Homework SourseManagerial Accounting Quiz 3 Summer 2018 Chapter 4 Name 10
Managerial Accounting Quiz 3 – Summer 2018
Chapter 4 Name_________________________
10 Points
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Gibson Corporation uses process costing. A number of transactions that occurred in September are listed below. Required (3 Points): Prepare journal entries for each of these transactions.
(1) Raw materials that cost $50,817 are withdrawn from the storeroom for use in the Mixing Department. All of these raw materials are classified as direct materials.
(2) Direct labor costs of $42,908 are incurred, but not yet paid, in the Mixing Department.
(3) Manufacturing overhead of $59,723 is applied in the Mixing Department using the department\'s predetermined overhead rate.
(4) Units with a carrying cost of $128,992 finish processing in the Mixing Department and are transferred to the Drying Department for further processing.
(5) Units with a carrying cost of $117,663 finish processing in the Drying Department, the final step in the production process, and are transferred to the finished goods warehouse.
(6) Finished goods with a carrying cost of $108,216 are sold on account for $149,500.
Solution
LINTON INC First Processing Department Summery of Physical units and equivalent units calculation Units to be accounted for Phycal units Units in the beginning WIP inventory 800 Units started during the period 9200 Total units to be accounted for 10000 Equivalent units Units accounted for Physical unit Material Conversion Units completed and transferred out 8200 8200 8200 Units in ending WIP inventory 1800 1440 360 Material=(0.8*1800), Conversion=(0.2*1800) Total units accounted for 10000 9640 8560 Summery of costs to be accounted for Costs to be accounted for Materials Conversion Total Cost in beginning WIP $6,000 $9,900 $ 15,900 Costs incurred during the period $113,900 $322,500 $ 436,400 Total costs to be accounted for $ 119,900.0 $ 332,400 $ 452,300 Calculation of costs per equivalent unit Materials Conversion Total Total costs to be accounted for(a) $ 119,900 $ 332,400 $ 452,300 Total equivalent units accounted for(b) 9640 8560 18200 Cost per equivalent unit(a)/(b) $ 12.44 $ 38.83 $ 51.27 Assign costs to units transferred out and in Ending WIP Materials Conversion Total Costs assigned to units transferred out $ 101,990 $ 318,421 $ 420,410 Cost assigned to ending WIP $ 17,910 $ 13,979 $ 31,890 $ 452,300 a Equivalent Units of Production: Materials 9640 Conversion 8560 b Cost per equivalent unit Materials $ 12.44 Conversion $ 38.83 Total $ 51.27 c Cost of units transferred out Materials $ 101,990 Conversion $ 318,421 Total $ 420,410 d Cost of Ending work in process Materials $ 17,910 Conversion $ 13,979 Total $ 31,890 JOURNAL ENTRY Ref Account Title Debit Credit .(1) Work in process-Mixing $50,817 Raw material inventory $50,817 .(2) Work in process-Mixing $42,908 Wages payable $42,908 .(3) Work in process-Mixing $59,723 Manufacturing overhead $59,723 .(4) Work in process-Drying $128,992 Work in process-Mixing $128,992 .(5) Finished goods inventory $117,663 Work in process-Drying $117,663 .(6) Accounts Receivable $149,500 Sales $149,500 Cost of goods sold $108,216 Finished goods inventory $108,216
