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 aresummarized as follows:WIP - Polishing Process A/CJanuary 1 Bal.Transfer from Moulding$ 01,310,00020,000Direct Materials Added391,600Direct Labour638,000307,400Manufacturing OverheadNormal losses are estimated to be 2%% of input during the period. Inspection takes place during theprocessing operation, at which point damaged handles are separated from good handles and sold as scrapto local furniture manufacturers at $85 each.At inspection, 2,000 handles were rejected as scrap. These units had reached the following degree ofcompletion:Transfer from Moulding100%Direct material added40%Conversion costs20%Work-in-progress at the end of January was 4,000 handles and had reached the following degree ofcompletion:Transfer from Moulding100%Direct material added80%Conversion costs50%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 fordirect materials and conversion costs.(b)Calculate the:Total cost of units completed and transferred to the Packaging DepartmentCost of the unexpected lossesCost 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 theending balance.(d)Prepare the journal entries for the:"assignment of direct materials, direct labour incurred, and the manufacturing overhead applied tothe Polishing Process"cost of the units completed and transferred out to the Packaging Procer(e)Given that 30% of the unexpected losses were because of pilferage, prepare the abnormal spoilagestatement, clearly showing All Things Brass true loss associated with the Polishing Process.

Given as, January 1 Bal. $ 0Transfer from…

Answered: ials Added ng Overhead

Business

Accounting

ials Added ng Overhead

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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Baxter Company has two processing departments: Assembly and Finishing. A predetermined overhead rate of 10 per DLH is used to assign overhead to production. The company experienced the following operating activity for April: a. Materials issued to Assembly, 24,000 b. Direct labor cost: Assembly, 500 hours at 9.20 per hour; Finishing, 400 hours at 8 per hour c. Overhead applied to production d. Goods transferred to Finishing, 32,500 e. Goods transferred to finished goods warehouse, 20,500 f. Actual overhead incurred, 10,000 Required: 1. Prepare the required journal entries for the preceding transactions. 2. Assuming Assembly and Finishing have no beginning work-in-process inventories, determine the cost of each departments ending work-in-process inventories.
Chavez Concrete Inc. has two production departments. Blending had 1,000 units in process at the beginning of the period, two-fifths complete. During the period 7,800 units were received from Mixing, 8,200 units were transferred to the finished goods storeroom, and 600 units were in process at the end of the period, 1/3 complete. The cost of the beginning work in process was: The costs during the month were: 1. Using the data in E5-15, prepare a cost of production summary for the month ended January 31, 2016. 2. Prepare a journal entry to transfer the cost of the completed units from Blending to the finished goods storeroom.
Holmes Products, Inc., produces plastic cases used for video cameras. The product passes through three departments. For April, the following equivalent units schedule was prepared for the first department: Costs assigned to beginning work in process: direct materials, 90,000; conversion costs, 33,750. Manufacturing costs incurred during April: direct materials, 75,000; conversion costs, 220,000. Holmes uses the weighted average method. Required: 1. Compute the unit cost for April. 2. Determine the cost of ending work in process and the cost of goods transferred out.
The records of Burris Inc. reflect the following data: Work in process, beginning of month2,000 units one-half completed at a cost of 1,250 for materials, 675 for labor, and 950 for overhead. Production costs for the monthmaterials, 99,150; labor, 54,925; factory overhead, 75,050. Units completed and transferred to stock38,500. Work in process, end of month3,000 units, one-half completed. Compute the months unit cost for each element of manufacturing cost and the total per unit cost.
A company manufactures a liquid product called Crystal. The basic ingredients are put into process in Department 1. In Department 2, other materials are added that increase the number of units being processed by 50%. The factory has only two departments. Calculate the following for each department: (a) unit cost for the month for materials, labor, and factory overhead, (b) cost of the units transferred, and (c) cost of the ending work in process.
Larkin Company produces leather strips for western belts using three processes: cutting, design and coloring, and punching. The weighted average method is used for all three departments. The following information pertains to the Design and Coloring Department for the month of June: a. There was no beginning work in process. b. There were 400,000 units transferred in from the Cutting Department. c. Ending work in process, June 30: 50,000 strips, 80 percent complete with respect to conversion costs. d. Units completed and transferred out: 330,000 strips. The following costs were added during the month: a. Direct materials are added at the beginning of the process. b. Inspection takes place at the end of the process. All spoilage is considered normal. Required: 1. Calculate equivalent units of production for transferred-in materials, direct materials added, and conversion costs. 2. Calculate unit costs for the three categories of Requirement 1. 3. What is the total cost of units transferred out? What is the cost of ending work-in-process inventory? How is the cost of spoilage treated? 4. Assume that all spoilage is considered abnormal. Now, how is spoilage treated? Give the journal entry to account for the cost of the spoiled units. Some companies view all spoilage as abnormal. Explain why. 5. Assume that 80 percent of the units spoiled are abnormal and 20 percent are normal spoilage. Show the spoilage treatment for this scenario.
SCHEDULE OF COST OF GOODS MANUFACTURED The following information is supplied for Maupin Manufacturing Company. Prepare a schedule of cost of goods manufactured for the year ended December 31, 20--. Assume that all materials inventory items are direct materials. Work in process, January 1 77,000 Materials inventory, January 1 31,000 Materials purchases 35,000 Materials inventory, December 31 26,000 Direct labor 48,000 Overhead 20,000 Work in process, December 31 62,000
Mimasca Inc. manufactures various holiday masks. Each mask is shaped from a piece of rubber in the molding department. The masks are then transferred to the finishing department, where they are painted and have elastic bands attached. Mimasca uses the weighted average method. In May, the molding department reported the following data: a. BWIP consisted of 15.000 units, 20% complete. Cost in beginning inventor) totaled 1,656. b. Costs added to production during the month were 26,094. c. At the end of the month, 45.000 units were transferred out to finishing. Then, 5,000 units remained in EWIP, 25% complete. Required: 1. Prepare a physical flow schedule. 2. Calculate equivalent units of production. 3. Compute unit cost. 4. Calculate the cost of goods transferred to finishing at the end of the month. Calculate the cost of ending inventor). 5. CONCEPTUAL CONNECTION Assume that the masks are inspected at the end of the molding process. Of the 45,000 units inspected, 2,500 are rejected as faulty and are discarded. Thus, only 42,500 units are transferred to the finishing department. The manager of Mimasca considers all such spoilage as abnormal and does not want to assign any of this cost to the 42.500 good units produced and transferred to finishing. Your task is to determine the cost of this spoilage of 2,500 units and then to discuss how you would account for this spoilage cost. Now suppose that the manager feels that this spoilage cost is just part of the cost of producing the good units transferred out. Therefore, he wants to assign this cost to the good production. Explain how this would be handled. (Hint: Spoiled units are a type of output, and equivalent units of spoilage can be calculated.)
The records of Stone Inc. reflect the following data: Work in process, beginning of month4,000 units one-fourth completed at a cost of 2,500 for materials, 1,400 for labor, and 1,800 for overhead. Production costs for the monthmaterials, 130,000; labor, 70,000; and factory overhead, 82,000. Units completed and transferred to stock45,000. Work in process, end of month5,000 units, one-half completed. Compute the months unit cost for each element of manufacturing cost and the total per unit cost. (Round unit costs to three decimal places.)
Softkin Company manufactures sun protection lotion. The Mixing Department, the first process department, mixes the chemicals required for the repellant. The following data are for the current year: Direct materials are added at the beginning of the process. Ending inventory is 95 percent complete with respect to direct labor and overhead. Required: Prepare a production report for the Mixing Department for the current year.
Use the following information for Problems 6-62 and 6-63: Millie Company produces a product that passes through an assembly process and a finishing process. All manufacturing costs are added uniformly for both processes. The following information was obtained for the assembly department for June: a. WIP, June 1, had 24,000 units (60% completed) and the following costs: b. During June, 70,000 units were completed and transferred to the finishing department, and the following costs were added to production: c. On June 30, there were 10,000 partially completed units in process. These units were 70% complete. 6-62 Weighted Average Method, Single-Department Analysis Refer to the information for Millie Company above. Required: Prepare a production report for the assembly department for June using the weighted average method of costing. The report should disclose the physical flow of units, equivalent units, and unit costs and should track the disposition of manufacturing costs.
Use the following information for Problems 6-62 and 6-63: Millie Company produces a product that passes through an assembly process and a finishing process. All manufacturing costs are added uniformly for both processes. The following information was obtained for the assembly department for June: a. WIP, June 1, had 24,000 units (60% completed) and the following costs: b. During June, 70,000 units were completed and transferred to the finishing department, and the following costs were added to production: c. On June 30, there were 10,000 partially completed units in process. These units were 70% complete. 6-63 (Appendix 6A) First-In, First-Out Method; Single-Department Analysis; One Cost Category Refer to the information for Millie Company above. Required: Prepare a production report for the assembly department for June using the FIFO method of costing. The report should disclose the physical flow of units, equivalent units, and unit costs and should track the disposition of manufacturing costs. (Note: Carry the unit cost computation to four decimal places.)