Chapter 5, Problem 5.23AE

Analyze flow of costs through inventory T-accounts (Learning Objective 1)

Golden Sun Bakery mass-produces bread using three sequential processing departments: Mixing, Baking, and Packaging. The following transactions occurred during April:

1. Direct materials used in the Packaging Department	$ 34,000
2. Costs assigned to units completed and transferred out of Mixing	$227,000
3. Direct labor incurred in the Mixing Department	$ 11,400
4. Beginning balance: Work in Process Inventory—Baking	$15,800
5 Manufacturing overhead allocated to the Baking Department	$ 78,000
6. Beginning balance: Finished Goods	$ 4,600
7 Costs assigned to units completed and transferred out of Baking	$308,000
8. Beginning balance: Work in Process Inventory—Mixing	$ 12,100
9. Direct labor incurred in the Packaging Department	$ 8,900
10. Manufacturing overhead allocated to the Mixing Department	$68,000
11. Direct materials used in the Mixing Department	$156,000
12. Beginning balance: Raw Materials Inventory	$ 23,200
13. Costs assigned to units completed and transferred out of Packaging	$385,000
14. Beginning balance: Work in Process Inventory—Packaging	$ 8,000
15. Purchases of Raw Materials	$179,000
16. Direct labor incurred in the Baking Department	$4,200
17. Manufacturing overhead allocated to the Packaging Department	$40,000
18. Cost of goods sold	$386,000

Note: No direct materials were used by the Baking Department.

Requirements

1. 1. Post each of these transactions to the company’s inventory T-accounts. You should set up separate T-accounts for the following:
   • Raw Materials Inventory
   • Work in Process Inventory—Mixing Department
   • Work in Process Inventory—Baking Department
   • Work in Process Inventory—Packaging Department
   • Finished Goods Inventory
2. 2. Determine the balance at month end in each of the inventory accounts.
3. 3. Assume that 3,025,000 loaves of bread were completed and transferred out of the Packaging Department during the month. What was the cost per unit of making each loaf of bread (from start to finish)?