Cost of production summaries, three departments; departmental cost work sheet; journal entries; statement of cost of goods manufactured}

Toledo Manufacturing Company manufactures a cement sealing compound called Ultra-Seal. The process requires that the product pass through three departments. in Department 1, all materials are put into production at the beginning of the process; in Department 2, materials are put into production evenly throughout the process; and in Department 3, all materials are put into production at the end of the process. In each department, it is assumed that the labor and factory overhead are applied evenly throughout the process.

At the end of January, the production reports for the month show the following:

{Required:}
1. Prepare a cost of production summary for each department for January, using the average cost method.
2. Prepare a departmental cost work sheet for January. (Hint: See Chapter 5 to review.)

3. Make the required journal entries to record the January operations.
4. Prepare a statement of cost of goods manufactured for the month ended January 31.

Transcribed Image Text:

Started in process... Received from prior department Finished and transferred Finished and on hand Work in process, end of month Stage of completion Dept. 1 Dept. 2 Dept. 3 50,000 40,000 30,000 40,000 30,000 28,000 5,000 10,000 5,000 2,000 1/2 1/4 3/4 The cost summary for January shows the following: Materials ........ Labor Factory overhead Dept. 1 Dept. 2 Dept. 3 $22,500 $23,200 $19,600 7,200 14,500 11,800 10,800 14,500 8,850 $40,500 $52,200 $40,250