Cheetah Accessories uses four departments to produce handles for kitchen cabinets: Formingrequires mixing the raw materials, Moulding, Spraying and Drying. After leaving the DryingDepartment, the handles are packaged and sent to the Finished Goods warehouse for shipment toretail outlets.The following data relates to the Spraying Department for the month of June:During the month, 2,000 handles valued at $275 each were transferred from the MoldingDepartment to the Spraying Department.Other production costs incurred during the month are summarized as follows:Direct Materials AddedDirect Manufacturing WagesManufacturing Overhead$171,000$425,600$205,200Process inspection occurs during the process and normally no losses are expected at this stage.However, during the month 200 handles were rejected at inspection. Rejected units from thisdepartment are sold as scrap at $400 each. These units had reached the following degree ofcompletion:Transfer from Moulding 100%Direct material added 80%Conversion costs 50%During June, 1,400 handles were completed, packaged and transferred to Finished Goods. Work-in-progress at the end of June had reached the following degree of completion:Transfer from Moulding 100%Materials added 60%Conversion costs 40% Materials added and conversion costs are incurred uniformly throughout each process.There were no incomplete units in the Spraying Department at the beginning of the period. Required: (1)Post all transactions to the Work in Process Inventory – Spraying Department T-account.What is the ending balance? (2) Prepare the journal entries for the use of total direct materials, direct labour incurred,manufacturing overhead applied and the cost of the units completed and transferred out tothe Drying Process. (3) Given that 25% of the unexpected losses were as a result of pilferage, calculate ChromeAccessories true loss for the Spraying Department.
Cheetah Accessories uses four departments to produce handles for kitchen cabinets: Forming
requires mixing the raw materials, Moulding, Spraying and Drying. After leaving the Drying
Department, the handles are packaged and sent to the Finished Goods warehouse for shipment to
retail outlets.
The following data relates to the Spraying Department for the month of June:
During the month, 2,000 handles valued at $275 each were transferred from the Molding
Department to the Spraying Department.
Other production costs incurred during the month are summarized as follows:
Direct Materials Added
Direct Manufacturing Wages
Manufacturing
$171,000
$425,600
$205,200
Process inspection occurs during the process and normally no losses are expected at this stage.
However, during the month 200 handles were rejected at inspection. Rejected units from this
department are sold as scrap at $400 each. These units had reached the following degree of
completion:
Transfer from Moulding 100%
Direct material added 80%
Conversion costs 50%
During June, 1,400 handles were completed, packaged and transferred to Finished Goods.
Work-in-progress at the end of June had reached the following degree of completion:
Transfer from Moulding 100%
Materials added 60%
Conversion costs 40%
Materials added and conversion costs are incurred uniformly throughout each process.
There were no incomplete units in the Spraying Department at the beginning of the period.
Required:
(1)
What is the ending balance?
(2) Prepare the
manufacturing overhead applied and the cost of the units completed and transferred out to
the Drying Process.
(3) Given that 25% of the unexpected losses were as a result of pilferage, calculate Chrome
Accessories true loss for the Spraying Department.
Step by step
Solved in 5 steps
