Question

The Carlberg Company has two manufacturing departments, assembly and painting. The assembly department started 10,000 units during November. The following production activity unit and cost information refers to the assembly department's November production activities. Assembly Department Beginning work in process Units transferred out Ending work in process Units 2,000 9,000 3,000 Percent of Direct Percent of Materials Added Conversion Added 60% 40% 100% 100% 80% 30% $1 (includes $996 for direct materials and $585 for conversion) Beginning work in process inventory-Assembly dept Costs added during the month: Direct materials Conversion $ 10,404 $ 12,285 Required: Prepare the November 30 journal entry to record the transfer of units (and costs) from the assembly department to the painting department. Use the FIFO method.

Answer 1

Solution

Transaction	General Journal	Debit	Credit
1	Work in process-painting department	$        20,607
	Work in process-assembly department		$        20,607
	(To redord transfer of goods from assembly to painting department)

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed	% completed this period
	Material	Conversion	Material	Conversion
Beginning WIP	2,000	60%	40%	40%	60%
Units introduced	10,000
Total units to be accounted for	12,000
Completed and Transferred unit	9,000	0%	0%	100%	100%
Ending WIP	3,000	0%	0%	80%	30%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material	Conversion
Units Transferred:	% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	2,000	40%	800	60%	1,200
From units started/Introduced	7,000	100%	7,000	100%	7,000
Total	9,000		7,800		8,200
	Total Units	Material	Conversion
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	3,000	80%	2,400	30%	900
Total EUP	12,000		10,200		9,100

.

STEP 3
Cost per Equivalent Units AND Cost to be accounted for
	Material	Conversion	TOTAL
Cost incurred in Current Period	$ 10,404	$ 12,285	$ 22,689
Total Equivalent Units	10,200	9,100
Cost per Equivalent Units	$ 1.02	$ 1.35	$ 2.37
Cost of Beginning WIP	$ 996	$ 585	$ 1,581
Total cost to be accounted for	$ 24,270

.

STEP 4
Cost report [Including Reconciliation]
	Cost of	Units Transferred	9,000.00	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Units Transferred	TOTAL
A	From Beginning WIP:
	Material	800	$ 1.02	$ 816
	Conversion	1,200	$ 1.35	$ 1,620	$ 2,436
B	From units started & completed
	Material	7,000	$ 1.02	$ 7,140
	Conversion	7,000	$ 1.35	$ 9,450	$ 16,590
C=A+B	Total				$ 19,026
D	Cost of Beginning WIP		$ 1,581
E=C+D	Total Cost of Units transferred		$             20,607.00