Cost of Production and Journal Entries Lighthouse Paper Company manufactures newsprint. The product is manufactured in two departments, Papermaking and Converting. Pulp is first placed into a vessel at the beginning of papermaking production. The following information concerns production in the Papermaking Department for March. Account Work in Process—Papermaking Department Account No. Date Item Debit Credit Balance Debit Credit Mar. 1 Bal., 7,100 units, 70% completed 8,520 31 Direct materials, 37,900 units 75,800 84,320 31 Direct labor 22,750 107,070 31 Factory overhead 12,791 119,861 31 Goods transferred, 42,300 units ? ? 31 Bal., 2,700 units, 80% completed ? a1. Prepare the March journal entry for the Papermaking Department for the materials charged to production. Work in Process-Papermaking Department fill in the blank 75c7f3fce063fe1_2 Materials-Pulp fill in the blank 75c7f3fce063fe1_4 a2. Prepare the March journal entry for the Papermaking Department for the conversion costs charged to production. If an amount box does not require an entry, leave it blank. Work in Process-Papermaking Department fill in the blank 2edc77f74ff0032_2 fill in the blank 2edc77f74ff0032_3 Wages Payable fill in the blank 2edc77f74ff0032_5 fill in the blank 2edc77f74ff0032_6 Factory Overhead-Papermaking Department fill in the blank 2edc77f74ff0032_8 fill in the blank 2edc77f74ff0032_9 a3. Prepare the March journal entry for the Papermaking Department for the completed production transferred to the Converting Department. If required, round your interim calculations to two decimal places and your final answer to the nearest dollar. fill in the blank 3ec10808d037060_2 fill in the blank 3ec10808d037060_4 b. Determine the Work in Process—Papermaking Department March 31 balance. If required, round your interim calculations to two decimal places and your final answer to the nearest dollar. $fill in the blank a5f32a03707d057_1
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Cost of Production and Journal Entries
Lighthouse Paper Company manufactures newsprint. The product is manufactured in two departments, Papermaking and Converting. Pulp is first placed into a vessel at the beginning of papermaking production. The following information concerns production in the Papermaking Department for March.
| Account Work in Process—Papermaking Department | Account No. | ||||||||
| Date | Item | Debit | Credit | Balance | |||||
| Debit | Credit | ||||||||
| Mar. | 1 | Bal., 7,100 units, 70% completed | 8,520 | ||||||
| 31 | Direct materials, 37,900 units | 75,800 | 84,320 | ||||||
| 31 | Direct labor | 22,750 | 107,070 | ||||||
| 31 | Factory overhead | 12,791 | 119,861 | ||||||
| 31 | Goods transferred, 42,300 units | ? | ? | ||||||
| 31 | Bal., 2,700 units, 80% completed | ? |
a1. Prepare the March
| Work in Process-Papermaking Department | fill in the blank 75c7f3fce063fe1_2 | ||
| Materials-Pulp | fill in the blank 75c7f3fce063fe1_4 |
a2. Prepare the March journal entry for the Papermaking Department for the conversion costs charged to production. If an amount box does not require an entry, leave it blank.
| Work in Process-Papermaking Department | fill in the blank 2edc77f74ff0032_2 | fill in the blank 2edc77f74ff0032_3 | |
| Wages Payable | fill in the blank 2edc77f74ff0032_5 | fill in the blank 2edc77f74ff0032_6 | |
| Factory Overhead-Papermaking Department | fill in the blank 2edc77f74ff0032_8 | fill in the blank 2edc77f74ff0032_9 |
a3. Prepare the March journal entry for the Papermaking Department for the completed production transferred to the Converting Department. If required, round your interim calculations to two decimal places and your final answer to the nearest dollar.
| fill in the blank 3ec10808d037060_2 | |||
| fill in the blank 3ec10808d037060_4 |
b. Determine the Work in Process—Papermaking Department March 31 balance. If required, round your interim calculations to two decimal places and your final answer to the nearest dollar.
$fill in the blank a5f32a03707d057_1
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
