Recycle Industries of Toronto recycles galvanized steel from automobile bodies in two processes: shredding and degalvanizing. It processes galvanized steel auto bodies in the shredding process and send the shredded steel to the newly developed degalvanizing process which removes zinc by electrolysis. Zinc, which has a relatively high value, is the principal product of the process. The company transferred 6,000 metric tons of steel to the devalvanizing process this month. Neither process had any spoilage. Because the galvanized steel is homogeneous and shredded in a continuous process, the company uses a process-costing accounting system to assign costs to it. The following information is available for the degalvanizing process during the last year. RECYCLE INDUSTRIES, INC Degalvanizing Process Last Year Degalvanizing Process Units Shredding Process Costs Direct Materials Conversion Costs Physical flow (metric tons) Beginning inventory…………………….. 1,000 60% complete 75% complete Ending inventory…………………………. 2,700 80% complete 45% complete Transferred in……………………………… 6,000 Cost incurred Beginning inventory……………………………………. $ 7,100,000 $ 600,000 $ 420,000 Current costs…………………………………..…………. 43,200,000 2,500,000 6,475,000 Required Prepare a production cost report for the degalvanizing process using weighted-average costing. What journal entry would be made after preparing the production cost report for the degalvanizing process?
Recycle Industries of Toronto recycles galvanized steel from automobile bodies in two processes: shredding and degalvanizing. It processes galvanized steel auto bodies in the shredding process and send the shredded steel to the newly developed degalvanizing process which removes zinc by electrolysis. Zinc, which has a relatively high value, is the principal product of the process. The company transferred 6,000 metric tons of steel to the devalvanizing process this month. Neither process had any spoilage.
Because the galvanized steel is homogeneous and shredded in a continuous process, the company uses a process-costing accounting system to assign costs to it. The following information is available for the degalvanizing process during the last year.
RECYCLE INDUSTRIES, INC
Degalvanizing Process Last Year
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Degalvanizing Process |
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Units |
Shredding Process Costs |
Direct Materials |
Conversion Costs |
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Physical flow (metric tons) |
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Beginning inventory…………………….. |
1,000 |
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60% complete |
75% complete |
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Ending inventory…………………………. |
2,700 |
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80% complete |
45% complete |
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Transferred in……………………………… |
6,000 |
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Cost incurred |
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Beginning inventory……………………………………. |
$ 7,100,000 |
$ 600,000 |
$ 420,000 |
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Current costs…………………………………..…………. |
43,200,000 |
2,500,000 |
6,475,000 |
Required
- Prepare a production cost report for the degalvanizing process using weighted-average costing.
- What
journal entry would be made after preparing the production cost report for the degalvanizing process?
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