Question

ACC 212 Challenge 3 Process Cost Accounting Foducts, Inc, makes sheets of owned in a three-step process that involves the following departments Oregon Wood Product s heets of plywood in a threes Forming. 2) Siring, and 3) Finishing In all three departments materials costs are adde added evenly throughout the process. departments materials costs are added at the beginning of the process and conversion costs are The following information applies to the Farmine Department at the beginning of May- Womer of sheets of lund card i namolote from the prior month Percent of completion of beginnine WIP inventory with respect to conversion costs The cost of direct materials costs in beginning Work in Process The cost of conversion beginning Work in Process: $9.140 33,200 The following information relates to the transactions that occurred in the Forming Department during May Additional direct materials costs incurred in May $157,140 Additional direct labor costs incurred in May - $77,194 Additional factory overhead costs applied in May - $18,042 The following information applies to the Forming Department at the end of May: Sheets of plywood completed and transferred out during May Number of sheets of plywood in progress on May 31st: Percent of completion of ending WIP inventory with respect to conversion costs: pquired: Complete the attached Process Cost Summary 2. Prepare and post the following journal entries (including explanations): May 31 Record the costs transferred into the forming Department during May. May 31 Record the costs transferred out of the Forming Department during May. General Journal Date Description Debit Credit Work in Process - Forming 16,465 5/1

Answer 1

1) Process Cost Summary:
STEP 1:
Costs charged to Production:
Costs of Beginning WIP
DM COSTS	9140
CONV. COSTS	7325	16465
Costs incurrend during May:
DM COSTS	157140
CONV. COSTS	95236	252376
total Costs to account for		268841
STEP 2:
Units information:			units accounted for:
Units to account for:			Transferred out	33200
Begin WIP units	1600		Ending WIP	800
Units started in May	32400
Total units to account for	34000		Total units accounted for	34000
Equivalent units of production:
	DM	CONV.
Equi. Unit to complete begin WIP
Direct Materials units	0
Conversion units		640
Eq. units started and completed	31600	31600
Eq. units in ending WIP
Direct Materials units	800
Conversion units		600
Equivalent units of production:	32400	32840
Cost per equivalent unit of production:
Costs incurred during May	157140	95236
Equivalent units of production	32400	32840
Cost per equivalent unit	4.85	2.9
STEP3:
Cost assignment and reconciliation :
Cost of Units transferred out:
Costs of Begin WIP	16465
Costs added to complete:
DM costs	0
Conv. Costs	1856
Total finished cost of Begin WIP	18321
Cost of Started and completed:
DM costs	153260
Conv. Costs	91640
Total cost of units finished & transferred out	263221
Cost of Ending WIP:
DM costs	3880
Conv. Costs	1740
Total cost of ending WIP	5620
Total costs accounted for	268841

2) Journal Entries:
Date	Accounts Title	Debit $	Credit $
31-May	WIP - Forming Deptt.	252376
	Material		157140
	Payroll		77194
	Overhead		18042
	(input applied to Work in Process - Forming Deptt.)
31-May	WIP - Sizing Deptt.	263221
	WIP - Forming Deptt.		263221
	(semi-finished goods transferred to Sizing Deptt.)
WIP - Forming Deptt.
DEBIT	AMOUNT $	CREDIT	AMOUNT $
1-May	16465	WIP-Sizing Deptt	263221
Mat.	157140	31-May	5620
Payroll	77194
Overhead	18042
Total	268841	Total	268841
3)
A:	5620
B:	Material percentage	0
	Conversion percentage	25%
C:	263221/33200	7.93