accounts to show the flow of costs in the system. Any difference between actual and app should be debited or credited to Cost of Goods Sold. (Do not round "cost per unit" calcu mediate calculations to the nearest whole dollar.) Work in Process 875,500 Beg. bal. ork: Transferred out: 310,900 1,390,000 From current work: ion End. bal. 2,576.400

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Chapter1: Financial Statements And Business Decisions
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Required:
Prepare T-accounts to show the flow of costs in the system. Any difference between actual and applied overhead for
the period should be debited or credited to Cost of Goods Sold. (Do not round "cost per unit" calculations and round
other intermediate calculations to the nearest whole dollar.)
Work in Process
Finished Goods
Beg. bal.
Current work:
Materials
Conversion
875,500
Beg. bal.
Transferred out:
310,900
1,390,000
From current work:
End. bal.
End. bal.
2,576.400
Cost of Goods Sold
Beg. bal.
End. bal.
Transcribed Image Text:Required: Prepare T-accounts to show the flow of costs in the system. Any difference between actual and applied overhead for the period should be debited or credited to Cost of Goods Sold. (Do not round "cost per unit" calculations and round other intermediate calculations to the nearest whole dollar.) Work in Process Finished Goods Beg. bal. Current work: Materials Conversion 875,500 Beg. bal. Transferred out: 310,900 1,390,000 From current work: End. bal. End. bal. 2,576.400 Cost of Goods Sold Beg. bal. End. bal.
Vermont Company uses continuous processing to produce stuffed bears and FIFO process costing to account for its
production costs. it uses FIFO because costs are quite unstable due to the volatile price of fine materials it uses in
production. The bears are processed through one department.
Overhead is applied on the basis of direct labor costs, and the application rate has not changed over the period
covered by the problem. The Work-in-Process Inventory account showed the following balances at the start of the
current period.
Direct
materials
Direct
labor
$138, 000
295,000
Overhead
applied
442, 500
These costs were related to 59,000 units that were in process at the start of the period.
During the period, 67,000 units were transferred to finished goods inventory. Of the units finished during this period, 70
percent were sold. After units have been transferred to finished goods inventory, no distinction is made between the
costs to complete beginning work-in-process inventory and the costs of goods started and completed in work in
process this period.
The equivalent units for materials this period were 64,000 (using FIFO). Of these, 12.800 were equivalent units with
respect to materials in the ending work-in-process inventory. Materials costs incurred during the period totaled
$310,900.
Conversion costs of $1.390.000 were charged this period for 69,500 equivalent units (using FIFO). The ending
Inventory consisted of 25,500 equivalent units of conversion costs. The actual manufacturing overhead for the period
was $730,000.
Transcribed Image Text:Vermont Company uses continuous processing to produce stuffed bears and FIFO process costing to account for its production costs. it uses FIFO because costs are quite unstable due to the volatile price of fine materials it uses in production. The bears are processed through one department. Overhead is applied on the basis of direct labor costs, and the application rate has not changed over the period covered by the problem. The Work-in-Process Inventory account showed the following balances at the start of the current period. Direct materials Direct labor $138, 000 295,000 Overhead applied 442, 500 These costs were related to 59,000 units that were in process at the start of the period. During the period, 67,000 units were transferred to finished goods inventory. Of the units finished during this period, 70 percent were sold. After units have been transferred to finished goods inventory, no distinction is made between the costs to complete beginning work-in-process inventory and the costs of goods started and completed in work in process this period. The equivalent units for materials this period were 64,000 (using FIFO). Of these, 12.800 were equivalent units with respect to materials in the ending work-in-process inventory. Materials costs incurred during the period totaled $310,900. Conversion costs of $1.390.000 were charged this period for 69,500 equivalent units (using FIFO). The ending Inventory consisted of 25,500 equivalent units of conversion costs. The actual manufacturing overhead for the period was $730,000.
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