Question

Jackson's Exteriors produces exterior siding for homes. The Preparation Department begins with​ wood, which is chopped into small bits. At the end of the​ process, an adhesive is added. Then the​ wood/adhesive mixture goes on to the Compression​ Department, where the wood is compressed into sheets. Conversion costs are added evenly throughout the preparation process.

January data for the Preparation Department are as​ follows:

UNITS
Beginning Work-in-Process Inventory	0	sheets
Started in production	4,200	sheets
Completed and transferred out to	2,800	sheets
Compression in January
Ending Work-in-Process inventory (45% of	1,400	sheets
the way through the preparation process)
COSTS
Beginning Work-in-Process Inventory	$0
Costs added during January:
Wood	3,570
Adhesives	1,120
Direct labor	3,488
Manufacturing overhead allocated	2,000
Total costs	$10,178

  

Read the requirements

Requirement 1. Prepare a production cost report for the Preparation Department for January. The company uses the​ weighted-average method.

​(Hint​: Each direct material added at a different point in the production process requires its own equivalent units of production​ computation.)​ (Complete all answer boxes. Enter a​ "0" for any zero balances. Round all cost per unit amounts to the nearest cent and all other amounts to the nearest whole dollar. Abbreviation​ used: EUP​ = equivalent units of​ production.)

Jackson's Exteriors
Production Cost Report-Preparation Department
Month Ended January 31
		Equivalent Units
	Physical	Direct Materials		Conversion
UNITS	Units	Wood	Adhesive	Costs
Units to account for:
Beginning work-in-process
Started in production
Total units to account for
Units accounted for:
Completed and transferred out
Ending work-in-process
Total units accounted for

	Direct Materials		Conversion	Total
COSTS	Wood	Adhesives	Costs	Costs
Costs to account for:
Total costs to account for
Cost per equivalent unit

Costs accounted for:	_____	_______	_______	__________
Total costs accounted for

Requirement 2. Prepare the journal entry to record the cost of the sheets completed and transferred out to the Compression Department. ​(Record debits​ first, then credits. Exclude explanations from any journal​ entries.)

   

Date		Accounts	Debit	Credit
Jan.	31

Requirement 3. Post the journal entries to the Work in process inventory long dash—Preparation ​T-account. What is the ending​ balance? Post all transactions to the​ Work-in-Process Inventory long dash—Preparation​T-account using the appropriate descriptions as posting references. Calculate and enter the ending balance of the​ account, "Bal. Jan. 31​", on the appropriate side of the​ T-account.

Work-in-Process Inventory—Preparation
Bal. Dec. 31	_____

Answer 1

Jackson's Exteriors Requirement 1 Conversion Costs Production Cost Report-Preparation Department Month Ended January 31 Physical Direct Materials Units Units Wood Adhesive Units to account for Beginning work-in-process Started in production Total units to account for 4200 4200 2800 Units accounted for: Completed and transferred out Ending work-in-process Total units accounted for 1,400 x 45% = 630 2800 1400 4200 2800 14000 4200 2800 2800 630 3430 Direct Materials Wood Adhesive Conversion Costs Total Costs COSTS Costs to account for: Beginning work-in-process Costs added during period Total costs to account for Divided by: Total EUP Cost per equivalent unit 0 3570 3570 4200 0.85 0 1120 1120 2800 0.4 10178 10178 5488 5488 3430 1.6 2.85 1000 Costs accounted for: Completed and transferred out Ending work-in-process Total costs accounted for 2380 850 3230 4000 1008 5008 7380 1858 9238 1000 2,800 EUP X $0.85 per EUP = $2,380 1,400 EUP $0.85 per EUP = $850 2,500 EUP $0.4 per EUP = $1,000 2,500 EUP x $1.60 per EUP = $4,000 630 EUP $1.60 per EUP = $1,008

Requirement 2 Requirement 3 7380 Journal Enteries Date Particulars Jan-31 Work-in-Process Inventory-Compression a/c Dr. To Work-in-Process Inventory-Preparation (Transfer costs assigned to units transferred.) Debit in $ Credit in $ 7380 7380 Work-in-Process-Preparation Balance, Jan. 1 o Transferred to Compression Direct Materials-Wood 3230 Direct Materials-Adhesives 1000 Direct Labor 3488 Manufacturing Overhead 2000 Balance, Jan. 31 9718 2338 9718