Fen Furnishings produces brass handles for the furniture industry in a four-stage process -Mixing, Moulding, Polishing and Packaging. Costs incurred in the Polishing Department during January are summarized as follows: WIP - Polishing Process A/C January 1 Bal. Transfer from Moulding 20,000 1,310,000 391,600 638,000 307,400 Direct Materials Added Direct Labour Manufacturing Overhead Normal losses are estimated to be 2%% of input during the period. Inspection takes place during the processing operation, at which point damaged handles are separated from good handles and sold as scrap to local furniture manufacturers at $85 each. At inspection, 2,000 handles were rejected as scrap. These units had reached the following degree of completion: Transfer from Moulding 100% Direct material added 40% Conversion costs 20% Work-in-progress at the end of January was 4,000 handles and had reached the following degree of completion: Transfer from Moulding 100% Direct material added 80% Conversion costs 50% Direct materials added and conversion costs are incurred uniformly throughout the process. Required: (d) Prepare the journal entries for the: • assignment of direct materials, direct labour incurred and the manufacturing overhead applied to the Polishing Process * cost of the units completed and transferred out to the Packaging Process (e) Given that 30% of the unexpected losses were as a result of pilferage, calculate Fen Furnishings true loss associated with the Polishing Process.
Fen Furnishings produces brass handles for the furniture industry in a four-stage process -Mixing, Moulding, Polishing and Packaging. Costs incurred in the Polishing Department during January are summarized as follows: WIP - Polishing Process A/C January 1 Bal. Transfer from Moulding 20,000 1,310,000 391,600 638,000 307,400 Direct Materials Added Direct Labour Manufacturing Overhead Normal losses are estimated to be 2%% of input during the period. Inspection takes place during the processing operation, at which point damaged handles are separated from good handles and sold as scrap to local furniture manufacturers at $85 each. At inspection, 2,000 handles were rejected as scrap. These units had reached the following degree of completion: Transfer from Moulding 100% Direct material added 40% Conversion costs 20% Work-in-progress at the end of January was 4,000 handles and had reached the following degree of completion: Transfer from Moulding 100% Direct material added 80% Conversion costs 50% Direct materials added and conversion costs are incurred uniformly throughout the process. Required: (d) Prepare the journal entries for the: • assignment of direct materials, direct labour incurred and the manufacturing overhead applied to the Polishing Process * cost of the units completed and transferred out to the Packaging Process (e) Given that 30% of the unexpected losses were as a result of pilferage, calculate Fen Furnishings true loss associated with the Polishing Process.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Fen Furnishings produces brass handles for the furniture industry in a four-stage process -Mixing, Moulding,
Polishing and Packaging. Costs incurred in the Polishing Department during January are summarized as follows:
WIP - Polishing Process A/C
January 1 Bal.
Transfer from Moulding
20,000
1,310,000
391,600
638,000
307,400
Direct Materials Added
Direct Labour
Manufacturing Overhead
Normal losses are estimated to be 24% of input during the period. Inspection takes place during the processing
operation, at which point damaged handles are separated from good handles and sold as scrap to local furniture
manufacturers at $85 each.
At inspection, 2,000 handles were rejected as scrap. These units had reached the following degree of completion:
Transfer from Moulding
100%
Direct material added
40%
Conversion costs
20%
Work-in-progress at the end of January was 4,000 handles and had reached the following degree of completion:
Transfer from Moulding
100%
Direct material added
80%
Conversion costs
50%
Direct materials added and conversion costs are incurred uniformly throughout the process.
Required:
(d)
Prepare the journal entries for the:
*assignment of direct materials, direct labour incurred and the manufacturing overhead applied to
the Polishing Process
" cost of the units completed and transferred out to the Packaging Process
(e)
Given that 30% of the unexpected losses were as a result of pilferage, calculate Fen Furnishings true
loss associated with the Polishing Process.
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