1. Total EUP for CC 2,850 3. WIP Balance $1,145 Smith's Exteriors produces exterior siding for homes. The Preparation Department begins with wood, which is chopped into small bits. At the end of the process, an adhesive is added. Then the wood/adhesive mixture goes on to the Compression Department, where the wood is compressed into sheets. Conversion costs are added evenly throughout the preparation process. January data for the Preparation Department are as follows: UNITS Beginning Work-in-Process Inventory Started in production Completed and transferred out to Compression in January Ending Work-in-Process inventory (30% of the way through the preparation process) COSTS Beginning Work-in-Process Inventory Costs added during January Wood Adhesives Direct labor Manufacturing overhead allocated Total costs Requirements 1. Prepare a production cost report for the Preparation Department for January. (Hint: Each direct material added at a different point in the production process requires its own equivalent units of production computation.) O sheets 3,700 sheets 2,000 sheets 1,700 sheets 50 3,108 1,240 558 1,450 $6,356 2. Prepare the journal entry to record the cost of the sheets completed and transferred out to the Compression Department. 3. Post the journal entries to the Work-in-Process Inventory-Preparation T-account. What is the ending balance? IT
1. Total EUP for CC 2,850 3. WIP Balance $1,145 Smith's Exteriors produces exterior siding for homes. The Preparation Department begins with wood, which is chopped into small bits. At the end of the process, an adhesive is added. Then the wood/adhesive mixture goes on to the Compression Department, where the wood is compressed into sheets. Conversion costs are added evenly throughout the preparation process. January data for the Preparation Department are as follows: UNITS Beginning Work-in-Process Inventory Started in production Completed and transferred out to Compression in January Ending Work-in-Process inventory (30% of the way through the preparation process) COSTS Beginning Work-in-Process Inventory Costs added during January Wood Adhesives Direct labor Manufacturing overhead allocated Total costs Requirements 1. Prepare a production cost report for the Preparation Department for January. (Hint: Each direct material added at a different point in the production process requires its own equivalent units of production computation.) O sheets 3,700 sheets 2,000 sheets 1,700 sheets 50 3,108 1,240 558 1,450 $6,356 2. Prepare the journal entry to record the cost of the sheets completed and transferred out to the Compression Department. 3. Post the journal entries to the Work-in-Process Inventory-Preparation T-account. What is the ending balance? IT
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Question
Transcribed Image Text:Learning Objectives 2, 3, 4
1. Total EUP for CC 2,850
3. WIP Balance $1,145
P18-31A Preparing a production cost report, two materials added at different
points, no beginning WIP or costs transferred in; journal entries
Smith's Exteriors produces exterior siding for homes. The Preparation Department
begins with wood, which is chopped into small bits. At the end of the process, an
adhesive is added. Then the wood/adhesive mixture goes on to the Compression
Department, where the wood is compressed into sheets. Conversion costs are
added evenly throughout the preparation process. January data for the Preparation
Department are as follows:
UNITS
Beginning Work-in-Process Inventory
Started in production
Completed and transferred out to Compression in January
Ending Work-in-Process inventory (30% of the way through
the preparation process)
COSTS
Beginning Work-in-Process Inventory
Costs added during January
Wood
Adhesives
Direct labor
Manufacturing overhead allocated
Total costs
Requirements
1. Prepare a production cost report for the Preparation Department for January.
(Hint: Each direct material added at a different point in the production process
requires its own equivalent units of production computation.)
0 sheets
3,700 sheets
2,000 sheets
1,700 sheets
50
3,108
1,240
558
1,450
$6,356
2. Prepare the journal entry to record the cost of the sheets completed and transferred
out to the Compression Department.
3. Post the journal entries to the Work-in-Process Inventory-Preparation T-account.
What is the ending balance?
I'T
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