Question

Clopack Company manufactures one product that goes through one processing department called Mixing. All raw materials are introduced at the start of work in the Mixing Department. The company uses the weighted-average method to account for units and costs. Its Work in Process T-account for the Mixing Department for June follows (all forthcoming questions pertain to June):
Work in Process Mixing Department:
June 1 balance 28,000 Completed and transferred to Finished Goods ?
Materials 151,215
Direct labor 96,500
Overhead 114,000
June 30 balance ?
The June 1 work in process inventory consisted of 4,300 pounds with $15,240 in materials cost and $12,760 in conversion cost. The June 1 work in process inventory was 100% complete with respect to materials and 60% complete with respect to conversion. During June, 36,800 pounds were started into production. The June 30 work in process inventory consisted of 9,000 pounds that were 100% complete with respect to materials and 50% complete with respect to conversion.
Required:
1-a) Prepare the journal entries to record the raw materials used in production and
1-b) the direct labor cost incurred. (options i am given as names for entries include: Accounts Payable, Accounts receivable, Cost of goods sold, finished goods, manufacturing overhead, purchases of raw materials, raw materials inventory, wages payable, work in process-mixing.)
2) Prepare the journal entry to record the overhead cost applied to production. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
3) How many units were completed and transferred to finished goods during the period?
4) Compute the equivalent units of production for materials.
5) Compute the equivalent units of production for conversion.
6) For materials, what is the sum of the cost of beginning work in process inventory plus the cost added during the period?
7) For conversion, what is the sum of the cost of beginning work in process inventory plus the cost added during the period?
8) What is the cost per equivalent unit for materials? (Round your answer to 2 decimal places.)
9) What is the cost per equivalent unit for conversion? (Round your answer to 2 decimal places.)
10) What is the cost of ending work in process inventory for materials? (Do not round intermediate calculations.)
11) What is the cost of ending work in process inventory for conversion?
12) What is the cost of materials transferred to finished goods? (Do not round intermediate calculation.)
13) What is the amount of conversion cost transferred to finished goods?
14) Prepare the journal entry to record the transfer of costs from Work in Process to Finished Goods.
15-a) What is the total cost to be accounted for?
15-b) What is the total cost accounted for?

Answer 1

Answer:

Clopack Company

1-a) Journal entries to record raw materials used in production

Debit Work in Process $151,215

Credit Raw materials $151,215

To record the cost of raw materials used in production.

1-b) the direct labor cost incurred

Debit Work in Process $96,500

Credit Factory Labor $96,500

To record the cost of direct labor costs.

2. Journal entry to record applied overhead cost

Debit Work in Process $114,000

Credit Manufacturing Overhead $114,000

To apply overhead to production.

3. Units completed and transferred to Finished Goods:

= 32,100 pounds

4. Equivalent units of production for materials:

= 41,100

5. Equivalent units of production for conversion:

= 37,500

6. Total cost of materials (beginning WIP and cost added):

= $166,455

7. Total cost of conversion (beginning WIP and cost added):

= $223,250

8. The cost per equivalent unit for materials:

= $4.05

9. The cost per equivalent unit for conversion:

=  $5.95

10. The cost of ending WIP for materials:

= $36,450

11. The cost of ending WIP for conversion:

= $32,130

12. The cost of materials transferred to finished goods:

= $130,005

13. The amount of conversion transferred to finished goods:

=  $190,995

14. Journal entry to record the transfer of costs from WIP to Finished Goods:

Debit Finished Goods $321,000

Credit Work in Process $321,000

To record the manufacturing cost transferred to Finished Goods.

15-a) The total cost to be accounted for:

= $389,715

16-b) The total cost accounted for:

= $389,580

Explanation:

a) Data and Calculations:

Work in Process Mixing Department:

June 1 balance 28,000 Completed and transferred to Finished Goods ?

Materials 151,215

Direct labor 96,500

Overhead 114,000

June 30 balance ?

The June 1 WIP =4,300 pounds with $15,240 in materials cost (100%) and $12,760 in conversion cost (60%).

Started in June 36,800

June 30 WIP = 9,000 pounds, materials (100%) and conversion (50%)

                                                Units     Materials      Conversion       Total

Beginning Work in Process    4,300    $15,240           $12,760    $28,000

Started in June                     36,800      151,215           210,500      361,715

Total units and costs             41,100   $166,455       $223,250   $389,715

Ending Work in Process        9,000

Units transferred out            32,100

Equivalent units of production:

                                          Materials      Conversion

Units transferred out           32,100          32,100

Ending Work in Process       9,000            5,400

Total equivalent units          41,100          37,500

Cost per equivalent unit:

                                          Materials      Conversion

Total costs of production $166,455       $223,250

Total equivalent units           41,100            37,500

Cost per equivalent unit      $4.05           $5.95

Cost assigned to:

Units transferred out      $130,005        $190,995      $321,000

  (32,100 * $4.05 and 32,100 * $5.95)

Ending Work in Process     36,450             32,130       $68,580

  (9,000  * $4.05 and 5,400 * $5.95)

Total cost assigned        $166,455        $223,125     $389,580