Question

Calculator Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. Work in process at the beginning of the period for Department 1 was $75,000, and work in process at the end of the period totaled $60,000. The records indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $50,000 $60,000, and $70,000, respectively. In addition, work in process at the beginning of the period for Department 2 totaled $75.000, and work In process at the end of the period totaled $60,000. The journal entry to record the flow of costs into Department 3 during the period Work in Process-Department 3 555,000 Work in Process-Department 2 555,000 570,000 6. Work in Process-Departments Work in Process-Department 2 570,000 O 165,000 Work in Process-Department 3 Work in Process-Department 2 165,000 d. Work in Process-Department 3 585,000 585,000 Work in Process Department 2 Previous Neo Submit Test for Grading All work saved

Answer 1

Answer :-

Question 1-

The Correct Answer is Option D -

Work in Progress - Department 3 $585,000

​​​​​​.​​​​​​ Work in Progress - Department 2 $585,000

Explanation :-

Cost of Goods sold transferred to Department 2 = Direct Materials + Direct Labor + Factory overhead + Beginning Work in Progress - Ending Work in Progress

Cost of goods sold transferred to Department 2 = $100,000 +125,000 + $150,000 + $75,000 - $60,000

Cost of goods sold transferred to Department 2 = $390,000

Now we calculate the cost of goods sold transferred to Department 3

Cost of goods sold transferred to Department 3 = Direct Materials + Direct Labor + Factory overhead + Beginning Work in Progress - Ending Work in Progress + Cost of goods sold transferred from Department 1

Cost of goods sold transferred to Department 3 = $50,000 +$60,000 +$70,000 + $75,000 - $60,000 + $390,000

Cost of goods sold transferred to Department 3 = $585,000

Question 2 -

The Correct Answer is Option D - $3.03

Explanation :-

Conversion costs per equivalent unit = Total Conversion costs / Equivalent unit for conversion

Total Conversion Costs = Conversion costs during april

Total Conversion costs = $33,915

Equivalent units for conversion =(Beginning Work in Progress units (1- completed %)) + ( Finished goods Units - Beginning Work in Progress units) + (Ending Work in Progress unit × Percent Completed)

Equivalent units for Conversion = (3,000 (1 - 40%)) +(12,000 - 3,000)+ ( 1,000 × 40%)

Equivalent units for Conversion = 1,800 + 9,000 + 400

Equivalent units for Conversion = 11,200 units

Total Conversion costs = $33,915 /11,200

Total Conversion costs = $3.03

Question 3 -

The Correct Answer is Option -

Work in Progress - Department 3 $555,000

​​​​​​.​​​​​​ Work in Progress - Department 2 $555,000

Explanation :-

It was given that Department 2 has transferred in cost of $390,000 so we do not need to find out Department 1 cost of goods sold transferred to Department 2

Now we calculate the cost of goods sold transferred to Department 3

Cost of goods sold transferred to Department 3 = Direct Materials + Direct Labor + Factory overhead + Beginning Work in Progress - Ending Work in Progress + Cost of goods sold transferred from Department 1

Cost of goods sold transferred to Department 3 = $50,000 +$60,000 +$70,000 + $75,000 - $90,000 + $390,000

Cost of goods sold transferred to Department 3 = $555,000

Question 2 -

The Correct Answer is Option D - $2.75

Explanation :-

Conversion costs per equivalent unit = Total Conversion costs / Equivalent unit for conversion

Total Conversion Costs = Conversion costs during april

Total Conversion costs = $30, 800

Equivalent units for conversion =(Beginning Work in Progress units (1- completed %)) + ( Finished goods Units - Beginning Work in Progress units) + (Ending Work in Progress unit × Percent Completed)

Equivalent units for Conversion = (3,000 (1 - 40%)) +(12,000 - 3,000)+ ( 1,000 × 40%)

Equivalent units for Conversion = 1,800 + 9,000 + 400

Equivalent units for Conversion = 11,200 units

Total Conversion costs = $30,800/11,200

Total Conversion costs = $2.75