Question

Major League Bat Company manufactures baseball bats. In addition to its work in process inventories, the company maintains inventories of raw materials and finished goods. It uses raw materials as direct materials in production and as indirect materials. Its factory payroll costs include direct labor for production and indirect labor. All materials are added at the beginning of the process, and conversion costs are applied uniformly throughout the production process. Required: You are to maintain records and produce measures of inventories to reflect the July events of this company. The June 30 balances: Raw Materials Inventory, $29,000; Work in Process Inventory, $7,835 ($3,160 of direct materials and $4,675 of conversion); Finished Goods Inventory, $100,000; Sales, $0; Cost of Goods Sold, $0; Factory Wages Payable, $0; and Factory Overhead, $0. 1. Prepare journal entries to record the following July transactions and events. a. Purchased raw materials for $165,000 cash (the company uses a perpetual inventory system). b. Used raw materials as follows: direct materials, $58,040; and indirect materials, $15,000. c. Recorded factory wages payable costs as follows: direct labor, $214,750; and indirect labor, $30,000. d. Paid factory payroll cost of $244,750 with cash (ignore taxes). e. Incurred additional factory overhead costs of $90,000 paid in cash. f. Applied factory overhead to production at 50% of direct labor costs. 2. Information about the July inventories follows. Use this information with that from part 1 to prepare a process cost summary, assuming the weighted average method is used. (Round "Cost per EUP" to 2 decimal places.) 8,000 units 10,000 units 4,000 units Units Beginning inventory Started Ending inventory Beginning inventory Materials-Percent complete Conversion-Percent complete Ending inventory Materials,Percent complete Conversion-Percent complete 1008 70% 100% 30%

Can you please help me finish this whole problem. I am having trouble finding the conversion costs incurred for the period.

Answer 1

2.

Equivalent units of production (EUP)- weighted average method
	Units	% Materials	EUP- Materials	% Labor	EUP- Conversion
Units transferred	14000	100%	14000	100%	14000
Ending Work in Process	4000	100%	4000	30%	1200
Total units	18000		18000		15200
Cost per equivalent unit of production			Materials		Conversion
Beginning Work in Process			$         3,160		$              4,675
Cost added			$       58,040		$          322,125
Total costs		Costs	$       61,200	Costs	$          326,800
÷ Equivalent units of production		EUP	18000	EUP	15200
Cost per equivalent unit of production (rounded to 2 decimals)			$            3.40		$              21.50
Total costs accounted for:
Cost of units transferred out:	EUP	Cost per EUP	Total cost
Direct materials	14000	$              3.40	$       47,600
Conversion	14000	$            21.50	$     301,000
Total costs transferred out			$     348,600
Costs of ending goods in process	EUP	Cost per EUP	Total cost
Direct materials	4000	$              3.40	$       13,600
Conversion	1200	$            21.50	$       25,800
Total cost of ending goods in process			$       39,400
Total costs accounted for			$     388,000

3.

Account Titles	Debit	Credit
Finished Goods Inventory	$     348,600
Work in Process Inventory		$       348,600
(Transferred to finished goods)
Cash	$     675,000
Sales Revenue		$       675,000
(Sales made on account)
Cost of Goods sold	$     290,700
Finished Goods Inventory		$       290,700
(Cost of goods sold)

4.

Raw Material Inventory					Work in Process Inventory
	Debit	Credit	Balance			Debit	Credit	Balance
Jun-30			$       29,000		Jun-30			$              7,835
a.	$     165,000		$     194,000		b	$            58,040		$            65,875
b.		$         73,040	$     120,960		c	$          214,750		$          280,625
					f	$          107,375		$          388,000
					g		$          348,600	$            39,400
Finished Goods Inventory					Factory Wages Payable
	Debit	Credit	Balance			Debit	Credit	Balance
Jun-30			$     100,000		Jun-30
g	$     348,600		$     448,600		c		$          244,750	$          244,750
h		$       290,700	$     157,900		d	$          244,750		$                     -
Sales					Cost of Goods Sold
	Debit	Credit	Balance			Debit	Credit	Balance
Jun-30					Jun-30
h		$       675,000	$     675,000		h	$          290,700		$          290,700
Factory Overhead
	Debit	Credit	Balance
Jun-30
b	$       15,000		$       15,000
c	$       30,000		$       45,000
e	$       90,000		$     135,000
f		$       107,375	$       27,625

5.
Cost of Goods Sold = $290700+27625 = $318325
Gross Profit = $675000-318325 = $356675