Question
Cold Spring Company produces premium bottled water. In the second department, the Bottling Department, conversion costs are incurred evenly throughout the bottling process, but packaging
Cold Spring Company produces premium bottled water. In the second department, the Bottling Department, conversion costs are incurred evenly throughout the bottling process, but packaging materials are not added until the end of the process. Costs in Beginning work in process inventory include transferred in costs of $3,600 and conversion costs of
$2,781. February data for the Bottling Department follow:
Cool Spring Company | ||||||
Work in Process InventoryBottling | ||||||
Month Ended February 28, 2011 | ||||||
|
| Physical |
|
| Physical |
|
|
| Units | Dollars |
| Units | Dollars |
| Beginning inventory, January 31 (60% complete) | 6,000 | $6,381 | Transferred out | 161,000 | $ ? |
| Production started: |
|
|
|
|
|
| Transferred in | 168,000 | 100,800 |
|
|
|
| Direct materials |
| 35,420 |
|
|
|
| Conversion costs: |
|
|
|
|
|
| Direct labor |
| 30,720 |
|
|
|
| Manufacturing overhead |
| 19,230 |
|
|
|
| Total to account for | 174,000 | 192,551 |
|
|
|
| Ending inventory, February 28 (70% complete) | 13,000 | $ ? |
|
|
|
Requirements
1. | Draw a time line. |
2. | Compute the Bottling Department equivalent units for the month of February. Use the FIFO method. |
3. | Compute the cost per equivalent unit for February. |
4. | Assign the costs to units completed and transferred out and to Ending inventory. |
5. | Prepare the journal entry to record the cost of units completed and transferred out. |
6. | Post all transactions to the Work in process inventorylong dashBottling Department T-account. What is the ending balance? |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started