ACC 232 CH 3 Case Study (process costing) based on CS-1 in MAP workbook pp 64-65 updated for 22FAL NAME Note to students regarding the ACC 232 case studies: prepare your work using the data provided in this file. Do not use the data and information given in the AME workbook. These case studies are updated and changed frequently. As always, use the text end-of-chapter Review Exercise and Solution to practice and prepare for case study work. GIVEN = gray and black YOUR WORK = blue CS-1 Information provided: Diana Company uses process costing to accumulate costs. There is no beginning inventory. The finishing department of Diana Company had the following production results for the month of February: Number of standard chairs produced during the month of February Direct materials cost incurred Direct labor hours paid Direct labor hourly rate Manufacturing overhead as a percentage of direct labor cost Part a) Calculate the conversion costs incurred during the month of February. Materials Labor Overhead 50,000 $ 18,000 2,700 $ 12.00 150% $18,000 2700*12 $32,400 32400 * 150% $48,600 Total Conv. Cost $99,000 Part b) Prepare a cost of production report using the following information. Units completed and transferred out Units left in ending inventory Conversion costs completed Direct materials are completed at the beginning of the manufacturing process. Diana Company Cost of Production Report For the month ended February 28 35,000 15,000 75% Unit Calculations: Direct Materials Whole Units % Equivalent Completed Conversion Equivalent Units _ Inputs ..... Beginning Cutting Inventory Add Current Equals _ Outputs ... Add Ending Total Month Production Completed Transfer Out WIP Inventory Total Outputs 50,000 50,000 35,000 100% 100% 15,000 75% 50,000 50,000 35,000 11,250 38,750 ...........Inputs.......... .......... Outputs.......... Beginning Add Cutting Current Equals Total Cost Cost Calculations: Inventory Month of Production Cost of Production Per Unit Subtract Direct Materials Units Direct Materials Costs $ 50,000 18,000 $ 50,000 18,000 $ Completed Transfer Out 35,000 = Ending WIP Inventory Check Total Outputs 15,000 = Total Inputs 50,000 0.29 Conversion Units: Direct Labor Manufacturing Overhead Total Conversion Cost Total Part c) Refer to the cost of production report in part b. What are the cost per equivalent unit with respect to direct materials and conversion costs, the total costs transferred out to finished goods inventory, and the value of inventory at the end of February? Cost per equivalent unit - direct materials Cost per equivalent unit - conversion costs Total costs transferred out to finished goods Total inventory at the end of February Part d) Refer to the cost of production report in part b. Provide the journal entry to record direct materials, direct labor and manufacturing overhead. Also provide the journal entry to record the transfer of goods out of WIP and into finished goods inventory. Please use February 28th or 29th of the current year for the date of your journal entries. Date 1 Direct Material Costs Direct Labor Costs Manuf. Overhead Costs WIP Inventory A/C Finished Goods A/C Account Title and Explanation Debit Credit X x X X X