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., 800 units, 80% completed:
	Direct materials (800 x $4.6)	$ 3,680
	Conversion (800 x 80% x $1.9)	1,216
		$ 4,896
From Smelting Department, 18,480 units		$86,856
Direct labor		22,503
Factory overhead		12,117

During September, 800 units in process on September 1 were completed, and of the 18,480 units entering the department, all were completed except 1,900 units that were 30% completed. Charges to Work in Process—Rolling for October were as follows:

From Smelting Department, 21,300 units	$104,370
Direct labor	30,070
Factory overhead	16,193

During October, the units in process at the beginning of the month were completed, and of the 21,300 units entering the department, all were completed except 1,000 units that were 40% 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., 800 units, 80% completed
Sept. 30	Smelting Dept., 18,480 units at $4.7
Sept. 30	Direct labor
Sept. 30	Factory overhead
Sept. 30	Finished goods
Sept. 30	Bal., 1,900 units, 30% 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

1) Work in process:
					Balance
date	Item	post ref.	Debit	Credit	Debit	Credit
1-Sep	Bal. 800 units, 80% completed		4896		4896
30-Sep	Smelting Deptt. 18480 @4.7		86856		91752
30-Sep	Direct labor		22503		114255
30-Sep	Factory overhead		12117		126372
30-Sep	Finished goods			116302		116302
30-Sep	bal. 1900 units, 30% completed					10070

2)Cost of Production report-Rolling Deptt
	Whole Units	Equivalents units
		Dir. Mat.(a)	Conversion(a)	total
Units charged to Production:
Inventory in process sep 1	800
Received from Smelting deptt	18480
Total units accted for	19280
Units to be assigned costs:
Inventory in process sep 1	800	0	160
Started and completed in Sept	16580	16580	16580
Transferred to FG in sept	17380
Inventory in process sep 30	1900	1900	570
Total units to be assigned costs		18480	17310
Costs:
Cost per equivalent unit:
Total Costs for Sep in Rolling Deptt:		86856	34620
Total equivalent untis		18480	17310
Cost per equivalent unit(b)		4.7	2
Costs assigned to production:
Inv in process sept 1		3680	1216
costs incurrend in sept		86856	34620
Total Costs account for		90536	35836	126372
Costs allocated to completed & partially completed units:
Inv in process sept 1 bal ©		3680	1216	4896
to complete inventory in process		0	320	320
Cost of completed WIP				5216
Started and completed in Sept©		77926	33160	111086
Transferred to finished goods in Sept ©				116302
Inventory in process, sept 30(d)		8930	1140	10070
Total Costs assigned by the Rolling Deptt				126372