Question

Departments

Alcoa Inc. is the world's largest producer of aluminum products. One product that Alcoa manufactures is aluminum sheet products for the aerospace industry. The entire output of the Smelting Department is transferred to the Rolling Department. Part of the fully processed goods from the Rolling Department are sold as rolled sheet, and the remainder of the goods are transferred to the Converting Department for further processing into sheared sheet.

Prepare a chart of the flow of costs from the processing department accounts into the finished goods accounts and then into the cost of goods sold account. The relevant accounts are as follows:

Cost of Goods Sold Finished Goods—Rolled Sheet

Materials Finished Goods—Sheared Sheet

Factory Overhead—Smelting Department Work in Process—Smelting Department

Factory Overhead—Rolling Department Work in Process—Rolling Department

Factory Overhead—Converting Department Work in Process—Converting Department

Answer the following questions.

1. Materials flow to which department?

2. The costs from Factory Overhead-Converting Department flow to which department?

3. The costs from Work in process-Smelting Department flow to which department?

4. The costs from Finished Goods-Sheared Sheet flow to which account?

Check

Answer 1

Answer :

Materials Factory Overhead- Smelting Dept. Work in Process- Smelting Dept. Factory Overhead Rolling Dept. Work in Process- Rolling Dept. Finished Goods- Rolled Sheet Factory Overhead- Converting Dept. Work in Process- Converting Dept. Finished Goods- Sheared Sheet Cost of Goods Sold