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. Number of Units 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 4,000 28,000 27,000 5,000 Costs Work-in-process, July 1 (transferred-in costs, $50,000; conversion costs, $30,125) Transferred in from assembly department during July Direct materials added during July Conversion added during July $ 80,125 150,000 60,750 110,000 Total to account for $ 400,875 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. 1. Equivalent units of transferred-in, direct materials, and conversion. 2. Equivalent unit costs for transferred-in costs, direct materials, and conversion. 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. Number of Units 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 4,000 28,000 27,000 5,000 Costs Work-in-process, July 1 (transferred-in costs, $50,000; conversion costs, $30,125) Transferred in from assembly department during July Direct materials added during July Conversion added during July $ 80,125 150,000 60,750 110,000 Total to account for $ 400,875 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. 1. Equivalent units of transferred-in, direct materials, and conversion. 2. Equivalent unit costs for transferred-in costs, direct materials, and conversion. 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
Problem 1Q
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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.
Number of
Units
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
4,000
28,000
27,000
5,000
Costs
Work-in-process, July 1 (transferred-in costs, $50,000; conversion
costs, $30,125)
Transferred in from assembly department during July
Direct materials added during July
Conversion added during July
$ 80,125
150,000
60,750
110,000
$ 400,875
Total to account for
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.
1. Equivalent units of transferred-in, direct materials, and conversion.
2. Equivalent unit costs for transferred-in costs, direct materials, and conversion.
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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