Kensington Corp. makes gourmet brownies. Brownies are produced in a three-stage process. In the Baking Department, the raw materials for the brownies are mixed, poured into large trays, and baked. In the Finishing Department, frosting is applied to the brownies and they are sliced while still in the baking trays. Finally, in the Packing Department, the brownies are divided into smaller packages containing 12 brownies per package and prepared for shipping. Kensington has tracked the following information for the Baking and Finishing Departments during October 2019:

The beginning inventory in the Finishing Department included \($350\) of transferred-in costs from the Baking Department incurred during September, \($25\) of materials, and \($80\) of conversion costs. During October, the Finishing Department incurred \($1,075\) for materials and \($4,221\) for conversion costs. The Finishing Department’s
beginning inventory was estimated to be 60% complete, and the ending inventory was estimated to be 20% complete. The frosting (the only new materials added in the Finishing Department) is added when the brownies are 25% through the production process.
One purpose of this comprehensive problem is to illustrate a more realistic example of how costs flow through a process with multiple departments or processes. Therefore, because this problem focuses on the second of three departments (the Finishing Department), we must consider transferred-in costs in addition to the direct materials costs and conversion costs incurred in the current department. Transferred-in costs merely
represent the costs transferred from one department to the next and are therefore considered 100% complete as they are carried forward to the next department. In this problem, the costs incurred in the Baking Department stay with the trays of baked brownies as they come into the Finishing Department. The 100 trays in the beginning
inventory (transferred in during September) carried \($350\) of costs from the Baking department, whereas the units transferred in during October carried \($18,200\) of costs from the Baking Department.
Required
1. Assuming Kensington uses the weighted average cost flow assumption, prepare the October product cost
report for the Finishing Department. Be sure to include your equivalent units calculations.
2. Give the journal entry to transfer completed brownies from the Finishing Department to the Packing
Department.

Transcribed Image Text:

Baking Finishing Trays in beginning inventory.. Trays started/transferred in. 200 100 5,100 ? Trays in ending inventory 100 300 Total cost of brownies transferred out in October. $18,200 ?