Vermont Company uses continuous processing to produce stuffed bears and FIFO process costing to account for its production costs. It uses FIFO because costs are quite unstable due to the volatile price of fine materials it uses in production. The bears are processed through one department. Overhead is applied on the basis of direct labor costs, and the application rate has not changed over the perlod covered by the problem. The Work-in-Process Inventory account showed the following balances at the start of the current perlod. Direct materials $133, 000 Direct labor 270, ee0 Overhead applied 378, eee These costs were related to 54,000 units that were in process at the start of the perlod. During the perlod, 62,000 units were transferred to finished goods Inventory. Of the units finished during this period, 80 percent were sold. After units have been transferred to finished goods Inventory, no distinction is made between the costs to complete beginning work-in-process inventory and the costs of goods started and completed in work in process this period. The equivalent units for materials this perlod were 54,000 (using FIFO). Of these, 10,800 were equivalent units with respect to materials in the ending work-in-process inventory. Materials costs incurred during the perlod totaled $303,400. Converslon costs of S1.290,000 were charged this perfod for 64,500 equivalent units (using FIFO). The ending Inventory consisted of 23,000 equivalent units of converslon costs. The actual manufacturing overhead for the perlod was $680,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Question

For this question I have to prepare T-accounts to show the flow of costs. (Any difference between actual and applied overhead for the period should be debited or credited to Cost of Goods Sold.) I tried a few times but kept getting the format of where and what numbers go on which side. PLease see the pictures for more info and the given T-account format.

In the given T-account each blue outlined box has a drop down menu with the given options:

Conversion
From beginning inventory
From finished goods
Materials
Overapplied overhead
To cost of goods sold
Transferred in
Transferred out
Underapplied overhead

Work in Process
Finished Goods
Beg. bal.
Beg. bal.
Current work:
Transferred out:
From current work:
End. bal.
End, bal.
Cost of Goods Sold
Beg. bal.
End. bal.

Vermont Company uses continuous processing to produce stuffed bears and FIFO process costing to account for Its production costs.
It uses FIFO because costs are quite unstable due to the volatile price of fine materlals it uses in production. The bears are processed
through one department.
Overhead is applied on the basis of direct labor costs, and the application rate has not changed over the perlod covered by the
problem. The Work-In-Process Inventory account showed the following balances at the start of the current perlod.
Direct materials
$133,000
270, 000
378,000
Direct labor
Overhead applied
These costs were related to 54,000 units that were In process at the start of the perlod.
During the perlod, 62,000 units were transferred to finished goods inventory. Of the units finished during this period, 80 percent were
sold. After units have been transferred to finished goods Inventory, no distinction Is made between the costs to complete beginning
work-in-process inventory and the costs of goods started and completed in work in process this period.
The equivalent units for materials this perlod were 54,000 (using FIFO). Of these, 10,800 were equlvalent units with respect to
materials in the ending work-in-process inventory. Materlals costs incurred during the period totaled $303,400.
Conversion costs of $1,290,000 were charged this period for 64,500 equivalent units (using FIFO). The ending Inventory consisted of
23,000 equlvalent unlts of conversion costs. The actual manufacturing overhead for the perlod was $680,000.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

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