Cost of production summaries, three departments; departmental cost work sheet; jour-

LO₁ nal entries; statement of cost of goods manufactured Columbus Manufacturing Company manufactures a cement sealing compound called Plugit. The process requires that the product pass through three departments.

In Dept. I , all materials are put into production at the beginning of the process; in Dept. 2, materials are put into production evenly throughout the process; and in Dept. 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:

Dept. I Dept. 2 Dept. 3 Started in process. 50,000 Received from prior department. 40,000 30,000 Finished and transferred. 40,000 30,000 28,000 Finished and on hand.... 5,000 Work in process, end of month. 10,000 5,000 2,000 Stage of completion.. 1/2 1/4 3/4 The cost summary for January shows the following: Materials... Labor Factory overhead Dept. I 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