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Chapter 18: Q,18-19RQ (page 1006)
Question: Department 1 is transferring units that cost $40,000 to Department 2. Give the journal entry.
Answer
Date | Particulars | Debit ($) | Credit ($) |
Work in process inventory-Department 2 | 40,000 | ||
Work in process inventory-Department 1 | 40,000 |
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Work Problem P18-33A using the FIFO method. The Mixing Department beginning work in process of 300 units is 40% complete as to both direct materials and conversion costs. Round equivalent unit of production costs to four decimal places. Round all other costs to the nearest whole dollar.
Casey Carpet manufactures broadloom carpet in seven processes: spinning, dyeing, plying, spooling, tufting, latexing, and shearing. In the Dyeing Department, direct materials (dye) are added at the beginning of the process. Conversion costs are incurred evenly throughout the process. Information for July 2018 follows:
UNITS | |
Beginning work-in-process inventory | 75 rolls |
Transferred in from spinning department during July | 590 rolls |
Completed during July | 550 rolls |
Ending work in process inventory (80% complete for conversion work) | 115 rolls |
COSTS | |
Beginning work in process inventory (transferred in costs, \(3,700, material costs, \)1,450 conversion costs, \(4,950) | \)10,100 |
Transferred in from the spinning department | 21,570 |
Material costs added during July | 11,185 |
Conversion costs added during July (Manufacturing wages, \(8,050; manufacturing overhead allocated, \)45,422) | 53,472 |
Requirements
1. Prepare a production cost report for Casey’s Dyeing Department for July. The
company uses the weighted-average method.
2. Journalize all transactions affecting Casey’s Dyeing Department during July, including the entries that have already been posted. Assume labor costs are accrued and not yet paid.
Question: Department 4 has completed production on units that have a total cost of $15,000. The units are ready for sale. Give the journal entry.
When might it be beneficial for a company to use the FIFO method? When is the weighted-average method more practical?
Question: Castillo Company has three departments: Mixing, Bottling, and Packaging. At the end of the month, the production cost reports for the departments show the costs of the products completed and transferred were \(75,000 from Mixing to Bottling, \)50,000 from Bottling to Packaging, and $65,000 from Packaging to Finished Goods Inventory. Prepare the journal entries for the transfer of the costs.
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