1. Halls Exteriors produces exterior siding for homes. The Preparation Department begins with wood, which is chopped into small bits. At the end of the process, an adhesive is added. Then the wood/adhesive mixture goes on to the Compression Department, where the wood is compressed into sheets. Conversion costs are added evenly throughout the preparation process. January data for the Preparation Department are as follows (in millions):

Requirements

R1. Draw a time line for the Preparation Department.

R2. Use the time line to help you compute the equivalent. (Hint: Each direct material added at a different point in the production process requires its own equivalent unit computation.)

R3. Compute the total costs of the units (sheets)

a. Completed and transferred out to the Compression Department.

b. In the Preparation Departments Ending work in process inventory.

R4. Prepare the journal entry to record the cost of the sheets completed and transferred out to the Compression Department.

R5. Post the journal entries to the Work in process inventoryPreparation T-account. What is the ending balance?

Sheets Cons leginning woerk in process inventory Started production Completed and transferred out to 0 sheets Beginning work in process inventory 0 3,600 sheets Costs adding during January 2664 ,337 Compression in Janeary 1,910 sheets Direst labor Manifacturing overhead Ending work in process inventory 40% of the way through preparanon peocess) 1,490 sheets Total costs 6,587