AccuBlade Castings Inc. casts blades for turbine engines. Within the Casting Department, alloy is first melted in a crucible, then poured into molds to produce the castings. On May 1, there were 360 pounds of alloy in process, which were 60% complete as to conversion. The Work in Process balance for these 360 pounds was $55,800, determined as follows:

1	Direct materials (360 $146)	$52,560.00
2	Conversion (360 60% $15)	3,240.00
3		$55,800.00

During May, the Casting Department was charged $462,000 for 3,000 pounds of alloy and $23,792 for direct labor. Factory overhead is applied to the department at a rate of 150% of direct labor. The department transferred out 3,160 pounds of finished castings to the Machining Department. The May 31 inventory in process was 15% complete as to conversion.

Required:

a1.	On May 1, prepare the journal entry for the Casting Department for the materials charged to production.*
a2.	On May 31, prepare the journal entry for the Casting Department for the conversion costs charged to production.*
a3.	On May 31, prepare the journal entry for the Casting Department for the completed production transferred to the Machining Department.*
	*Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
b.	Determine the Work in Process-Casting Department May 31 balance.
c.	Compute and evaluate the change in the costs per equivalent unit for direct materials and conversion from the previous month (April).

Chart of Accounts

CHART OF ACCOUNTS

AccuBlade Castings Inc.

General Ledger

	ASSETS
110	Cash
121	Accounts Receivable
125	Notes Receivable
126	Interest Receivable
131	Materials-Alloy
132	Materials-Steel
141	Work in Process-Casting Department
142	Work in Process-Machining Department
151	Factory Overhead
161	Finished Goods
171	Supplies
172	Prepaid Insurance
173	Prepaid Expenses
181	Land
191	Factory
192	Accumulated Depreciation-Factory

	LIABILITIES
210	Accounts Payable
221	Utilities Payable
231	Notes Payable
236	Interest Payable
251	Wages Payable

	EQUITY
311	Common Stock
340	Retained Earnings
351	Dividends

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Goods Sold
520	Wages Expense
531	Selling Expense
532	Insurance Expense
533	Utilities Expense
534	Supplies Expense
540	Administrative Expense
561	Depreciation Expense-Factory
590	Miscellaneous Expense
710	Interest Expense

Journal

a1. On May 1, prepare the journal entry for the Casting Department for the materials charged to production. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2

a2. On May 31, prepare the journal entry for the Casting Department for the conversion costs charged to production. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3

a3. On May 31, prepare the journal entry for the Casting Department for the completed production transferred to the Machining Department. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2

Final Questions

b. Determine the Work in Process-Casting Department May 31 balance.

c. Compute and evaluate the change in the costs per equivalent unit for direct materials and conversion from the previous month (April).

	Cost per Equivalent Unit
Change in materials	Increase
Change in conversion	Increase