Hearty Soup Co. uses a process cost system to record the costs of processing soup, which...
Hearty Soup Co. uses a process cost system to record the costs of processing soup, which requires the cooking and filling processes. Materials are entered from the cooking process at the beginning of the filling process. The inventory of Work in Process-Filling on April 1 and debits to the account during April were as follows:
| Bal., 700 units, 30% completed: | |
| Direct materials (700 × $4.20) | $2,940 |
| Conversion (700 × 30% × $1.75) | 368 |
| $3,308 | |
| From Cooking Department, 7,500 units | $32,250 |
| Direct labor | 8,560 |
| Factory overhead | 2,542 |
During April, 700 units in process on April 1 were completed, and of the 7,500 units entering the department, all were completed except 600 units that were 90% completed.
Charges to Work in Process-Filling for May were as follows:
| From Cooking Department, 9,300 units | $41,850 |
| Direct labor | 12,032 |
| Factory overhead | 2,477 |
During May, the units in process at the beginning of the month were completed, and of the 9,300 units entering the department, all were completed except 450 units that were 35% completed.
| Required: | |||||||||||||||
| 1. |
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| 2. |
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| 3. | Comment on the change in costs per equivalent unit for March through May for direct materials and conversion costs. |
| 1(a). | Enter the balance as of April 1, in a four-column account for Work in Process-Filling. Record the debits and the credits in the account for April. |
| 2(a). | Provide the same information for May by recording the May transactions in the four-column work in process account. |
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Work in Process-Filling |
|
1 |
Date |
Item |
Debit |
Credit |
Balance Dr. |
Balance Cr. |
|
2 |
Apr. 1 |
Balance |
||||
|
3 |
30 |
Cooking Department |
||||
|
4 |
30 |
Direct labor |
||||
|
5 |
30 |
Factory overhead |
||||
|
6 |
30 |
Finished goods |
||||
|
7 |
30 |
Balance |
||||
|
8 |
May 31 |
Cooking Department |
||||
|
9 |
31 |
Direct labor |
||||
|
10 |
31 |
Factory overhead |
||||
|
11 |
31 |
Finished goods |
||||
|
12 |
31 |
Balance |
| 1(b). | Construct a cost of production report, and present computations
for determining
|
| HEARTY SOUP CO. | |||
| Cost of Production Report-Filling Department | |||
| For the Month Ended April 30 | |||
| UNITS | Whole Units | Equivalent Units | |
| Direct Materials | Conversion | ||
| Units to account for during production: | |||
| Inventory in process, April 1 | |||
| Received from Milling Department | |||
| Total units accounted for by the Filling Department | |||
| Units to be assigned costs: | |||
| Inventory in process, April 1 (30% completed) | |||
| Started and completed in April | |||
| Transferred to finished goods in April | |||
| Inventory in process, April 30 (90% completed) | |||
| Total units to be assigned costs | |||
| COSTS | Costs | ||
| Direct Materials | Conversion | Total | |
| Cost per equivalent unit: | |||
| Total production costs for April in Filling Department | |||
| Total equivalent units | ÷ | ÷ | |
| Cost per equivalent unit | |||
| Costs assigned to production: | |||
| Inventory in process, April 1 | |||
| Costs incurred in April | |||
| Total costs accounted for by the Filling Department | |||
| Cost allocated to completed and | |||
| partially completed units: | |||
| Inventory in process, April 1 balance | |||
| To complete inventory in process, April 1 | |||
| Cost of completed April 1 work in process | |||
| Started and completed in April | |||
| Transferred to finished goods in April | |||
| Inventory in process, April 30 | |||
| Total costs assigned by the Filling Department | |||
| 2(b). | Construct a cost of production report, and present computations
for determining
|
| HEARTY SOUP CO. | |||
| Cost of Production Report-Filling Department | |||
| For the Month Ended May 31 | |||
| UNITS | Whole Units | Equivalent Units | |
| Direct Materials | Conversion | ||
| Units charged to production: | |||
| Inventory in process, May 1 | |||
| Received from Milling Department | |||
| Total units accounted for by the Filling Department | |||
| Units to be assigned costs: | |||
| Inventory in process, May 1 (90% completed) | |||
| Started and completed in May | |||
| Transferred to finished goods in May | |||
| Inventory in process, May 31 (35% completed) | |||
| Total units to be assigned costs | |||
| COSTS | Costs | ||
| Direct Materials | Conversion | Total | |
| Cost per equivalent unit: | |||
| Total costs for May in Filling Department | |||
| Total equivalent units | ÷ | ÷ | |
| Cost per equivalent unit | |||
| Costs assigned to production: | |||
| Inventory in process, May 1 | |||
| Costs incurred in May | |||
| Total costs accounted for by the Filling Department | |||
| Costs allocated to completed and | |||
| partially completed units: | |||
| Inventory in process, May 1 balance | |||
| To complete inventory in process, May 1 | |||
| Cost of completed May 1 work in process | |||
| Started and completed in May | |||
| Transferred to finished goods in May | |||
| Inventory in process, May 31 | |||
| Total costs assigned by the Filling Department | |||
Homework Answers
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| Hearty Soup | |
| Workings | |
| Goods finished in April | |
| Inventory in Process April 1 | 700.00 |
| Add: Received from Cooking Department | 7,500.00 |
| Less: Inventory in Process April 30 | 600.00 |
| Goods finished in April | 7,600.00 |
| Started and completed in April | |
| Goods finished in April | 7,600.00 |
| Less: Opening work in process | 700.00 |
| Started and completed in April | 6,900.00 |
| For April 30 | Whole Units | Equivalent Units | |
| Units charged to production | Materials | Conversion | |
| Inventory in Process April 1 | 700.00 | ||
| Received from Cooking Dept. | 7,500.00 | ||
| Total units accounted for by the Filling Dept. | 8,200.00 | ||
| Units to be assigned costs: | |||
| Inventory in Process April 1 | 700.00 | - | 490.00 |
| Started and completed in April | 6,900.00 | 6,900.00 | 6,900.00 |
| Goods finished | 7,600.00 | 6,900.00 | 7,390.00 |
| Inventory in Process April 30 | 600.00 | 600.00 | 540.00 |
| Total units to be assigned costs: | 8,200.00 | 7,500.00 | 7,930.00 |
| Costs per equivalent unit | Materials | Conversion | Total |
| Total costs for the April in Filling Dept. | 32,250.00 | 11,102.00 | 43,352.00 |
| Total equivalent units | 7,500.00 | 7,930.00 | |
| Costs per equivalent unit | 4.30 | 1.40 | |
| Costs charged to production | |||
| Inventory in Process April 1 | 2,940.00 | ||
| Costs incurred in April | 43,352.00 | ||
| Total costs accounted for by Filling Dept. | 46,292.00 | ||
| Costs allocated to completed and partially completed units | |||
| Inventory in Process April 1 | 2,940.00 | ||
| To complete Inventory in Process April 1 | - | 686.00 | 686.00 |
| Started and completed in April | 29,670.00 | 9,660.00 | 39,330.00 |
| Transferred to Finished goods in April | 42,956.00 | ||
| Inventory in Process April 30 | 2,580.00 | 756.00 | 3,336.00 |
| Total costs assigned by Filling Dept. | 46,292.00 |
| Four column Work in Process- Filling Department | Balance | |||||
| Date | Item | Post Ref. | Debit $ | Credit $ | Debit $ | Credit $ |
| April 1. | Bal., 700 units, 30% completed | 2,940.00 | 2,940.00 | |||
| April 30. | Cooking Dept., 7,500 units at $ 4.30 | 32,250.00 | 35,190.00 | |||
| April 30. | Direct Labor | 8,560.00 | 43,750.00 | |||
| April 30. | Factory Overhead | 2,542.00 | 46,292.00 | |||
| April 30. | Finished Goods | 42,956.00 | 3,336.00 | |||
| April 30. | Bal., 600 units, 90% completed | 3,336.00 |
| Workings | |
| Goods finished in May | |
| Inventory in Process May 1 | 600.00 |
| Add: Received from Cooking Department | 9,300.00 |
| Less: Inventory in Process May 31 | 450.00 |
| Goods finished in May | 9,450.00 |
| Started and completed in May | |
| Goods finished in May | 9,450.00 |
| Less: Opening work in process | 600.00 |
| Started and completed in May | 8,850.00 |
| For May 31 | Whole Units | Equivalent Units | |
| Units charged to production | Materials | Conversion | |
| Inventory in Process May 1 | 600.00 | ||
| Received from Cooking Dept. | 9,300.00 | ||
| Total units accounted for by the Filling Dept. | 9,900.00 | ||
| Units to be assigned costs: | |||
| Inventory in Process May 1 | 600.00 | - | 60.00 |
| Started and completed in May | 8,850.00 | 8,850.00 | 8,850.00 |
| Goods finished | 9,450.00 | 8,850.00 | 8,910.00 |
| Inventory in Process May 31 | 450.00 | 450.00 | 157.50 |
| Total units to be assigned costs: | 9,900.00 | 9,300.00 | 9,067.50 |
| Costs per equivalent unit | Materials | Conversion | Total |
| Total costs for the May in Filling Dept. | 41,850.00 | 14,509.00 | 56,359.00 |
| Total equivalent units | 9,300.00 | 9,067.50 | |
| Costs per equivalent unit | 4.50 | 1.60 | |
| Costs charged to production | |||
| Inventory in Process May 1 | 3,336.00 |
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