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., 2,600 units, ¼ completed: Direct materials (2,600 x $15.50) $40,300 Conversion (2,600 x ¼ x $8.50) 5,525 $45,825 From Smelting Department, 28,900 units 462,400 Direct labor 158,920 Factory overhead 101,402 During September, 2,600 units in process on September 1 were completed, and of the 28,900 units entering the department, all were completed except 2,900 units that were 4/5 completed. Charges to Work in Process—Rolling for October were as follows: From Smelting Department, 31,000 units $511,500 Direct labor 162,850 Factory overhead 104,494 During October, the units in process at the beginning of the month were completed, and of the 31,000 units entering the department, all were completed except 2,000 units that were 2/5 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.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Work in Process Account Data for Two Months; Cost of Production Reports
Pittsburgh Aluminum Company uses a
| Bal., 2,600 units, ¼ completed: | ||
| Direct materials (2,600 x $15.50) | $40,300 | |
| Conversion (2,600 x ¼ x $8.50) | 5,525 | |
| $45,825 | ||
| From Smelting Department, 28,900 units | 462,400 | |
| Direct labor | 158,920 | |
| Factory overhead | 101,402 |
During September, 2,600 units in process on September 1 were completed, and of the 28,900 units entering the department, all were completed except 2,900 units that were 4/5 completed.
Charges to Work in Process—Rolling for October were as follows:
| From Smelting Department, 31,000 units | $511,500 |
| Direct labor | 162,850 |
| Factory overhead | 104,494 |
During October, the units in process at the beginning of the month were completed, and of the 31,000 units entering the department, all were completed except 2,000 units that were 2/5 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., 2,600 units, 1/4 completed | fill in the blank 1 | fill in the blank 2 | fill in the blank 3 | fill in the blank 4 | |
| Sept. 30 | Smelting Dept., 28,900 units at $16.00/unit | fill in the blank 5 | fill in the blank 6 | fill in the blank 7 | fill in the blank 8 | |
| Sept. 30 | Direct labor | fill in the blank 9 | fill in the blank 10 | fill in the blank 11 | fill in the blank 12 | |
| Sept. 30 | Factory overhead | fill in the blank 13 | fill in the blank 14 | fill in the blank 15 | fill in the blank 16 | |
| Sept. 30 | Finished goods | fill in the blank 17 | fill in the blank 18 | fill in the blank 19 | fill in the blank 20 | |
| Sept. 30 | Bal., 2,900 units, 4/5 completed | fill in the blank 21 | fill in the blank 22 | fill in the blank 23 | fill in the blank 24 |
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 | fill in the blank 25 | ||
| Received from Smelting Department | fill in the blank 26 | ||
| Total units accounted for by the Rolling Department | fill in the blank 27 | ||
| Units to be assigned costs: | |||
| Inventory in process, September 1 | fill in the blank 28 | fill in the blank 29 | fill in the blank 30 |
| Started and completed in September | fill in the blank 31 | fill in the blank 32 | fill in the blank 33 |
| Transferred to finished goods in September | fill in the blank 34 | fill in the blank 35 | fill in the blank 36 |
| Inventory in process, September 30 | fill in the blank 37 | fill in the blank 38 | fill in the blank 39 |
| Total units to be assigned costs | fill in the blank 40 | fill in the blank 41 | fill in the blank 42 |
| Costs | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Costs | Direct Materials | Conversion | Total Costs | |||||||||
| Costs per equivalent unit: | ||||||||||||
| Total costs for September in Rolling Department | $fill in the blank 43 | $fill in the blank 44 | ||||||||||
| Total equivalent units | fill in the blank 45 | fill in the blank 46 | ||||||||||
| Cost per equivalent unit (b) | $fill in the blank 47 | $fill in the blank 48 | ||||||||||
| Costs charged to production: | ||||||||||||
| Inventory in process, September 1 | $fill in the blank 49 | |||||||||||
| Costs incurred in September | fill in the blank 50 | |||||||||||
| Total costs accounted for by the Rolling Department | $fill in the blank 51 | |||||||||||
| Cost allocated to completed and partially completed units: | ||||||||||||
| Inventory in process, September 1 balance (c) | $fill in the blank 52 | |||||||||||
| To complete inventory in process, September 1 (c) | $fill in the blank 53 | $fill in the blank 54 | fill in the blank 55 | |||||||||
| Cost of completed September 1 work in process | $fill in the blank 56 | |||||||||||
| Started and completed in September (c) | fill in the blank 57 | fill in the blank 58 | fill in the blank 59 | |||||||||
| Transferred to finished goods in September (c) | $fill in the blank 60 | |||||||||||
| Inventory in process, September 30 (d) | fill in the blank 61 | fill in the blank 62 | fill in the blank 63 | |||||||||
| Total costs assigned by the Rolling Department | $fill in the blank 64 |
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