Pittsburgh Aluminum Company uses a process cost system to record the costs of manufacturing rolled aluminum, which consists of the smelting and rolling processes. Materials are entered from smelting at the beginning of the rolling process. The inventory of Work in Process—Rolling on September 1 and debits to the account during September were as follows:Bal., 2,600 units, ¼ completed:Direct materials (2,600 × $15.50)                                      $40,300Conversion (2,600 × ¼ × $8.50)                                           5,525                                                                                          $45,825From Smelting Department, 28,900 units                         462,400Direct labor                                                                       158,920Factory overhead                                                              101,402During September, 2,600 units in process on September 1 were completed, and of the 28,900 units entering the department, all were completed except 2,900 units that were 4⁄5 completed.Charges to Work in Process—Rolling for October were as follows:From Smelting Department, 31,000 units                   $511,500Direct labor                                                                   162,850Factory overhead                                                          104,494During October, the units in process at the beginning of the month were completed, and of the 31,000 units entering the department, all were completed except 2,000 units that were 2⁄5 completed.Instructions1. Enter the balance as of September 1 in a four-column account for Work in Process— Rolling. Record the debits and credits in the account for September. Construct a cost of production report and present computations for determining(a) equivalent units of production for materials and conversion; (b) cost per equivalent unit; (c) cost of goods finished, differentiating between units started in the prior period and units started and finished in September; and (d) work in process inventory.2. Provide the same information for October by recording the October transactions in the four-column work in process account. Construct a cost of production report and present the October computations (a through d) listed in part (1).3. Comment on the change in costs per equivalent unit for August throughOctober for direct materials and conversion cost.

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

Pittsburgh Aluminum Company uses a process cost system to record the costs of manufacturing rolled aluminum, which consists of the smelting and rolling processes. Materials are entered from smelting at the beginning of the rolling process. The inventory of Work in Process—Rolling on September 1 and debits to the account during September were as follows:
Bal., 2,600 units, ¼ completed:
Direct materials (2,600 × $15.50)                                      $40,300
Conversion (2,600 × ¼ × $8.50)                                           5,525
                                                                                          $45,825
From Smelting Department, 28,900 units                         462,400
Direct labor                                                                       158,920
Factory overhead                                                              101,402
During September, 2,600 units in process on September 1 were completed, and of the 28,900 units entering the department, all were completed except 2,900 units that were 4⁄5 completed.
Charges to Work in Process—Rolling for October were as follows:
From Smelting Department, 31,000 units                   $511,500
Direct labor                                                                   162,850
Factory overhead                                                          104,494
During October, the units in process at the beginning of the month were completed, and of the 31,000 units entering the department, all were completed except 2,000 units that were 2⁄5 completed.

Instructions
1. Enter the balance as of September 1 in a four-column account for Work in Process— Rolling. Record the debits and credits in the account for September. Construct a cost of production report and present computations for determining
(a) equivalent units of production for materials and conversion; (b) cost per equivalent unit; (c) cost of goods finished, differentiating between units started in the prior period and units started and finished in September; and (d) work in process inventory.
2. Provide the same information for October by recording the October transactions in the four-column work in process account. Construct a cost of production report and present the October computations (a through d) listed in part (1).
3. Comment on the change in costs per equivalent unit for August through
October for direct materials and conversion cost.

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 9 steps with 8 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
  • SEE MORE 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