Question

Pittsburgh Aluminum Company uses a process cost system to record the costs of manufacturing rolled aluminum, which consists of the smelting and rolling processes. Materials are entered from smelting at the beginning of the rolling process. The inventory of Work in Process—Rolling on September 1 and debits to the account during September were as follows:

Bal., 800 units, 30% completed:
	Direct materials (800 x $ 3.8)	$ 3,040
	Conversion (800 x 30% x $1.6)	384
		$ 3,424
From Smelting Department, 18,400 units		$71,760
Direct labor		20,752
Factory overhead		11,174

During September, 800 units in process on September 1 were completed, and of the 18,400 units entering the department, all were completed except 1,800 units that were 90% completed. Charges to Work in Process—Rolling for October were as follows:

From Smelting Department, 21,200 units	$86,920
Direct labor	24,550
Factory overhead	13,214

During October, the units in process at the beginning of the month were completed, and of the 21,200 units entering the department, all were completed except 1,000 units that were 60% completed.

Required:

1. Enter the balance as of September 1 in a four-column account for Work in Process— Rolling. Record the debits and the credits in the account for September. Construct a cost of production report and present computations for determining (a) equivalent units of production for materials and conversion, (b) costs per equivalent unit, (c) cost of goods finished, differentiating between units started in the prior period and units started and finished in September, and (d) work in process inventory. If an amount box does not require an entry, leave it blank.

Requiret eau salent units of production for malsrids and canmarsion, th) costs per euivant unt, (c) cost of goods Srished, d eretising tetwesn units started in the priar period and units arted and fnished in Seber, ard (41 work in preovss inventors ishef goeds

ACCOUNT	Work in Process-Rolling Department				ACCOUNT NO.
					BALANCE
DATE	ITEM	POST. REF.	DEBIT	CREDIT	DEBIT	CREDIT
Sept. 1	Bal., 800 units, 30% completed
Sept. 30	Smelting Dept., 18,400 units at $3.9
Sept. 30	Direct labor
Sept. 30	Factory overhead
Sept. 30	Finished goods
Sept. 30	Bal., 1,800 units, 90% completed

If an amount is zero, enter in a zero "0". Round cost per unit answers to the nearest cent.

Pittsburgh Aluminum Company Cost of Production Report-Rolling Department For the Month Ended September 30
	Whole Units	Equivalent Units
Units		Direct Materials (a)	Conversion (a)
Units charged to production:
Inventory in process, September 1
Received from Smelting Department
Total units accounted for by the Rolling Department
Units to be assigned costs:
Inventory in process, September 1
Started and completed in September
Transferred to finished goods in September
Inventory in process, September 30
Total units to be assigned costs

	Costs
Costs		Direct Materials				Conversion				Total Costs
Costs per equivalent unit:
Total costs for September in Rolling Department		$				$
Total equivalent units
Cost per equivalent unit (b)		$				$
Costs charged to production:
Inventory in process, September 1										$
Costs incurred in September
Total costs accounted for by the Rolling Department										$
Cost allocated to completed and partially completed units:
Inventory in process, September 1 balance (c)										$
To complete inventory in process, September 1 (c)		$				$
Cost of completed September 1 work in process										$
Started and completed in September (c)		$
Transferred to finished goods in September (c)										$
Inventory in process, September 30 (d)
Total costs assigned by the Rolling Department										$

2. Provide the same information for October by recording the October transactions in the four-column work in process account. Construct a cost of production report, and present the October computations (a through d) listed in part (1). If an amount box does not require an entry, leave it blank.

ACCOUNT	Work in Process-Rolling Department				ACCOUNT NO.
					Balance
DATE	ITEM	POST. REF.	DEBIT	CREDIT	DEBIT	CREDIT
October 1	Balance
October 31	Smelting Dept., 21,200 units at $4.1
October 31	Direct labor
October 31	Factory overhead
October 31	Finished goods
October 31	Bal., 1,000 units, 60% completed

If an amount is zero, enter in a zero "0". Round cost per unit answers to the nearest cent.

Pittsburgh Aluminum Company Cost of Production Report-Rolling Department For the Month Ended October 31
	Whole Units	Equivalent Units
Units		Direct Materials (a)	Conversion (a)
Units charged to production:
Inventory in process, October 1
Received from Smelting Department
Total units accounted for by the Rolling Department
Units to be assigned costs:
Inventory in process, October 1
Started and completed in October
Transferred to finished goods in October
Inventory in process, October 31
Total units to be assigned costs

	Costs
Costs		Direct Materials				Conversion				Total Costs
Costs per equivalent unit:
Total costs for October in Rolling Department		$				$
Total equivalent units
Cost per equivalent unit (b)		$				$
Costs charged to production:
Inventory in process, October 1										$
Costs incurred in October
Total costs accounted for by the Rolling Department										$
Cost allocated to completed and partially completed units:
Inventory in process, October 1 balance (c)										$
To complete inventory in process, October 1 (c)		$				$
Cost of completed October 1 work in process										$
Started and completed in October (c)
Transferred to finished goods in October (c)										$
Inventory in process, October 31 (d)
Total costs assigned by the Rolling Department										$

Answer 1

ACCOUNT	Work in Process-Rolling Department				ACCOUNT NO.
					BALANCE
DATE	ITEM	POST. REF.	DEBIT	CREDIT	DEBIT	CREDIT
Sept. 1	Bal., 800 units, 30% completed		3424		3424
Sept. 30	Smelting Dept., 18,400 units at $3.9		71760		75184
Sept. 30	Direct labor		20752		95936
Sept. 30	Factory overhead		11174		107110
Sept. 30	Finished goods			97336	9774
Sept. 30	Bal., 1,800 units, 90% completed			9774

Pittsburgh Aluminum Company
Cost of Production Report-Rolling Department
For the Month Ended September 30
	Whole Units	Equivalent Units
Units		Direct Materials (a)	Conversion (a)
Units charged to production:
Inventory in process, September 1	800
Received from Smelting Department	18400
Total units accounted for by the Rolling Dept.	19200
Units to be assigned costs:
Inventory in process, September 1	800	0	560
Started and completed in September	16600	16600	16600
Transferred to finished goods in September	17400	16600	17160
Inventory in process, September 30	1800	1800	1620
Total units to be assigned costs	19200	18400	18780

Costs
Costs	Direct Materials	Conversion	Total Costs
Costs per equivalent unit:
Total costs for September in Rolling Department	71760	31926	103686
Total equivalent units	18400	18780
Cost per equivalent unit (b)	3.9	1.7	5.6
Costs charged to production:
Inventory in process, September 1	3040	384	3424
Costs incurred in September	71760	31926	103686
Total costs accounted for by the Rolling Department	74800	32310	107110
Cost allocated to completed and partially completed units:
Inventory in process, September 1 balance (c)	3040	384	3424
To complete inventory in process, September 1 (c)	0	952	952
Cost of completed September 1 work in process	3040	1336	4376
Started and completed in September (c)	64740	28220	92960
Transferred to finished goods in September (c)	67780	29556	97336
Inventory in process, September 30 (d)	7020	2754	9774
Total costs assigned by the Rolling Department	74800	32310	107110

ACCOUNT	Work in Process-Rolling Department				ACCOUNT NO.
					Balance
DATE	ITEM	POST. REF.	DEBIT	CREDIT	DEBIT	CREDIT
1-Oct	Balance 1800 units.90% completed		9774		9774
31-Oct	Smelting Dept., 21,200 units at $4.1		86920		96694
31-Oct	Direct labor		24550		121244
31-Oct	Factory overhead		13214		134458
31-Oct	Finished goods			129278	5180
31-Oct	Bal., 1,000 units, 60% completed			5180

Pittsburgh Aluminum Company
Cost of Production Report-Rolling Department
For the Month Ended October 31
	Whole Units	Equivalent Units
Units		Direct Materials (a)	Conversion (a)
Units charged to production:
Inventory in process, October 1	1800
Received from Smelting Department	21200
Total units accounted for by the Rolling Dept.	23000
Units to be assigned costs:
Inventory in process, October 1	1800	0	180
Started and completed in October	20200	20200	20200
Transferred to finished goods in October	22000	20200	20380
Inventory in process, October 30	1000	1000	600
Total units to be assigned costs	23000	21200	20980

Costs
Costs	Direct Materials	Conversion	Total Costs
Costs per equivalent unit:
Total costs for September in Rolling Department	86920	37764	124684
Total equivalent units	21200	20980
Cost per equivalent unit (b)	4.1	1.8	5.9
Costs charged to production:
Inventory in process, October 1	7020	2754	9774
Costs incurred in October	86920	37764	124684
Total costs accounted for by the Rolling Department	93940	40518	134458
Cost allocated to completed and partially completed units:
Inventory in process, October 1 balance (c)	7020	2754	9774
To complete inventory in process,October 1 (c)	0	324	324
Cost of completed October 1 work in process	7020	3078	10098
Started and completed in October (c)	82820	36360	119180
Transferred to finished goods in October (c)	89840	39438	129278
Inventory in process, October 30 (d)	4100	1080	5180
Total costs assigned by the Rolling Department	93940	40518	134458