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.

Short Answer

Expert verified

Answer

Date

Particulars

Debit ($)

Credit ($)

Finished goods inventory

15,000

WIP inventory

15,000

Step by step solution

01

WIP inventory

The work in process inventory means the inventory which are under processing and are partially completed. It is the inventory which is currently in the production process at the end of the accounting period.

02

Recording of the total cost when the production is completed

When the production is completed, the work in process inventory is transferred to the finished goods inventory by debiting the finished goods inventory account and by crediting the WIP inventory account.

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Most popular questions from this chapter

Question: Refer to the data in Short Exercise S18-8 and your results for equivalent units of production. The Mixing Department of Complete Foods has direct materials costs of \(46,500 and conversion costs of \)23,540 for October.

Compute the cost per equivalent unit of production for direct materials and for

conversion costs.

Question: Refer to Short Exercises S18-8 and S18-9. Use Complete Foods’s costs per equivalent unit of production for direct materials and conversion costs that you calculated in Short Exercise S18-9.

Calculate the cost of the 38,000 units completed and transferred out and the

24,000 units, 20% complete, in the ending Work-in-Process Inventory.

Question: Department 1 is transferring units that cost $40,000 to Department 2. Give the journal entry.

Describe ways the production cost report can be used by management.

Complete the missing amounts in the following production report. Materials are added at the beginning of the process; conversion costs are incurred evenly; the ending inventory is 60% complete. The company uses the weighted-average method.

NATHAN COMPANY

Production Cost Report – Finishing Department

Month Ended September 30, 2018

Units


Physical units
Equivalent Units
Direct materials
Conversion costs

Units to account for:

  • Beginning work-in-process

500

  • Started in production

2,200

Total units to account for

(a)

Units accounted for:

  • Completed and transferred out

(b)

(d)

(g)

  • Ending work-in-process

500

(e )

(h)

Total units accounted for

(c)

(f)

(i)

COSTS

Direct materials

Conversion costs

Total costs

Cost to account for:

  • Beginning work-in-process

\(1,200

(j)

\)2,140

  • Cost added during period

12,030

8,310

(k)

Total costs to account for

(l)

9,250

22,480

Divided by: Total EUP

(m)

(n)

Cost per equivalent unit

(o)

(p)

Costs accounted for:

  • Completed and transferred out

(q)

(r)

(s)

  • Ending work-in-process

(t)

(u)

(v)

Total cost accounted for

(w)

(x)

$22,480

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