PART 2 Michael's Pottery makes decorative garden pieces using three consecutive processes: Moulding, Baking & Spraying. Quality control check takes place during the process, at which point, rejected units are separated from good units. The following details relate to production for the month of October 2020, for the Baking Department. Work-in process, October 1: 0 Transfer from Moulding: 2,000 units valued at $336.40 each Other manufacturing costs incurred during October: $202,120 $212,840 $306,160 Direct material added Direct Manufacturing Wages Manufacturing Overhead Applied iv) Normal losses are estimated to be 5% of the units transferred in during the period. Losses from the Baking Department are deemed to be scrap and sold at $382 each. At inspection 300 decorative pieces were rejected as scrap. These units had reached the following degree of completion: From Moulding 100% Direct material added 40% Conversion costs 12MN vi) 1,200 pieces were completed and transferred out to the Spraying Department. vil) Work-in-process at the end of October had reached the following degree of completion: From Moulding 100% Direct material added 70% Conversion costs 55%

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question
PART 2
Michael's Pottery makes decorative garden pieces using three consecutive processes: Moulding, Baking &
Spraying. Quality control check takes place during the process, at which point, rejected units are separated from
good units.
The following details relate to production for the month of October 2020, for the Baking Department.
Work-in-process, October 1: -0-
i)
Transfer from Moulding: 2,000 units valued at $336.40 each
Other manufacturing costs incurred during October:
$202,120
$212,840
Direct material added
Direct Manufacturing Wages
Manufacturing Overhead Applied
$306,160
iv)
Normal losses are estimated to be 5% of the units transferred in during the period. Losses from the
Baking Department are deemed to be scrap and sold at $382 each.
v)
At inspection 300 decorative pieces were rejected as scrap. These units had reached the following
degree of completion:
From Moulding
100%
Direct material added
40%
Conversion costs
12%%
vi)
1,200 pieces were completed and transferred out to the Spraying Department.
vil)
Work-in-process at the end of October had reached the following degree of completion:
From Moulding
Direct material added
100%
70%
Conversion costs
55%
Direct materials added and conversion costs are incurred uniformly throughout the process.
Required:
(a)
Prepare a statement of equivalent production to determine the equivalent units for direct materials
(From Moulding & Direct Material Added), and conversion costs and the cost per equivalent nit for
direct materials and conversion costs.
(b)
Calculate the:
- Total cost of units completed and transferred to the Spraying Department
Cost of abnormal losses
Cost of ending work-in-process inventory in the Baking Department
(c)
Prepare Michael Pottery's Work-in-Process Inventory - Baking Department T-account, clearly showing
the ending balance.
(d)
State the journal entries necessary to record the assignment of direct materials, direct manufacturing
wages and manufacturing overhead applied to the Baking Department. Also give the journal entries to
record the cost of goods completed and transferred to the Spraying Department.
Given that 25% of the unexpected losses were because of pilferage, prepare the abnormal spoilage
statement, clearly showing Michael Pottery's true loss.
(e)
Transcribed Image Text:PART 2 Michael's Pottery makes decorative garden pieces using three consecutive processes: Moulding, Baking & Spraying. Quality control check takes place during the process, at which point, rejected units are separated from good units. The following details relate to production for the month of October 2020, for the Baking Department. Work-in-process, October 1: -0- i) Transfer from Moulding: 2,000 units valued at $336.40 each Other manufacturing costs incurred during October: $202,120 $212,840 Direct material added Direct Manufacturing Wages Manufacturing Overhead Applied $306,160 iv) Normal losses are estimated to be 5% of the units transferred in during the period. Losses from the Baking Department are deemed to be scrap and sold at $382 each. v) At inspection 300 decorative pieces were rejected as scrap. These units had reached the following degree of completion: From Moulding 100% Direct material added 40% Conversion costs 12%% vi) 1,200 pieces were completed and transferred out to the Spraying Department. vil) Work-in-process at the end of October had reached the following degree of completion: From Moulding Direct material added 100% 70% Conversion costs 55% Direct materials added and conversion costs are incurred uniformly throughout the process. Required: (a) Prepare a statement of equivalent production to determine the equivalent units for direct materials (From Moulding & Direct Material Added), and conversion costs and the cost per equivalent nit for direct materials and conversion costs. (b) Calculate the: - Total cost of units completed and transferred to the Spraying Department Cost of abnormal losses Cost of ending work-in-process inventory in the Baking Department (c) Prepare Michael Pottery's Work-in-Process Inventory - Baking Department T-account, clearly showing the ending balance. (d) State the journal entries necessary to record the assignment of direct materials, direct manufacturing wages and manufacturing overhead applied to the Baking Department. Also give the journal entries to record the cost of goods completed and transferred to the Spraying Department. Given that 25% of the unexpected losses were because of pilferage, prepare the abnormal spoilage statement, clearly showing Michael Pottery's true loss. (e)
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 7 images

Blurred answer
Knowledge Booster
Costing Systems
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education