Recycle Industries of Toronto recycles galvanized steel from automobile bodies in two processes: shredding and degalvanizing. It processes galvanized steel auto bodies in the shredding process and send the shredded steel to the newly developed degalvanizing process which removes zinc by electrolysis. Zinc, which has a relatively high value, is the principal product of the process. The company transferred 6,000 metric tons of steel to the devalvanizing process this month. Neither process had any spoilage. Because the galvanized steel is homogeneous and shredded in a continuous process, the company uses a process-costing accounting system to assign costs to it. The following information is available for the degalvanizing process during the last year.   RECYCLE INDUSTRIES, INC Degalvanizing Process Last Year         Degalvanizing Process         Units Shredding Process Costs Direct Materials Conversion Costs Physical flow (metric tons)                Beginning inventory…………………….. 1,000   60% complete 75% complete      Ending inventory…………………………. 2,700   80% complete 45% complete      Transferred in……………………………… 6,000       Cost incurred                Beginning inventory…………………………………….  $   7,100,000 $      600,000 $     420,000      Current costs…………………………………..………….    43,200,000       2,500,000       6,475,000   Required Prepare a production cost report for the degalvanizing process using weighted-average costing. What journal entry would be made after preparing the production cost report for the degalvanizing process?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Recycle Industries of Toronto recycles galvanized steel from automobile bodies in two processes: shredding and degalvanizing. It processes galvanized steel auto bodies in the shredding process and send the shredded steel to the newly developed degalvanizing process which removes zinc by electrolysis. Zinc, which has a relatively high value, is the principal product of the process. The company transferred 6,000 metric tons of steel to the devalvanizing process this month. Neither process had any spoilage.

Because the galvanized steel is homogeneous and shredded in a continuous process, the company uses a process-costing accounting system to assign costs to it. The following information is available for the degalvanizing process during the last year.

 

RECYCLE INDUSTRIES, INC

Degalvanizing Process Last Year

 

 

 

 

Degalvanizing Process

 

 

 

 

Units

Shredding

Process

Costs

Direct

Materials

Conversion

Costs

Physical flow (metric tons)

 

 

 

 

 

     Beginning inventory……………………..

1,000

 

60% complete

75% complete

     Ending inventory………………………….

2,700

 

80% complete

45% complete

     Transferred in………………………………

6,000

 

 

 

Cost incurred

 

 

 

 

 

     Beginning inventory…………………………………….

 $   7,100,000

$      600,000

$     420,000

     Current costs…………………………………..………….

   43,200,000

      2,500,000

      6,475,000

 

Required

  1. Prepare a production cost report for the degalvanizing process using weighted-average costing.
  2. What journal entry would be made after preparing the production cost report for the degalvanizing process?
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