10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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AccountingQ&A LibraryPrepare the necessary report together with a detailed schedule of ending work in process inventory; make journal entries to indicate the costs put to production and the departmental transfer. The Precision Products Company manufactures a single product being used for heavy industrial machineries. It operates on 3 shifts under 2 departments, Cutting Dept and Smoothing Dept. Materials are added to the product in each department; however, the number of units produced are not increased in the process. The following records for each department were obtained from the books of Precision Products Company for the month of January, 2019. Cutting Department Smoothing Department Work in process, January 1, 2019 Units transferred from preceding department 80,000 Units started in production 100,000 Units completed and transferred out 80,000 60,000 Units in process, January 31 20,000 18,000 Units spoiled in production 2,000 Spoiled units are 50% complete as to materials, labor, and overhead. Its cost is treated as a separate cost elements in the department where the spoilage occurs. Spoiled units have no recoverable value. Percentage of completion of units in process on January 31,2019 follows: Cutting Department Smoothing Department Materials 100% 100% Labor 60% 80% Overhead 20% 40% The following charges were indicated in the cost records for the month of January, 2019: Cutting Department Smoothing Department Materials 300,000 118,500 Labor 184,000 203,580 Overhead 100,800 75,020 Required: Cost of Production Report

Prepare the necessary report together with a detailed schedule of ending work in process inventory; make journal entries to indicate the costs put to production and the departmental transfer. The Precision Products Company manufactures a single product being used for heavy industrial machineries. It operates on 3 shifts under 2 departments, Cutting Dept and Smoothing Dept. Materials are added to the product in each department; however, the number of units produced are not increased in the process. The following records for each department were obtained from the books of Precision Products Company for the month of January, 2019. Cutting Department Smoothing Department Work in process, January 1, 2019 Units transferred from preceding department 80,000 Units started in production 100,000 Units completed and transferred out 80,000 60,000 Units in process, January 31 20,000 18,000 Units spoiled in production 2,000 Spoiled units are 50% complete as to materials, labor, and overhead. Its cost is treated as a separate cost elements in the department where the spoilage occurs. Spoiled units have no recoverable value. Percentage of completion of units in process on January 31,2019 follows: Cutting Department Smoothing Department Materials 100% 100% Labor 60% 80% Overhead 20% 40% The following charges were indicated in the cost records for the month of January, 2019: Cutting Department Smoothing Department Materials 300,000 118,500 Labor 184,000 203,580 Overhead 100,800 75,020 Required: Cost of Production Report

Question

Prepare the necessary report together with a detailed schedule of ending work in process inventory; make journal entries to indicate the costs put to production and the departmental transfer.

The Precision Products Company manufactures a single product being used for heavy industrial machineries. It operates on 3 shifts under 2 departments, Cutting Dept and Smoothing Dept. Materials are added to the product in each department; however, the number of units produced are not increased in the process.

The following records for each department were obtained from the books of Precision Products Company for the month of January, 2019.

Cutting Department

Smoothing Department

Work in process, January 1, 2019

Units transferred from preceding department

80,000

Units started in production

100,000

Units completed and transferred out

80,000

60,000

Units in process, January 31

20,000

18,000

Units spoiled in production

2,000

Spoiled units are 50% complete as to materials, labor, and overhead. Its cost is treated as a separate cost elements in the department where the spoilage occurs. Spoiled units have no recoverable value.

Percentage of completion of units in process on January 31,2019 follows:

Cutting Department

Smoothing Department

Materials

100%

Labor

60%

80%

Overhead

20%

40%

The following charges were indicated in the cost records for the month of January, 2019:

Cutting Department

Smoothing Department

Materials

300,000

118,500

Labor

184,000

203,580

Overhead

100,800

75,020

Required: Cost of Production Report

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