Compute the cost of products transferred from production to finished goods

Problem 20-1A Production cost flow and measurement; journal entries L.O. P1, P2, P3, P4

[The following information applies to the questions displayed below.]

Edison Company manufactures wool blankets and accounts for product costs using process costing. The following information is available regarding its May inventories.

 

  Beginning Inventory   Ending Inventory  
  Raw materials inventory $ 60,000   $ 41,000  
  Goods in process inventory   449,000     521,500  
  Finished goods inventory   610,000     342,001  

 

The following additional information describes the company’s production activities for May.

 

       
  Raw materials purchases (on credit) $ 250,000  
  Factory payroll cost (paid in cash)   1,850,300  
  Other overhead cost (Other Accounts credited)   82,000  
  Materials used      
       Direct $ 200,500  
       Indirect   50,000  
  Labor used      
       Direct $ 1,060,300  
       Indirect   790,000  
  Overhead rate as a percent of direct labor   115 %
  Sales (on credit) $ 3,000,000  

 

The predetermined overhead rate was computed at the beginning of the year as 115% of direct labor cost.

 

\\\\\ rev: 11_02_2011

references

1.

value: 2.00 points

 

 

Problem 20-1A Part 1

Required:
1(a) Compute the cost of products transferred from production to finished goods. (Omit the “$” sign in your response.)

 

  Cost of products transferred $

 

1(b) Compute the cost of goods sold. (Omit the “$” sign in your response.)

 

  Cost of goods sold $

rev: 10_31_2011

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2.

value: 5.00 points

 

 

Problem 20-1A Part 2

2(a) Prepare journal entry dated May 31 to record the raw materials purchases. (Omit the “$” sign in your response.)

 

Date General Journal Debit Credit
May 31      
       

 

2(b) Prepare journal entry dated May 31 to record the direct materials usage. (Omit the “$” sign in your response.)

 

Date General Journal Debit Credit
May 31      
       

 

2(c) Prepare journal entry dated May 31 to record the indirect materials usage. (Omit the “$” sign in your response.)

 

Date General Journal Debit Credit
May 31      
       

 

2(d) Prepare journal entry dated May 31 to record the payroll costs. (Omit the “$” sign in your response.)

 

Date General Journal Debit Credit
May 31      
       

 

2(e) Prepare journal entry dated May 31 to record the direct labor costs. (Omit the “$” sign in your response.)

 

Date General Journal Debit Credit
May 31      
       

 

2(f) Prepare journal entry dated May 31 to record the indirect labor costs. (Omit the “$” sign in your response.)

 

Date General Journal Debit Credit
May 31      
       

 

2(g) Prepare journal entry dated May 31 to record the other overhead costs. (Omit the “$” sign in your response.)

 

Date General Journal Debit Credit
May 31      
       

 

2(h) Prepare journal entry dated May 31 to record the overhead applied. (Omit the “$” sign in your response.)

 

Date General Journal Debit Credit
May 31      
       

 

2(i) Prepare journal entry dated May 31 to record the goods transferred from production to finished goods.(Omit the “$” sign in your response.)

 

Date General Journal Debit Credit
May 31      
       

 

2(j) Prepare journal entry dated May 31 to record the sale of finished goods. (Omit the “$” sign in your response.)

 

Date General Journal Debit Credit
May 31      
       
       
       
   
Fairfax Company uses weighted-average process costing to account for its production costs. Direct labor is added evenly throughout the process. Direct materials are added at the beginning of the process. During September, the company transferred 760,000 units of product to finished goods. At the end of September, the goods in process inventory consists of 203,000 units that are 90% complete with respect to labor. Beginning inventory had $438,165 of direct materials and $188,540 of direct labor cost. The direct labor cost added in September is $3,582,260, and the direct materials cost added is $2,932,335.

references

3.

value: 2.00 points

 

 

Problem 20-2A Part 1

Required:
1(a) Determine the equivalent units of production with respect to direct labor.

 

  Equivalent units  

 

1(b) Determine the equivalent units of production with respect to direct materials.

 

  Equivalent units  

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4.

value: 2.00 points

 

 

Problem 20-2A Part 2

2. Compute both the direct labor cost and the direct materials cost per equivalent unit. (Round your answers to 2 decimal place. Omit the “$” sign in your response.)

 

  Per equivalent unit
  Direct labor cost $
  Direct materials cost $

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5.

value: 2.00 points

 

 

Problem 20-2A Part 3

3(a) Compute both direct labor cost and direct materials cost assigned to units completed and transferred out. (Due to rounding of cost per unit, the total costs accounted for in the cost summary may not equal to sum of all the costs given in the problem. Round your per unit costs to 2 decimal places and final answers to the nearest dollar amount.)

   

  Cost transferred out
  Direct materials $
  Direct labor $

 

3(b) Compute both direct labor cost and direct materials cost assigned to ending goods in process inventory. (Due to rounding of cost per unit, the total costs accounted for in the cost summary may not equal to sum of all the costs given in the problem. Round your per unit costs to 2 decimal places and final answers to the nearest dollar amount.)

 

  Costs of ending goods in process
  Direct materials $
  Direct labor $

Problem 20-3A Journalizing in process costing; equivalent units and costs L.O. C2, P1, P2, P3

[The following information applies to the questions displayed below.]

Li Company produces large quantities of a standardized product. The following information is available for its production activities for January.

 

               
  Raw materials         Factory overhead incurred      
  Beginning inventory $ 16,000     Indirect materials used $ 80,500  
  Raw materials purchased (on credit)   280,000     Indirect labor used   40,000  
  Direct materials used   (171,500 )   Other overhead costs   159,920  
           
  Indirect materials used   (80,500 )   Total factory overhead incurred $ 280,420  
     
  Ending Inventory $ 44,000          
         
          Factory overhead applied      
  Factory payroll            (140% of direct labor cost)      
  Direct labor used $ 200,300     Total factory overhead applied $ 280,420  
           
  Indirect labor used   40,000          
         
  Total payroll cost (paid in cash) $ 240,300          
         
Additional information about units and costs of production activities follows.

 

               
  Units       Costs        
  Beginning goods in process inventory 2,600     Beginning goods in process inventory        
  Started 26,000          Direct materials $ 3,000    
  Ending goods in process inventory 4,900          Direct labor   3,500    
             Factory overhead   4,000    
           
            $ 10,500
  Status of ending goods in process inventory       Direct materials added       171,500
     Materials—Percent complete 90  %   Direct labor added       200,300
     Labor and overhead—Percent complete 75  %   Overhead applied (140% of direct labor)       280,420
           
        Total costs     $ 662,720
           
        Ending goods in process inventory     $ 92,911
During January, 22,000 units of finished goods are sold for $160 cash each. Cost information regarding finished goods follows.

 

       
  Beginning finished goods inventory $ 150,000  
  Cost transferred in   569,809  
  Cost of goods sold   (598,390 )
 
  Ending finished goods inventory $ 121,419  
 

references

6.

value: 5.00 points

 

 

Problem 20-3A Part 1

Required:
1(a) Prepare journal entry dated January 31 to record the purchase of raw materials. (Omit the “$” sign in your response.)

 

Date General Journal Debit Credit
Jan. 31      
       

 

1(b) Prepare journal entry dated January 31 to record the direct materials usage. (Omit the “$” sign in your response.)

 

Date General Journal Debit Credit
Jan. 31      
       

 

1(c) Prepare journal entry dated January 31 to record the indirect materials usage. (Omit the “$” sign in your response.)

 

Date General Journal Debit Credit
Jan. 31      
       

 

1(d) Prepare journal entry dated January 31 to record the factory payroll costs. (Omit the “$” sign in your response.)

 

Date General Journal Debit Credit
Jan. 31      
       

 

1(e) Prepare journal entry dated January 31 to record the direct labor costs used in production. (Omit the “$” sign in your response.)

 

Date General Journal Debit Credit
Jan. 31      
       

 

1(f) Prepare journal entry dated January 31 to record the indirect labor costs. (Omit the “$” sign in your response.)

 

Date General Journal Debit Credit
Jan. 31      
       

 

1(g) Prepare journal entry dated January 31 to record the other overhead costs—credit Other Accounts.(Omit the “$” sign in your response.)

 

Date General Journal Debit Credit
Jan. 31      
       

 

1(h) Prepare journal entry dated January 31 to record the overhead applied. (Omit the “$” sign in your response.)

 

Date General Journal Debit Credit
Jan. 31      
       

 

1(i) Prepare journal entry dated January 31 to record the goods transferred to finished goods. (Omit the “$” sign in your response.)
Date General Journal Debit Credit
Jan. 31      
       

 

1(j) Prepare journal entries dated January 31 to record the sale of finished goods. (Omit the “$” sign in your response.)

 

Date General Journal Debit Credit
Jan. 31      
       
       
       
       

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7.

value: 5.00 points

 

 

Problem 20-3A Part 2

2. Prepare a process cost summary report for this company, showing costs charged to production, units cost information, equivalent units of production, cost per EUP, and its cost assignment and reconciliation. (Due to rounding of cost per unit, the total costs accounted for in the cost summary may not equal to sum of all the costs given in the problem. Round your cost per EUP answers to 2 decimal places and consider the same in the other calculations. Round other answers to the nearest dollar amount. Omit the “$” sign in your response.)

 

LI COMPANY
Process Cost Summary
For Month Ended January 31
  Costs Charged to Production    
  Costs of beginning goods in process    
  $  
     
     
   
    $
  Costs incurred this period    
  $  
     
     
   
     
   
  Total costs to account for   $
   

 

Unit cost information
Units to account for   Units accounted for  
       
       
   
  Total units to account for     Total units accounted for  
   

 

Equivalent units of production Direct Materials Direct Labor Factory Overhead
   EUP  EUP  EUP
   EUP  EUP  EUP
 
  Equivalent units of production  EUP  EUP  EUP
 

 

Cost per EUP Direct Materials Direct Labor Factory Overhead
  $   $   $  
             
 
  Total costs $   $   $  
     EUP      EUP    EUP
 
  Cost per EUP $  Per EUP $  Per EUP $  Per EUP
 

 

Cost assignment and reconciliation
  Costs transferred out    
  $  
     
     
   
    $
  Costs of ending goods in process    
  $  
     
     
   
     
   
  Total costs to account for   $
   

roblem 20-5A Process cost summary, equivalent units, cost estimates L.O. C2, C3, P4

[The following information applies to the questions displayed below.]

Ogden Co. manufactures a single product in one department. All direct materials are added at the beginning of the manufacturing process. Direct labor and overhead are added evenly throughout the process. The company uses monthly reporting periods for its weighted-average process cost accounting. During October, the company completed and transferred 24,600 units of product to finished goods inventory. Its 4,200 units of beginning goods in process consisted of $20,800 of direct materials, $203,300 of direct labor, and $100,040 of factory overhead. It has 3,000 units (100% complete with respect to direct materials and 90% complete with respect to direct labor and overhead) in process at month-end. After entries to record direct materials, direct labor, and overhead for October, the company’s Goods in Process Inventory account follows.

 

  Goods in Process Inventory     Acct. No.133
Date Explanation Debit Credit Balance
Oct.  1   Balance     324,140
31   Direct materials 504,900   829,040
31   Direct labor 1,224,300   2,053,340
31   Applied overhead 963,840   3,017,180

references

8.

value: 5.00 points

 

 

Problem 20-5A Part 1

1. Prepare the company’s process cost summary for October using the weighted-average method. (Due to rounding of cost per unit, the total costs accounted for in the cost summary may not equal to sum of all the costs given in the problem. Round your cost per EUP answers to 2 decimal places and consider the same in the other calculations. Round other answers to the nearest dollar amount. Omit the “$” sign in your response.)

 

OGDEN CO.
Process Cost Summary
For Month Ended October 31
  Costs Charged to Production    
  Costs of beginning goods in process    
  $  
     
     
   
    $
  Costs incurred this period    
  $  
     
     
   
     
   
  Total costs to account for   $
   

 

Unit cost information
Units to account for   Units accounted for  
       
       
   
  Total units to account for     Total units accounted for  
   

 

Equivalent units of production Direct Materials Direct Labor Factory Overhead
   EUP  EUP  EUP
      EUP  EUP  EUP
 
  Equivalent units of production  EUP  EUP  EUP
 

 

Cost per EUP Direct Materials Direct Labor Factory Overhead
  $ $ $
       
 
  Total costs $ $ $
    EUP   EUP   EUP
 
  Cost per EUP $  per EUP $  per EUP $  per EUP
 

 

Cost assignment and reconciliation
  Costs transferred out    
  $  
     
     
   
    $
  Costs of ending goods in process    
  $  
     
     
   
     
   
  Total costs to account for   $
   

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9.

value: 2.00 points

 

 

Problem 20-5A Part 2

2. Prepare the journal entry dated October 31 to transfer the cost of completed units to finished goods inventory. (Omit the “$” sign in your response.)

 

Date General Journal Debit Credit
Oct. 31      
       

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