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 $5.5)	$ 5,500
	Conversion (1,000 x 20% x $2.3)	460
		$ 5,960
From Smelting Department, 22,800 units		$127,680
Direct labor		35,568
Factory overhead		19,152

During September, 1,000 units in process on September 1 were completed, and of the 22,800 units entering the department, all were completed except 2,000 units that were 60% completed. Charges to Work in Process—Rolling for October were as follows:

From Smelting Department, 26,200 units	$151,960
Direct labor	44,960
Factory overhead	24,215

During October, the units in process at the beginning of the month were completed, and of the 26,200 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.

ACCOUNT	Work in Process-Rolling Department				ACCOUNT NO.
					BALANCE
DATE	ITEM	POST. REF.	DEBIT	CREDIT	DEBIT	CREDIT
Sept. 1	Bal., 1,000 units, 20% completed
Sept. 30	Smelting Dept., 22,800 units at $5.6
Sept. 30	Direct labor
Sept. 30	Factory overhead
Sept. 30	Finished goods
Sept. 30	Bal., 2,000 units, 60% 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 September 30
	Whole Units	Equivalent Units
Units		Direct Materials (a)	Conversion (a)
Units charged to production:
Inventory in process, September 1
Received from Smelting Department
Total units accounted for by the Rolling Department
Units to be assigned costs:
Inventory in process, September 1
Started and completed in September
Transferred to finished goods in September
Inventory in process, September 30
Total units to be assigned costs

	Costs
Costs		Direct Materials				Conversion				Total Costs
Cost per equivalent unit:
Total costs for September in Rolling Department		$				$
Total equivalent units
Cost per equivalent unit (b)		$				$
Costs assigned to production:
Inventory in process, September 1										$
Costs incurred in September
Total costs accounted for by the Rolling Department										$
Costs allocated to completed and partially completed units:
Inventory in process, September 1 balance (c)										$
To complete inventory in process, September 1 (c)		$				$
Cost of completed September 1 work in process										$
Started and completed in September (c)		$
Transferred to finished goods in September (c)										$
Inventory in process, September 30 (d)
Total costs assigned by the Rolling Department										$

Answer 1

Part 1)

The completed tables are provided as follows:

ACCOUNT	Work in Process-Rolling Department				ACCOUNT NO.
					BALANCE
DATE	ITEM	POST. REF.	DEBIT	CREDIT	DEBIT	CREDIT
Sept. 1	Bal., 1,000 units, 20% completed				5,960
Sept. 30	Smelting Dept., 22,800 units at $5.6		127,680		133,640
Sept. 30	Direct labor		35,568		169,208
Sept. 30	Factory overhead		19,152		188,360
Sept. 30	Finished goods (refer to cost of production report)			174,280	14,080
Sept. 30	Bal., 2,000 units, 60% completed				14,080

______

Pittsburgh Aluminum Company
Cost of Production Report-Rolling Department
For the Month Ended September 30
	Whole Units	Equivalent Units
Units		Direct Materials (a)	Conversion (a)
Units charged to production:
Inventory in process, September 1	1,000
Received from Smelting Department	22,800
Total units accounted for by the Rolling Department	23,800
Units to be assigned costs:
Inventory in process, September 1	1,000	0	800 (1,000*80%)
Started and completed in September (22,800-2,000)	20,800	20,800	20,800
Transferred to finished goods in September	21,800	20,800	21,600
Inventory in process, September 30	2,000	2,000	1,200 (2,000*60%)
Total units to be assigned costs	23,800	22,800	22,800

Costs	Direct Materials	Conversion	Total Costs
Cost per equivalent unit:
Total costs for September in Rolling Department	$127,680	$54,720
Total equivalent units	22,800	22,800
Cost per equivalent unit (b)	$5.60	$2.40
Costs assigned to production:
Inventory in process, September 1			$5,960
Costs incurred in September (127,680+35,568+19,152)			182,400
Total costs accounted for by the Rolling Department			$188,360
Costs allocated to completed and partially completed units:
Inventory in process, September 1 balance (c)			$5,960
To complete inventory in process, September 1 (c)	$0 (0*5.60)	$1,920 (800*2.40)	1,920
Cost of completed September 1 work in process			$7,880
Started and completed in September (c)	$116,480 (20,800*5.60)	$49,920 (20,800*2.40)	166,400
Transferred to finished goods in September (c)			$174,280
Inventory in process, September 30 (d)	$11,200 (2,000*5.60)	$2,880 (1,200*2.40)	14,080
Total costs assigned by the Rolling Department			$188,360