Question

Homework eBook Calculator 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., 1,200 units, 60% completed: Direct materials (1,200 x $7) $ 8,400 Conversion (1,200 x 60% x $2.9) 2,088 $ 10,488 From Smelting Department, 25,800 units $183,180 Direct labor 46,878 Factory overhead 25,242 During September, 1,200 units in process on September 1 were completed, and of the 25,800 units entering the department, all were completed except 2,800 units that were 20% completed. Charges to Work in Process Rolling for October were as follows: $216,810 From Smelting Department, 29,700 units Direct labor 63,710 Factory overhead 34,312 During October, the units in process at the beginning of the month were completed, and of the 29,700 units entering the department, all were completed except 1,600 units that were 80% 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 determinina (al equivalent units of production for materials and conversion. (b) costs per equivalent unit. (c) cost of coods finished.

Answer 1

Requirement a: Prepare the work-in-process account as follows

Account: Work-in-Process                                  Account No.
Date	Item	Post. Ref.	Debt	Credit	Balance
					Debt	Credit
Sept. 1	Bal., 1,200 units, 60% Completed				$10,488
Sept. 30	Smelting Dept., 25,800 units at 7.10		$183,180		$193,668
Sept. 30	Direct labor		$46,878		$240,546
Sept. 30	Factory overhead		$25,242		$265,788
Sept. 30	Finished goods			$244,228	$21,560
Sept. 30	Bal, 2,800, 20% Completed				$21,560

Prepare the production report of September as follows

PAC Inc
Rolling Department Cost of Production Report
For the Month Ended September 30
Units	Whole Units	Equivalent Units
		Direct Material	Conversion
Units charged to production:
Inventory in process, September 1	1,200
Received from Smelting Department	25,800
Total units accounted for	27,000
Units to be assigned costs:
Inventory in process, September 1 (1,200 × (1 − 60%))	1,200	0	480
Add: Started and Completed in September (25,800 − 2,800)	23,000	23,000	23,000
Transferred to finished goods in September	24,200	23,000	23,480
Inventory in process, September 30 (2,800 × 20%)	2,800	2,800	560
Total units to be assigned costs	27,000	25,800	24,040
Costs	Direct Material	Conversion	Total Costs
Total costs for September in Rolling Department	$183,180	$72,120
Total equivalent units	25,800	24,040
Cost per equivalent unit	$7.10	$3.00
Costs assigned to production:
Inventory in process, September 1 ($8,400 + $2,088)			$10,488
Costs incurred in September ($46,878 + $25,242 + $183,180)			$255,300
Total costs accounted for by the Rolling Department			$265,788
Costs allocated to completed and partially completed units:
Inventory in process, September 1 balance			$10,488
To complete inventory in process, September 1 ($3 × 480)	$0	$1,440	$1,440
Cost of completed September 1 work in process			$11,928
Started and completed in September (23,000 × $7.10) (23,000 × $3)	$163,300	$69,000	$232,300
Transferred to finished goods in September			$244,228
Inventory in process, September 30 (2,800 × $7.10) (560 × $3)	$19,880	$1,680	$21,560
Total costs assigned by the Rolling Department			$265,788

Requirement b: Prepare the work-in-process account as follows

Account: Work-in-Process                                  Account No.
Date	Item	Post. Ref.	Debt	Credit	Balance
					Debt	Credit
Oct. 1	Bal., 2,800 units, 20% Completed				$21,560
Oct. 31	Smelting Dept., 29,700 units		$216,810		$238,370
Oct. 31	Direct labor		$63,710		$302,080
Oct. 31	Factory overhead		$34,312		$336,392
Oct. 31	Finished goods			$320,744	$15,648
Oct. 31	Bal, 1,600, 80% Completed				$15,648

Prepare the production report of October as follows

PAC Inc
Rolling Department Cost of Production Report
For the Month Ended October 31
Units	Whole Units	Equivalent Units
		Direct Material	Conversion
Units charged to production:
Inventory in process, October 1	2,800
Add: Received from Smelting Department	29,700
Total units accounted for	32,500
Units to be assigned costs:
Inventory in process, October 1 (2,800 × (1 − 20%)	2,800	0	2,240
Add:Started and Completed in October (29,700 − 1,600)	28,100	28,100	28,100
Transferred to finished goods in October	30,900	28,100	30,340
Deduct: Inventory in process, October 31 (1,600 × 80%)	1,600	1,600	1,280
Total units to be assigned costs	32,500	29,700	31,620
Costs	Direct Material	Conversion	Total Costs
Total costs for September in Rolling Department	$216,810	$98,022
Total equivalent units	29,700	31,620
Cost per equivalent unit	$7.30	$3.10
Costs assigned to production:
Inventory in process, October 1 ($19,880 + $1,680)			$21,560
Costs incurred in September ($63,710 + $34,312 + $216,810)			$314,832
Total costs accounted for by the Rolling Department			$336,392
Costs allocated to completed and partially completed units:
Inventory in process, October 1 balance			$21,560
To complete inventory in process, October 1 ($3.10 × 2,240)	$0	$6,944	$6,944
Cost of completed October 1 work in process			$28,504
Started and completed in October (28,100 × $7.30) (28,100 × $3.10)	$205,130	$87,110	$292,240
Transferred to finished goods in October			$320,744
Inventory in process, October 31 (1,600 × $7.30) (1,280 × $3.10)	$11,680	$3,968	$15,648
Total costs assigned by the Rolling Department			$336,392