49 b 50 Department 1 Fow of units and equivalent units calculation January 2019 Production Where do the units come from? Where do the units go? Equivalent units 51 % work done Direct materials % work done 52 Conversion costs Beginning inventory Started Total 53 54 $ $ Total 55 56 Beginning inventory will be completed and transferred, and units started may either be completed and transferred, or remain in ending inventory. 57 58 59 Product cost report 60 61 Direct materials Conversion costs 62 Beginning inventory 63 64 Current Total costs to account for $ 65 66 Total equivalent units 67 68 Average cost/equivalent unit 69 70 Where do the costs go? 71 72 Completed/transferred: 73 74 75 Cost of goods manufactured Ending inventory: 76 77 78 79 Cost of ending inventory Total costs allocated 80 81 82 83 84 85 Department 2 Fw of units and equivalent units calculation January 2019 Production 8 c 87 Where do the units go? Equivalent units Where do the units come from? 88 Direct materials % work done % work done Conversion costs 89 Beginning inventory Started Completed/transferred $ 90 Ending inventory 91 $ $ Total Total 92 93 Beginning inventory will be completed and transferred, and units started may either be completed and transferred, or remain in ending inventory. 94 RE Product cost report Direct materials Conversion costs Beginning inventory Current Total costs to account for Total equivalent units Average cost/equivalent unit Where do the costs go? Completed/transferred: Direct materials Conversion costs Cost of goods manufactured Ending inventory: Direct materials Conversion costs $ Cost of ending inventory Total costs allocated

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

I cannot figure out how to do this two department problem

Patterson Laboratories, Inc., produces one of its products in two successive departments. All materials are added at the beginning of the process in Department 1; no materials are used in Department 2. Conversion costs are incurred evenly in both departments. Patterson uses the weighted average method for process costing. January 1, 2019, inventory account balances are as follows:

Materials Inventory	$30,000
Work in process- Department 1 (3,000 units, 30% complete)
Direct materials	4560
Conversion costs	10,640
Work in process - Department 2 (3550 units, 40% complete)	43,439
Finished goods inventory (2,000 units @ $16	32,000

During January, the following transactions occurred:

Purchased materials on account, $90,000
Placed $84,000 of materials into process in Department 1. This $84,000 represents 24,000 units of materials.
Distributed total payroll costs: $108,116 of direct labor to Department 1, $62,700 of direct labor to Department 2, and $51,000 of indirect labor to Manufacturing Overhead.
Incurred other actual manufacturing overhead costs, $81,000. (Credit Other Accounts)
Applied overhead to the two processing departments: $88,000 to Department 1 and $43,900 to Department 2.
Transferred 25,000 completed units from Department 1 to Department 2. The 2,000 units remaining in Department 1 were 20% completed with respect to the conversion costs.
Transferred 26,000 completed units from Department 2 to finished good inventory. The 2,550 units remaining in Department 2 were 70% completed with respect to conversion costs.
Sold 20,000 units on account at $27 per unit. Patterson uses weighted average inventory costing procedures for the finished goods inventory.

Questions (see attached screenshot).

b.) Prepare a product cost report (with its supporting calculations) for Department 1

c.) Prepare a product cost report (with its supporting calculations) for Department 2

49 b
50
Department 1 Fow of units and equivalent units calculation
January 2019 Production
Where do the units come from?
Where do the units go?
Equivalent units
51
% work done
Direct materials % work done
52
Conversion costs
Beginning inventory
Started
Total
53
54
$
$
Total
55
56
Beginning inventory will be completed and transferred, and units started may either be completed and transferred, or remain in ending inventory.
57
58
59
Product cost report
60
61
Direct materials Conversion costs
62
Beginning inventory
63
64
Current
Total costs to account for
$
65
66
Total equivalent units
67
68
Average cost/equivalent unit
69
70
Where do the costs go?
71
72
Completed/transferred:
73
74
75
Cost of goods manufactured
Ending inventory:
76
77
78
79
Cost of ending inventory
Total costs allocated
80
81
82
83
84
85
Department 2 Fw of units and equivalent units calculation
January 2019 Production
8 c
87
Where do the units go?
Equivalent units
Where do the units come from?
88
Direct materials % work done
% work done
Conversion costs
89
Beginning inventory
Started
Completed/transferred
$
90
Ending inventory
91
$
$
Total
Total
92
93
Beginning inventory will be completed and transferred, and units started may either be completed and transferred, or remain in ending inventory.
94
RE
Product cost report
Direct materials Conversion costs
Beginning inventory
Current
Total costs to account for
Total equivalent units
Average cost/equivalent unit
Where do the costs go?
Completed/transferred:
Direct materials
Conversion costs
Cost of goods manufactured
Ending inventory:
Direct materials
Conversion costs
$
Cost of ending inventory
Total costs allocated

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