Question

Fast Co produces its product through two processing departments. Direct materials are added at the start of production in the Cutting department, and conversion costs are added evenly throughout each process. The company uses monthly reporting periods for its weighted average process costing system. The Work in Process Inventory Cutting account has a balance of $86,300 as of October 1 which consists of $17,700 of direct materials and $68,600 of conversion costs. During the month, the Cutting department incurred the following costs: Bock Direct materials Conversion $146,650 842,920 At the beginning of the month, 31.000 units were in process. During October, the company started 142,000 units and transferred 152,000 units to the Assembly department. At the end of the month, the Cutting department's work in process inventory consisted of 21,000 units that were 80% complete with respect to conversion costs. Required: 1. Prepare the Cutting department's process cost summary for October using the weighted average method. 2. Prepare the journal entry dated October 31 to transfer the cost of the partially completed units to Assembly

Answer 1

1.

Total costs to account for:
Costs of beginning work in process	86300
Costs incurred this period	989570
Total costs to account for:	1075870
Total costs accounted for	1075870
Difference due to rounding cost/unit	0
Unit reconciliation:
Units to account for:
Beginning work in process - units	31000
Units started this period	142000
Total units to account for	173000
Total units accounted for:
Units completed and transferred out	152000
Ending work in process - units	21000
Total units accounted for	173000
Equivalent units of production (EUP) - weighted average method
	Units	% Materials	EUP-Materials	% Conversion	EUP-Conversion
Units completed and transferred out	152000	100%	152000	100%	152000
Ending work in process - units	21000	100%	21000	80%	16800
Total units			173000		168800
Cost per equivalent unit of production			Materials		Conversion
Cost of beginning work in process			17700		68600
Costs incurred this period			146650		842920
Total costs		Costs	164350	Costs	911520
÷ Equivalent units of production		EUP	173000	EUP	168800
Cost per equivalent unit of production			0.95		5.40
Total costs accounted for:
Cost of units transferred out:	EUP	Cost per EUP	Total cost
Direct materials	152000	0.95	144400
Conversion	152000	5.40	820800
Total costs transferred out				965200
Costs of ending work in process	EUP	Cost per EUP	Total cost
Direct materials	21000	0.95	19950
Conversion	16800	5.40	90720
Total cost of ending work in process				110670
Total costs accounted for				1075870

2.

Date	Account Title and Explanation	Debit	Credit
Oct-31	Work in process inventory-Assembly	965200
	Work in process inventory-Cutting		965200
	(To record cost of units transferred to Assembly department)