Question

Healhy Sat Bakery mass-produces bread using three sequental processing departments Miking Baking and Packaging The folowing transactions ocoumed during Apri B(Click the icon to view the transactions 1. Post each of these transactions to the company's inventory T-acoounts Delemine the balance at month-end in each of the inventory accounts 3. Assume Phat 3,075,000 loaves of bead were completed and tanaferred out of the Packaging Deperment ouring te morth What was the cost per unit of making each loaf of bread (hom start to i 3 Direct labor incured in the Mxing Departmert 4 Beginning balance: Work in Process Inventory -Baking 5 Manufactured overhoad alocated to the Baking Deparment $ Deginning balance Finished Goods 7. Costs ansigned to unts compieted and tansemed out of Baking 8. Beginning balance: Work in Process inventory Ming Dret or incumed in the Packaging Department 10 Manufacturing ovechead locaed to the Mixing Depantment 11. Direct materials used in the Mixing Department 12. Beginning bnw Materials nventory WIPBaking Dept WIPBaking Dept Fnished Goods Inventory Frished Goods Raw Materials Inventory WIP-Baking Dept WP Moing Dept

Just Need Help Finishing 7-12

Answer 1

Hi there.

You have asked for answers to parts 7-12. The answers from among the options in the drop down list are:-

7. The costs are for the units completed and transferred out of baking department. The units will then reach the packaging department. The costs are incurred in between the two processes of baking and packaging. Normally, these indirect costs should be properly allocated between departments based on various allocation methods like cost average method. As I can also see in screenshot, there is an option to mention two departments. So the answer should be :

WIP-Baking Dept.       and          WIP-Packaging Dept.

If only one option can be chosen, then the cost should be allocated to WIP-Packaging Dept. This is because the statement states that the units have been completed and transferred out of baking. So the role of baking department is complete. It will not take any costs which are incurred after the units have been transferred from it to next department.

8. Beginning balance of Work-in-Progress Inventory in Mixing department should be allocated to WIP-Mixing Dept.

This is because the opening inventory of the Mixing department is the cost which it has incurred previously and should be allocated to the units which will be completed and transferred out of Mixing department.

9. Direct labour cost incurred in the packaging department should be allocated to WIP-Packaging Dept.

This is because this is the direct labour cost and should be only allocated to the department where it is incurred.

10. Manufacturing overhead allocated to the Mixing department should be allocated to WIP- Mixing Dept.

This is because the overhead has been allocated to Mixing department and should be added to the costs of this department only.

11. Direct material used in the Mixing department should be allocated to WIP-Mixing Dept.

This is because the direct materials have been used in the Mixing department and should be allocated to this department only.

12. Beginning balance of Raw Material inventory should be allocated to Raw Material Inventory.

This is because the inventory is of the raw material which has still not been allocated to any department. So it should be presented as a separate item.