Chapter 18, Problem 18.2EX

Flowchart of accounts related to service and processing departments

Alcoa Inc. is the world’s largest producer of aluminum products. One product that Alcoa manufactures is aluminum sheet products for the aerospace industry. The entire output of the Smelting Department is transferred to the Rolling Department Part of the fully processed goods from the Rolling Department are sold as rolled sheet, and the remainder of the goods are transferred to the Converting Department for further processing into sheared sheet

Prepare a chart of the flow of costs from the processing department accounts into the finished goods accounts and then into the cost of goods sold account. The relevant accounts are as follows:

Cost of Goods Sold	Finished Goods—Rolled Sheet
Materials	Finished Goods—Sheared Sheet
Factory Overhead—Smelting Department	Work in Process—Smelting Department
Factory Overhead—Rolling Department	Work in Process—Rolling Department
Factory Overhead—Converting Department	Work in Process—Converting Department