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., 1,000 units, 20% completed:     Direct materials (1,000 x $5.3) $ 5,300   Conversion (1,000 x 20% x $2.2) 440   $ 5,740 From Smelting Department, 24,200 units $130,680 Direct labor 35,940 Factory overhead 19,352 During September, 1,000 units in process on September 1 were completed, and of the 24,200 units entering the department, all were completed except 2,400 units that were 60% completed. Charges to Work in Process—Rolling for October were as follows: From Smelting Department, 27,800 units $155,680 Direct labor 44,660 Factory overhead 24,052 During October, the units in process at the beginning of the month were completed, and of the 27,800 units entering the department, all were completed except 1,300 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.

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., 1,000 units, 20% completed:  
  Direct materials (1,000 x $5.3) $ 5,300
  Conversion (1,000 x 20% x $2.2) 440
  $ 5,740
From Smelting Department, 24,200 units $130,680
Direct labor 35,940
Factory overhead 19,352

During September, 1,000 units in process on September 1 were completed, and of the 24,200 units entering the department, all were completed except 2,400 units that were 60% completed. Charges to Work in Process—Rolling for October were as follows:

From Smelting Department, 27,800 units $155,680
Direct labor 44,660
Factory overhead 24,052

During October, the units in process at the beginning of the month were completed, and of the 27,800 units entering the department, all were completed except 1,300 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.

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
v 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.
Expand
Transcribed Image Text

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 v 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.

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., 27,800 units at $5.6
October 31
Direct labor
October 31
Factory overhead
October 31
Finished goods
October 31
Bal., 1,300 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
Direct
Conversion
Units
Materials (a)
(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
Expand
Transcribed Image Text

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., 27,800 units at $5.6 October 31 Direct labor October 31 Factory overhead October 31 Finished goods October 31 Bal., 1,300 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 Direct Conversion Units Materials (a) (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

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