Question

The Foundational 15 - Chapter 4 - ACC 202 LO4-1, L04-2, LO4-3, L04-4, L04-5 Clopack Company manufactures one product that goes through one processing department called Mixing. All raw materials are introduced at the start of work in the Mixing Department. The company uses the weighted average method of process costing. Its Work in Process T-account for the Mixing Department for June follows (all forthcoming questions pertain to June): Work in Process-Mixing Department June 1 balance 28,000 Completed and transferred to Finished Goods Materials Direct labor Overhead 120,000 79,500 97,000 June 30 balance The June 1 work in process inventory consisted of 5,000 units with $16,000 in materials cost and $12,000 in conversion cost. The June 1 work in process inventory was 100% complete with respect to materials and 50% complete with respect to conversion. During June, 37,500 units were started into production. The June 30 work in process inventory consisted of 8,000 units that were 100% complete with respect to materials and 40% complete with respect to conversion Required: 1. Prepare the journal entries to record the raw materials used in production and the direct labor cost incurred. 2. Prepare the journal entry to record the overhead cost applied to production 3. How many units were completed and transferred to finished goods during the period? 4. Compute the equivalent units of production for materials. 5. Compute the equivalent units of production for conversion 6. What is the cost of beginning work in process inventory plus the cost added during the period for materials? 7. What is the cost of beginning work in process inventory plus the cost added during the period for conversion? 8. What is the cost per equivalent unit for materials? 9. What is the cost per equivalent unit for conversion? 10. What is the cost of ending work in process inventory for materials? 11. What is the cost of ending work in process inventory for conversion? 12. What is the cost of materials transferred to finished goods? 13. What is the amount of conversion cost transferred to finished goods? 14. Prepare the journal entry to record the transfer of costs from Work in Process to Finished Goods. 15. What is the total cost to be accounted for? What is the total cost accounted for?

Answer 1

Answer-1:

$ 120,000 Work in process - Mixing Raw material inventory $ 120,000 $ 79,500 Work in process - Mixing Wages payable $ 79,500

Answer-2:

$ 97,000 Work in process - Mixing Manufacturing overhead $ 97,000

Answer-3:

$ Work in process June 1 Units started during June Total units Less: Work in process June 30 Units completed and transferred to Finished goods 5,000 37,500 42,500 8,000 34,500 $

Answer-4:

Started and completed Units in ending WIP Total Equivalent units Equivalents Units of Production (EUP) Units % Materials EUP-material 34,500 100% 34,500 8,000 100% 8,000 42,500 42,500

Answer-5:

Equivalents Units of Production (EUP) Units Started and completed 34,500 Units in ending WIP 8,000 Total Equivalent units 42,500 % conversion EUP-conversion 100% 34,500 40% 3,200 37,700

Answer-6:

$ 16,000 Cost of beginning work in process Cost added during the month: Direct material Cost of beginning work in process inventory plus cost added during the period for material 120,000 $ 136,000

Answer-7:

$ 12,000 Cost of beginning work in process Cost added during the month: Direct labour Overhead Cost of beginning work in process inventory plus cost added during the period for material 79,500 97,000 $ 188,500

Answer-8:

Cost per equivalent unit of materials = $136,000 / 42,500 = $3.20

Answer-9:

Cost per equivalent unit of conversion = $188,500 / 37,700 = $5.00

Answer-10:

Cost of ending work in process inventory for materials = 8,000 × $3.20 = $25,600

Answer-11:

Cost of ending work in process inventory for conversion = 3,200 × $5.00 = $16,000