Cornerstone Exercise 6.1 Cost Flows Lamont Company produced 80,000 machine parts for diesel engines. There were no beginning or ending work-in-process inventories in any department. Lamont incurred the following costs for May: Molding Department Grinding Department Finishing Department Direct materials $13,000 $ 5,200 $ 8,000 Direct labor 10,000 17,000 8,800 14,000 12,000 11,000 Applied overhead Required: 1. Calculate the costs transferred out of each department. 2. Prepare the journal entries corresponding to these transfers. Also, prepare the journal entry for Grinding that reflects the costs added to the transferred-in goods received from Molding. 3. What if the Grinding Department had an ending WIP of $12,000? Calculate the cost trans- ferred out and provide the journal entry that would reflect this transfer. What is the effect on finished goods calculated in Requirement 1, assuming the other two departments have no ending WIP?

Cornerstone Exercise 6.1 Cost Flows Lamont Company produced 80,000 machine parts for diesel engines. There were no beginning or ending work-in-process inventories in any department. Lamont incurred the following costs for May: Molding Department Grinding Department Finishing Department Direct materials $13,000 $ 5,200 $ 8,000 Direct labor 10,000 17,000 8,800 14,000 12,000 11,000 Applied overhead Required: 1. Calculate the costs transferred out of each department. 2. Prepare the journal entries corresponding to these transfers. Also, prepare the journal entry for Grinding that reflects the costs added to the transferred-in goods received from Molding. 3. What if the Grinding Department had an ending WIP of $12,000? Calculate the cost trans- ferred out and provide the journal entry that would reflect this transfer. What is the effect on finished goods calculated in Requirement 1, assuming the other two departments have no ending WIP?

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Description: Cornerstone Exercise 6.1 Cost FlowsLamont Company produced 80,000 machine parts for diesel engines. There were no beginningor ending work-in-process inventories in any department. Lamont incurred the following costsfor May:MoldingDepartmentGrindingD

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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