Computing equivalent units and assigning costs to completed units and ending work in pro...

Computing equivalent units and assigning costs to completed units and ending work in process; no beginning inventory or cost transferred in [30—45 min]

Smith Paper Co., produces the paper used by wallpaper manufacturers. Smith’s four stage process includes mixing, cooking, rolling, and cutting. During August, the Mixing Department started and completed mixing for 4,405 rolls of paper. The department started but did not finish the mixing for an additional 600 rolls, which were 20% complete with respect to both direct materials and conversion work at the end of August, Direct materials and conversion costs are incurred evenly throughout the mixing process. The Mixing Department incurred the following costs during August:

Requirements

1. Draw a time line for the Mixing Department.

2. Use the rime line to help you compute the number of equivalent units and cost per equivalent unit in the Mixing Department for August.

3. Show that the sum of (a) cost of goods transferred out of the Mixing Department and (b) ending Work in process inventory-Mixing equals the total cost accumulated in the department during August.

4. Journalize all transactions affecting the company’s mixing process August, including those already posted.