Concept explainers
Problem 16-4B Weighted average: Process cost summary; equivalent units; costs estimates C2 C3 P4
Switch Co. manufactures a single product in one department. Direct labor overhead are added evenly throughout the process. Direct materials are added as needed. The inventory, Its uses monthly reporting periods for its weighted-average
Required
- Prepare the company’s process cost summary for January using the weighted-average method. Check (1) EUP for conversion, 232.000
- Prepare the
Journal entry dated January 31 to transfer the cost completed units to finished goods inventory.
(2) Cost transferred out to finished goods, $741,400
Analysis Component
- Identify two major estimates that affect the cost per equivalent unit.
- In what direction might you anticipate a bias from management for each estimate in part 3a (assume that management compensation is based on maintaining low inventory amounts)? Explain your answer.
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Chapter 16 Solutions
Financial and Managerial Accounting (Looseleaf) (Custom Package)
- 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.arrow_forwardThe Rolling Department of Kraus Steel Company had 200 tons in beginning work in process inventory (60% complete) on October 1. During October, 3,900 tons were completed. The ending work in process inventory on October 31 was 300 tons (25% complete). What are the total equivalent units for conversion costs?arrow_forwardStandard cost journal entries Bellingham Company produced 15,000 units that require 2.5 standard pounds per unit at a 3.75 standard price per pound. The company actually used 36,000 pounds in production. Journalize the entry to record the standard direct materials used in production.arrow_forward
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- Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage Learning
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