Managerial accounting 1b ch16 | Accounting homework help

Lowes Lumber produces bagged bark for use in landscaping. Production involves packaging bark chips in plastic bags in a bagging department. The following information describes production operations for October.

Bagging
Department

  Direct materials used

$

230,000

  Direct labor used

$

38,000

  Predetermined overhead rate (based on direct labor)

120

%

  Goods transferred from bagging to finished goods

$

(203,500

)

The company’s revenue for the month totaled $450,000 from credit sales, and its cost of goods sold for the month is $250,000.

(1)

Prepare journal entry dated October 31 to record its October production activities for direct material usage. (Omit the “$” sign in your response.)

(2)

Prepare journal entry dated October 31 to record its October production activities for direct labor usage.(Omit the “$” sign in your response.)

(3)

Prepare journal entry dated October 31 to record its October production activities for overhead allocation.(Omit the “$” sign in your response.)

(4)

Prepare journal entry dated October 31 to record its October production activities for goods transfer from production to finished goods. (Omit the “$” sign in your response.)

(5)

Prepare journal entries dated October 31 to record its October activities for sales. (Omit the “$” sign in your response.)

During April, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of these transferred units, 37,500 were in process in the production department at the beginning of April and 150,000 were started and completed in April. April’s beginning inventory units were 60% complete with respect to materials and 40% complete with respect to labor. At the end of April, 51,250 additional units were in process in the production department and were 80% complete with respect to materials and 30% complete with respect to labor.

1.

Compute the number of units transferred to finished goods.

2.

Compute the number of equivalent units with respect to both materials used and labor used in the production department for April using the weighted-average method.

Direct
Materials

Direct Labor

  Number of equivalent units

During April, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of these transferred units, 37,500 were in process in the production department at the beginning of April and 150,000 were started and completed in April. April’s beginning inventory units were 60% complete with respect to materials and 40% complete with respect to labor. At the end of April, 51,250 additional units were in process in the production department and were 80% complete with respect to materials and 30% complete with respect to labor.

The production department had $531,480 of direct materials and $407,689 of direct labor cost charged to it during April. Also, its beginning inventory included $74,075 of direct materials cost and $28,493 of direct labor.

1.

Using the weighted-average method, compute the direct materials cost and the direct labor cost per equivalent unit for the department. (Round your answers to 2 decimal places. Omit the “$” sign in your response.)

Direct Materials

Direct Labor

  Cost per equivalent unit

2.

Using the weighted-average method, assign April’s costs to the department’s output—specifically, its units transferred to finished goods and its ending goods in process inventory. (Round your intermediate calculations and final answer to 2 decimal places. Omit the “$” sign in your response.)

During April, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of these transferred units, 37,500 were in process in the production department at the beginning of April and 150,000 were started and completed in April. April’s beginning inventory units were 60% complete with respect to materials and 40% complete with respect to labor. At the end of April, 51,250 additional units were in process in the production department and were 80% complete with respect to materials and 30% complete with respect to labor.

Compute the number of equivalent units with respect to both materials used and labor used in the production department for April using the FIFO method.

Direct
Materials

Direct Labor

  Number of equivalent units

During April, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of these transferred units, 37,500 were in process in the production department at the beginning of April and 150,000 were started and completed in April. April’s beginning inventory units were 60% complete with respect to materials and 40% complete with respect to labor. At the end of April, 51,250 additional units were in process in the production department and were 80% complete with respect to materials and 30% complete with respect to labor.

The production department had $531,480 of direct materials and $407,689 of direct labor cost charged to it during April. Also, its beginning inventory included $74,075 of direct materials cost and $28,493 of direct labor.

1.

Using the FIFO method, compute the direct materials cost and the direct labor cost per equivalent unit for the department. (Round your answers to 2 decimal places. Omit the “$” sign in your response.)

Direct Materials

Direct Labor

  Cost per equivalent unit

$ 

$ 

2.

Using the FIFO method, assign April’s costs to the department’s output—specifically, its units transferred to finished goods and its ending goods in process inventory. (Round your intermediate calculations and final answer to 2 decimal places. Omit the “$” sign in your response.)

Edison Company manufactures wool blankets and accounts for product costs using process costing. The following information is available regarding its May inventories.

Beginning
Inventory

Ending
Inventory

  Raw materials inventory

$

28,000

$

25,500

  Goods in process inventory

220,750

252,000

  Finished goods inventory

319,000

277,000

The following additional information describes the company’s production activities for May.

  Raw materials purchases (on credit)

$

135,000

  Factory payroll cost (paid in cash)

791,500

  Other overhead cost (Other Accounts credited)

43,000

  Materials used

       Direct

$

93,500

       Indirect

31,000

  Labor used

       Direct

$

352,000

       Indirect

439,500

  Overhead rate as a percent of direct labor

110

%

  Sales (on credit)

$

1,500,000

Required:

1(a)

Compute the cost of products transferred from production to finished goods. (Omit the “$” sign in your response.)

  Cost of products transferred

1(b)

Compute the cost of goods sold. (Omit the “$” sign in your response.)

  Cost of goods sold

2(a)

Prepare journal entry dated May 31 to record the raw materials purchases. (Omit the “$” sign in your response.)

2(b)

Prepare journal entry dated May 31 to record the direct materials usage. (Omit the “$” sign in your response.)

2(c)

Prepare journal entry dated May 31 to record the indirect materials usage. (Omit the “$” sign in your response.)

2(d)

Prepare journal entry dated May 31 to record the payroll costs. (Omit the “$” sign in your response.)

2(e)

Prepare journal entry dated May 31 to record the direct labor costs. (Omit the “$” sign in your response.)

2(f)

Prepare journal entry dated May 31 to record the indirect labor costs. (Omit the “$” sign in your response.)

2(g)

Prepare journal entry dated May 31 to record the other overhead costs. (Omit the “$” sign in your response.)

2(h)

Prepare journal entry dated May 31 to record the overhead applied. (Omit the “$” sign in your response.)

2(i)

Prepare journal entry dated May 31 to record the goods transferred from production to finished goods.(Omit the “$” sign in your response.)

2(j)

Prepare journal entry dated May 31 to record the sale of finished goods. (Omit the “$” sign in your response.)

Fairfax Company uses weighted-average process costing to account for its production costs. Direct labor is added evenly throughout the process. Direct materials are added at the beginning of the process. During September, the company transferred 735,000 units of product to finished goods. At the end of September, the goods in process inventory consists of 207,000 units that are 90% complete with respect to labor. Beginning inventory had $244,920 of direct materials and $69,098 of direct labor cost. The direct labor cost added in September is $1,312,852, and the direct materials cost added is $1,639,080.

Required:

1(a)

Determine the equivalent units of production with respect to direct labor.

1(b)

Determine the equivalent units of production with respect to direct materials.

2.

Compute both the direct labor cost and the direct materials cost per equivalent unit. (Round your answers to 2 decimal place. Omit the “$” sign in your response.)

Per equivalent
unit

  Direct labor cost

  Direct materials cost

3(a)

Compute both direct labor cost and direct materials cost assigned to units completed and transferred out. (Round your per unit costs to 2 decimal places and final answers to the nearest dollar amount.)

Cost transferred
out

  Direct materials

  Direct labor

3(b)

Compute both direct labor cost and direct materials cost assigned to ending goods in process inventory. (Round your per unit costs to 2 decimal places and final answers to the nearest dollar amount.)

Costs of ending goods in process

  Direct materials

  Direct labor