in process, October 31 (d)
Total costs assigned by the Rolling Department $
3. The cost per equivalent unit for direct materials
from August to October. The cost per equivalent unit for conversion costs
from August to October. These changes
be investigated for their underlying causes, and any necessary corrective actions should be taken.
Explanation / Answer
Work in Process-Rolling 1 Date Item Debit Credit Balance Dr. Balance Cr. 2 Sept. 1 Balance $3,984 3 30 Smelting Department 86104 $90,088 4 30 Direct labor 23764 $113,852 5 30 Factory overhead 12796 $126,648 6 30 Finished goods $116,618 $10,030 Cost of Production Report-Rolling Department For the Month Ended September 30, 2016 UNITS Whole Units Equivalent Units Direct Materials Conversion Units charged to production: Inventory in process, September 1 800 Received from Smelting Department 18320 Total units accounted for by the Rolling Department 19120 Units to be assigned costs: Inventory in process, September 1 ( completed) b 800 0 640 (800*80%) Started and completed in September a 16620 16620 16620 Transferred to finished goods in September (19120-1700) 17420 16620 17260 Inventory in process, September 30 ( completed) e 1700 1700 1020 (1700*60%) Total units to be assigned costs 19120 18320 18280 COSTS Costs Direct Materials Conversion Total Costs per equivalent unit: Total costs for September in Rolling Department 86104 36560 122664 Total equivalent units 18320 18280 ÷ Costs per equivalent unit C 4.7 2 Costs assigned to production: Inventory in process, September 1 $3,984 Costs incurred in September 122664 Total costs accounted for by the Rolling Department $126,648 Cost allocated to completed and partially completed units: Inventory in process, September 1 balance $3,984 To complete inventory in process, September 1 (640*2) 0 1280 1280 Cost of completed September 1 work in process $5,264 Started and completed in September (a*c) 78114 33240 111354 Transferred to finished goods in September $116,618 Inventory in process, September 30 (e*c) 7990 2040 10030 Total costs assigned by the Rolling Department $126,648 Work in Process-Rolling 1 Date Item Debit Credit Balance Dr. Balance Cr. 30 Balance $10,030 Oct. 31 Smelting Department 103390 $113,420 31 Direct labor 29590 $143,010 31 Factory overhead 15938 $158,948 31 Finished goods $152,158 $6,790 31 Balance Cost of Production Report-Rolling Department For the Month Ended October 31 UNITS Whole Units Equivalent Units Direct Materials Conversion Units charged to production: Inventory in process, September 1 1700 Received from Smelting Department 21100 Total units accounted for by the Rolling Department 22800 Units to be assigned costs: Inventory in process, September 1 ( completed) b 1700 0 680 (1700*40%) Started and completed in Oct a 20100 20100 20100 Transferred to finished goods in Oct 21800 20100 20780 Inventory in process, October 31 ( completed) e 1000 1000 900 Total units to be assigned costs 22800 21100 21680 COSTS Costs Direct Materials Conversion Total Costs per equivalent unit: Total costs for September in Rolling Department 103390 45528 148918 Total equivalent units 21100 21680 ÷ Costs per equivalent unit C 4.9 2.1 Costs assigned to production: Inventory in process, September 1 $10,030 Costs incurred in September 148918 Total costs accounted for by the Rolling Department $158,948 Cost allocated to completed and partially completed units: Inventory in process, October 1 balance $10,030 To complete inventory in process, October 1 (a*e) 0 1428 1428 Cost of completed Octoberber 1 work in process $11,458 Started and completed in October (a*c) 98490 42210 140700 Transferred to finished goods in October $152,158 Inventory in process, October 30 (e*c) 4900 1890 6790 Total costs assigned by the Rolling Department $158,948 If any doubt please comment
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