Well Products
produces an antacid product that goes through two departments
ACC 214 - Chapter 6 Comprehensive Process Costing
Problem - Well Products produces an antacid product that goes through two
departments
ACC 214 – Cost Accounting Excel Assignment Number 3
Well Products produces an antacid product that goes through two
departments – Cooking and Bottling. The company has recently hired a new
assistant accountant, who has prepared the following summary of production and
costs for the Cooking Department for May using the weighted-average method.
Cooking Department Costs:
Work in process inventory, May 1: 70,000 quarts,
materials 60% complete, labor and overhead 30% complete $61,000*
materials 60% complete, labor and overhead 30% complete $61,000*
Materials added during May 569,850
Labor added during May 100,000
Overhead applied during May 235,160
Total department costs 966,010
*Consists of
materials, $39,000; labor $5,000; and overhead, $17,000
Cooking Department costs assigned to:
Quarts completed and
transferred to the Bottling
Department: 400,000 quarts at ? per quart ?
Work in process inventory, May 31: 50,000 quarts,
Materials 70% complete, labor and overhead 40%
Complete ?
Total departmental costs assigned ?
Department: 400,000 quarts at ? per quart ?
Work in process inventory, May 31: 50,000 quarts,
Materials 70% complete, labor and overhead 40%
Complete ?
Total departmental costs assigned ?
The new accountant has determined the cost per quart transferred to be
$2.415, as follows:
Total departmental costs,
966,010
Quarts completed and
transferred, 400,000
However, the new accountant is unsure how to use this unit cost figure
in assigning cost to the ending work in process inventory. In addition, the
company’s general ledger shows only $898,460 in costs transferred from the
Cooking Department to the Bottling Department, which does not agree with the
$966,000 figure above.
The general ledger also shows the following costs incurred in the
Bottling Department during May: materials used, $130,000, direct labor cost
incurred, $80,000; and overhead cost applied to products, $158,000.
Required:
1. Prepare journal
entries as follows to record activity in the company during May. Key your
entries to the letters (a) through (g) below.
a. Raw materials were issued to the two departments for use in production.
b. Direct labor costs were incurred in the two departments.
c. Manufacturing overhead costs were incurred, $400,000. (Credit Accounts Payable) The company maintains a single manufacturing Overhead account for the entire plant.
d. Manufacturing overhead cost was applied to production in each department using predetermined overhead rates.
e. Units completed as to processing in the Cooking Department were transferred to the Bottling Department, $898,460.
f. Units completed as to processing in the Bottling Department were transferred to Finished Gods, $1,300,000.
g. Units were sold on account, $2,000,000. The Cost of Goods Sold was $1,250,000.
a. Raw materials were issued to the two departments for use in production.
b. Direct labor costs were incurred in the two departments.
c. Manufacturing overhead costs were incurred, $400,000. (Credit Accounts Payable) The company maintains a single manufacturing Overhead account for the entire plant.
d. Manufacturing overhead cost was applied to production in each department using predetermined overhead rates.
e. Units completed as to processing in the Cooking Department were transferred to the Bottling Department, $898,460.
f. Units completed as to processing in the Bottling Department were transferred to Finished Gods, $1,300,000.
g. Units were sold on account, $2,000,000. The Cost of Goods Sold was $1,250,000.
2. Post the journal entries from (1) above to T-accounts. Balances in
selected accounts on May 1 are given below:
Raw materials $710,000
Work in Process – Bottling Department 5,000
Work in Process – Cooking Department $61,000
Finished Goods $45,000
After posting the entries to the T-accounts, find the ending balance in
the inventory accounts and the Manufacturing Overhead account. Use just one
Manufacturing Overhead account, using debit amounts for actual or incurred
overhead and credit amounts for assigning or applying overhead.
3. Prepare a production report for the Cooking Department for May using
the FIFO method.
4. Using the closeout to the COGS method, determine the over or
underapplied overhead and show the journal entry to close the manufacturing
overhead account.
Submission: This problem should be worked in an Excel spreadsheet. You
may organize the Excel spreadsheet any way you like, but you must organize it
so that it can be easily followed. Use the part numbers and letters to help organize
your answer. An assignment has been created in Blackboard under Module 6. This
is the location where you can upload the document. Just open this assignment
and there will be a place to upload documents.
TUTORIAL PREVIEW
1. Prepare journal entries as follows to record activity in the company
during May. Key your entries to the letters (a) through (g) below.
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a.
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Work in Process—Cooking
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569,850
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Work in Process—Bottling
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130,000
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Raw Materials
|
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699,850
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b.
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Work in Process—Cooking
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100,000
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Work in Process—Bottling
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80,000
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File name: Well products.xls File type: xls PRICE: $20
