Question

Problem:

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	120,000
Direct labor	79,500
Overhead	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:

a. Prepare the journal entries to record the raw materials used in production and the direct labor cost incurred.

b. Prepare the journal entry to record the overhead cost applied to production.

c. How many units were completed and transferred to finished goods during the period?

d. Compute the equivalent units of production for materials.

e. Compute the equivalent units of production for conversion.

f. What is the cost of beginning work in process inventory plus the cost added during the period for materials?

g. What is the cost of beginning work in process inventory plus the cost added during the period for conversion?

h. What is the cost per equivalent unit for materials?

i. What is the cost per equivalent unit for conversion?

j. What is the cost of ending work in process inventory for materials?

k. What is the cost of ending work in process inventory for conversion?

l. What is the cost of materials transferred to finished goods?

m. What is the amount of conversion cost transferred to finished goods?

n. Prepare the journal entry to record the transfer of costs from Work in Process to Finished Goods.

o. What is the total cost to be accounted for?

p. What is the total cost accounted for?

Answer 1

a)
Date	Account Titles and Explanation	Debit	Credit
1-Jun	Work in Process - Mixing	$ 120,000.00
	Raw Materials Inventory		$ 120,000.00
1-Jun	Work in Process—Mixing	$   79,500.00
	Wages Payable		$   79,500.00
b)	Account Titles and Explanation	Debit	Credit
	Work in Process—Mixing	$   97,000.00
	.          Manufacturing Overhead		$   97,000.00
c)
Work in process, June 1	5,000.00
Started into production during the month	37,500.00
Total pounds in process	42,500.00
Deduct:  work in process, June 30	8,000.00
Completed and transferred out during the month..	34,500.00
d) & e)
	Equivalent Units
	Material	Conversion
Units transferred out	34,500.00	34,500.00
Work in process, ending:	8,000.00
8,000 units × 100%
8,000 units × 40%		3,200.00
Equivalent units of production	42,500.00	37,700.00
f) & g)
	Material	Conversion
Cost of beginning work in process.	$                                                  16,000.00	$   12,000.00
Cost added during the period	$                                                120,000.00	$ 176,500.00
Total cost	$                                                136,000.00	$ 188,500.00
* $79,500 + $97,000 = $176,500
h) & i)
	Material	Conversion
Total cost (a)	$                                                136,000.00	$ 188,500.00
Equivalent units of production (b)	42,500.00	37,700.00
Cost per equivalent unit (a) ÷ (b)	$                                                           3.20	$            5.00
j) & k)
	Material	Conversion	Total
Equivalent units of production (a)	8,000.00	3,200.00
Cost per equivalent unit (b)	$                                                           3.20	$            5.00
Cost of ending work in process inventory (a) × (b)	$                                                  25,600.00	$   16,000.00	$   41,600.00
$41,600 is the June 30 balance in the Work in Process—Mixing Department T-account
l) & m)
	Material	Conversion	Total
Units transferred out (a)	34,500.00	34,500.00
Cost per equivalent unit (b)	$                                                           3.20	$            5.00
Cost of units transferred to finished goods (a) × (b)	$                                                110,400.00	$ 172,500.00	$ 282,900.00
n)
	Account Titles and Explanation	Debit	Credit
	Finished Goods	$ 282,900.00
	Work in Process—Mixing		$ 282,900.00
0)
Costs to be accounted for:
Cost of beginning work in process inventory	$                                                  28,000.00
Costs added to production during the period	$                                                296,500.00
Total cost to be accounted for	$                                                324,500.00
p)
Costs accounted for:
Cost of ending work in process inventory	$                                                  41,600.00
Cost of units completed and transferred out	$                                                282,900.00
Total cost accounted for	$                                                324,500.00