McCallum Tool Company has two departments, assembly and finishing. The assembly department takes purchased parts and assembles the final product. The finishing department performs testing, adds other materials, and packages the product. Direct materials are added at the end of the process in the finishing department. The following summarizes the finishing department's operations for the month of July. Work-in-process, July 1, 50% complete for conversion costs Transferred in during July Completed during July Work-in-process, July 31, 50% complete for conversion costs Work-in-process, July 1 (transferred-in costs, $20,000; conversion costs, $32,385) Transferred in from assembly department during July Direct materials added during July Conversion added during July Total to account for Number of Units 5,000 30,000 29,000 6,000 1. Equivalent units of transferred-in, direct materials, and conversion. 2. Equivalent unit costs for transferred-in costs, direct materials, and conversion. Costs $ 52,385 198,750 116,000 111,615 $ 478,750 Required: Calculate each of the following amounts for the finishing department using the weighted-average process costing method, and then prepare the requested journal entries. 3. Cost of goods completed and transferred out during July. 4. Cost of Work-in-process inventory at July 31. 5. Prepare the journal entries for direct materials, direct labor, overhead, and finished product for July, assuming that direct labor is 50% of conversion cost.
McCallum Tool Company has two departments, assembly and finishing. The assembly department takes purchased parts and assembles the final product. The finishing department performs testing, adds other materials, and packages the product. Direct materials are added at the end of the process in the finishing department. The following summarizes the finishing department's operations for the month of July. Work-in-process, July 1, 50% complete for conversion costs Transferred in during July Completed during July Work-in-process, July 31, 50% complete for conversion costs Work-in-process, July 1 (transferred-in costs, $20,000; conversion costs, $32,385) Transferred in from assembly department during July Direct materials added during July Conversion added during July Total to account for Number of Units 5,000 30,000 29,000 6,000 1. Equivalent units of transferred-in, direct materials, and conversion. 2. Equivalent unit costs for transferred-in costs, direct materials, and conversion. Costs $ 52,385 198,750 116,000 111,615 $ 478,750 Required: Calculate each of the following amounts for the finishing department using the weighted-average process costing method, and then prepare the requested journal entries. 3. Cost of goods completed and transferred out during July. 4. Cost of Work-in-process inventory at July 31. 5. Prepare the journal entries for direct materials, direct labor, overhead, and finished product for July, assuming that direct labor is 50% of conversion cost.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Concept explainers
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.
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Transcribed Image Text:McCallum Tool Company has two departments, assembly and finishing. The assembly department takes purchased parts and
assembles the final product. The finishing department performs testing, adds other materials, and packages the product. Direct
materials are added at the end of the process in the finishing department. The following summarizes the finishing department's
operations for the month of July.
Work-in-process, July 1, 50% complete for conversion costs
Transferred in during July
Completed during July
Work-in-process, July 31, 50% complete for conversion costs
Work-in-process, July 1 (transferred-in costs, $20,000; conversion costs, $32,385)
Transferred in from assembly department during July
Direct materials added during July
Conversion added during July
Total to account for
Number of
Units
5,000
30,000
29,000
6,000
1. Equivalent units of transferred-in, direct materials, and conversion.
2. Equivalent unit costs for transferred-in costs, direct materials, and conversion.
Costs
$ 52,385
198,750
116,000
111,615
$ 478,750
Required:
Calculate each of the following amounts for the finishing department using the weighted-average process costing method, and then
prepare the requested journal entries.
3. Cost of goods completed and transferred out during July.
4. Cost of Work-in-process inventory at July 31.
5. Prepare the journal entries for direct materials, direct labor, overhead, and finished product for July, assuming that direct labor is
50% of conversion cost.
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