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All Things Brass produces brass handles for the furniture industry in a four-stage process -Mixing, Moulding, Polishing and Packaging. Costs incurred in the Polishing Department during January are summarized as follows: WIP- POLISHING PROCESS A/C JANUARY 1 BALANCE Transfer from Moulding 20,000 Direct Materials Added Direct labour 1,310,000 391,000 638,000 307 A00 Manufacturing overhead Normal losses are estimated to be 2%9% of input during the period. Inspection takes place during the processing operation, at which point damaged handles are separated from good handles and sold as scrap to local furniture manufacturers at S85 each. At inspection, 2,000 handles were rejected as scrap. These units had reached the following degree of completion: Transfer from Moulding 100% Direct material added 40% Conversion costs 20% Work-in-progress at the end of January was 4,000 handles and had reached the following degree of completion: Transfer from Moulding 100% Direct material added s0% Conversion costs 509% Direct materials added and conversion costs are incurred uniformly throughout the process.

All Things Brass produces brass handles for the furniture industry in a four-stage process -Mixing, Moulding, Polishing and Packaging. Costs incurred in the Polishing Department during January are summarized as follows: WIP- POLISHING PROCESS A/C JANUARY 1 BALANCE Transfer from Moulding 20,000 Direct Materials Added Direct labour 1,310,000 391,000 638,000 307 A00 Manufacturing overhead Normal losses are estimated to be 2%9% of input during the period. Inspection takes place during the processing operation, at which point damaged handles are separated from good handles and sold as scrap to local furniture manufacturers at S85 each. At inspection, 2,000 handles were rejected as scrap. These units had reached the following degree of completion: Transfer from Moulding 100% Direct material added 40% Conversion costs 20% Work-in-progress at the end of January was 4,000 handles and had reached the following degree of completion: Transfer from Moulding 100% Direct material added s0% Conversion costs 509% Direct materials added and conversion costs are incurred uniformly throughout the process.

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter6: Process Costing
Section: Chapter Questions
Problem 42P: Larkin Company produces leather strips for western belts using three processes: cutting, design and...
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All Things Brass produces brass handles for the furniture industry in a four-stage process -Mixing, Moulding, Polishing and Packaging. Costs incurred in the Polishing Department during January are summarized as follows: WIP- POLISHING PROCESS A/C JANUARY 1 BALANCE Transfer from Moulding 20,000 Direct Materials Added 1,310,000 391,000 Direct labour 638,000 Manufacturing overhead 307,400 Normal losses are estimated to be 2% of input during the period. Inspection takes place during the processing operation, at which point damaged handles are separated from good handles and sold as scrap to local furniture manufacturers at $85 each. At inspection, 2,000 handles were rejected as scrap. These units had reached the following degree of completion: Transfer from Moulding 1009% Direct material added 40% Conversion costs 20% Work-in-progress at the end of January was 4,000 handles and had reached the following degree of completion: Transfer from Moulding 100% Direct material added 80% Conversion costs 50% Direct materials added and conversion costs are incurred uniformly throughout the process.
Transcribed Image Text:All Things Brass produces brass handles for the furniture industry in a four-stage process -Mixing, Moulding, Polishing and Packaging. Costs incurred in the Polishing Department during January are summarized as follows: WIP- POLISHING PROCESS A/C JANUARY 1 BALANCE Transfer from Moulding 20,000 Direct Materials Added 1,310,000 391,000 Direct labour 638,000 Manufacturing overhead 307,400 Normal losses are estimated to be 2% of input during the period. Inspection takes place during the processing operation, at which point damaged handles are separated from good handles and sold as scrap to local furniture manufacturers at $85 each. At inspection, 2,000 handles were rejected as scrap. These units had reached the following degree of completion: Transfer from Moulding 1009% Direct material added 40% Conversion costs 20% Work-in-progress at the end of January was 4,000 handles and had reached the following degree of completion: Transfer from Moulding 100% Direct material added 80% Conversion costs 50% Direct materials added and conversion costs are incurred uniformly throughout the process.
Required: (a) Prepare a statement of equivalent production to determine the equivalent units for direct materials (From Moulding & Direct Material Added), and conversion costs and the cost per equivalent unit for direct materials and conversion costs. (b) Calculate the: - Total cost of units completed and transferred to the Packaging Department - Cost of the unexpected losses - Cost of ending work-in-process inventory in the Polishing Department (c) Complete All Things Brass Work-In-Process Inventory- Polishing Process T-account, clearly showing the ending balance. (d) Prepare the journal entries for the: • assignment of direct materials, direct labour incurred, and the manufacturing overhead applied to the Polishing Process • cost of the units completed and transferred out to the Packaging Process (e) Given that 30% of the unexpected losses were because of pilferage, prepare the abnormal spoilage statement, clearly showing All Things Brass true loss associated with the Polishing Process
Transcribed Image Text:Required: (a) Prepare a statement of equivalent production to determine the equivalent units for direct materials (From Moulding & Direct Material Added), and conversion costs and the cost per equivalent unit for direct materials and conversion costs. (b) Calculate the: - Total cost of units completed and transferred to the Packaging Department - Cost of the unexpected losses - Cost of ending work-in-process inventory in the Polishing Department (c) Complete All Things Brass Work-In-Process Inventory- Polishing Process T-account, clearly showing the ending balance. (d) Prepare the journal entries for the: • assignment of direct materials, direct labour incurred, and the manufacturing overhead applied to the Polishing Process • cost of the units completed and transferred out to the Packaging Process (e) Given that 30% of the unexpected losses were because of pilferage, prepare the abnormal spoilage statement, clearly showing All Things Brass true loss associated with the Polishing Process
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