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BabaBlast [244]
2 years ago
6

Lamont Company produced 80,000 machine parts for diesel engines. There were no beginnings or ending work-in-process inventories

in any department. Lamont incurred the following costs for May:
Molding Department Grinding Department Finishing Department
Direct materials $12,000 $5,400 $8,000
Direct labor 10,000 8,500 12,000
Applied overhead 17,000 14,000 11,000
Required:
1. Calculate the costs transferred out of each department.
2. Prepare the journal entries corresponding to these transfers. Also, prepare the journal entry for Grinding that reflects the costs added to the transferred-in goods received from Molding.
3. What if the Grinding Department had an ending WIP of $11,000? Calculate the cost transferred out.
4. What is the effect on finished goods calculated in Requirement 1, assuming the other two departments have no ending WIP?
Business
1 answer:
DENIUS [597]2 years ago
3 0

Answer:

Lamont Company

1. The costs transferred out of each department:

                                       Molding        Grinding     Finishing

Cost transferred out     $39,000       $66,900     $86,900

WIP                                                        $11,000

Cost transferred out    $39,000       $55,900     $86,900

2. Journal Entries:

Debit WIP: Grinding $39,000

Credit WIP: Molding $39,000

To record the transfer of cost from Molding to Grinding.

Debit Finishing $66,900

Credit WIP: Grinding $66,900

To record the transfer of cost from Grinding to Finishing.

Debit Finished Inventory $86,900

Credit Finishing $86,900

To record the transfer of cost from Finishing to Finished Inventory.

3.                                   Molding        Grinding     Finishing

WIP                                                        $11,000

Cost transferred out    $39,000       $55,900     $86,900

4. The effect of the ending WIP in the Grinding Department is that the cost of inventory transferred to the Finishing Department is reduced by the amount of the Work-in-Process Inventory ($11,000).

Explanation:

a) Data and Calculations:

Costs incurred in May:

                                  Molding        Grinding     Finishing  

Direct materials        $12,000          $5,400       $8,000

Direct labor                 10,000            8,500        12,000

Applied overhead      17,000           14,000         11,000

Total costs

 transferred out     $39,000       $27,900      $31,000

Grinding costs         -39,000         39,000

Total costs                0                 $66,900      $31,000

Cost transferred out to finishing -55,900       55,900

Total costs                0                    0              $86,900

WIP                            0                     11,000

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2 years ago
The ______ requires that if a new employee had group health insurance at a previous employer and the new employer has healthcare
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4 0
3 years ago
An author just signed a lucrative contract with a publisher that offers to pay her the amount of $500 at the end of year 9 when
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Answer:

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PresentValue=\frac{FutureValue}{(1+r)^{n} }

Where: r is our discount rate (7%) and n the periods from now when she will receive that $500 amount. This should look like this.

PresentValue=\frac{500}{(1+0.07)^{9} } =271.97

Ok, so the equivalent amount of money today of those $500 in nine years is $271.97, but the author wants $100 today so the remaining amount has to be used to find the equal annual payments to be made in order to be equivalent to re remaining balance ($171.97). We now need to use the following equation.

Present Value=\frac{A((1+r)^{n}-1 )}{r(1+r)^{n} }

And we solve for "A" like this

171.97=\frac{A((1+0.07)^{9}-1 )}{0.07(1+0.07)^{9} }

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3 years ago
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Arranging it in a simultaneous equations for total cost:

We can let fixed cost per month to be F, and the variable cost per machine -hour be V, and the number of machine-hours be Q.

Therefore

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Answer:

Equity of the business= $17,076.

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