Cool Company has two departments: Fermenting and Packaging. Direct materials are added at the beginning of fermenting process. Conversion costs are added evenly throughout the process. Data from the June for the Fermenting Department (first department) are as follows: Gallons Beginning work in process inventory Started production 9100 gallons Completed and transferred out to packaging in June 7900 gallons Ending work in process inventory (80% of the way through fermenting process 1200 gallons Costs Beginning work in process inventory $0 Cost added during June Direct Materials $9.828 Direct Labor $3.500 Manufacturing Overhead $3.588 Requirements: 1. Draw a timeline for the Fermenting department 2. Compute equivalent units for direct materials and for conversion costs. 3. Compute cost per equivalent units 4. Compute total cost of the units completed and transferred out to the Packaging department and ending work in process inventory of the Fermenting department. 5. Prepare the journal entries to record the assignment of direct materials and direct labor and allocation of manufacturing overhead to the Fermenting department. Also prepare the journal entry to record the cost of gallons completed and transferred out to the Packaging department. 6. Show the Work in process inventory-Fermenting Department T-account.
Cool Company has two departments: Fermenting and Packaging. Direct materials are added at the beginning of fermenting process. Conversion costs are added evenly throughout the process. Data from the June for the Fermenting Department (first department) are as follows: Gallons Beginning work in process inventory Started production 9100 gallons Completed and transferred out to packaging in June 7900 gallons Ending work in process inventory (80% of the way through fermenting process 1200 gallons Costs Beginning work in process inventory $0 Cost added during June Direct Materials $9.828 Direct Labor $3.500 Manufacturing Overhead $3.588 Requirements: 1. Draw a timeline for the Fermenting department 2. Compute equivalent units for direct materials and for conversion costs. 3. Compute cost per equivalent units 4. Compute total cost of the units completed and transferred out to the Packaging department and ending work in process inventory of the Fermenting department. 5. Prepare the journal entries to record the assignment of direct materials and direct labor and allocation of manufacturing overhead to the Fermenting department. Also prepare the journal entry to record the cost of gallons completed and transferred out to the Packaging department. 6. Show the Work in process inventory-Fermenting Department T-account.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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cool company has two departments fermenting and packaging
Transcribed Image Text:Cool Company has two departments: Fermenting and Packaging. Direct materials are added at the beginning of fermenting process. Conversion costs are added
evenly throughout the process. Data from the June for the Fermenting Department (first department) are as follows:
Gallons
Beginning work in process inventory
Started production
9100 gallons
Completed and transferred out to packaging in
June
7900 gallons
Ending work in process inventory (80% of the
way through fermenting process
1200 gallons
Costs
Beginning work in process inventory
$0
Cost added during June
Direct Materials
$9.828
Direct Labor
$3.500
Manufacturing Overhead
$3.588
Requirements:
1. Draw a timeline for the Fermenting department
2. Compute equivalent units for direct materials and for conversion costs.
3. Compute cost per equivalent units
4. Compute total cost of the units completed and transferred out to the Packaging department and ending work in process inventory of the Fermenting
department.
5. Prepare the journal entries to record the assignment of direct materials and direct labor and allocation of manufacturing overhead to the Fermenting
department. Also prepare the journal entry to record the cost of gallons completed and transferred out to the Packaging department.
6. Show the Work in process inventory-Fermenting Department T-account.
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