COST ACCOUNTING

Organic Sugar Company at Ohio has six processing departments for refining sugar: Affination, Carbonatation, Decolorization, Boiling, Recovery, and Packaging. Conversion costs are added evenly throughout each process. Data from the month of August for the Decolorization Department are as follows:

	Metric Tons
Beginning Work-in-Process Inventory	0
Transferred in production	12,500
Completed and transferred out to Boiling in August	8,000
Ending Work-in-Process Inventory	4,500

	Costs
Beginning Work-in-Process Inventory	$ 0
Costs added during August:
Transferred-in cost	1,500,000
Direct materials	2,500,000
Direct labor	1,250,000
Manufacturing overhead	716,500
Total costs added during August	$4,375,000

The ending Work-in-Process Inventory is 100% and 65% complete with respect to direct materials and conversion costs, respectively.

Requirements:

1. Draw a timeline for the Decolorization Department
2. Compute equivalent units.
3. Compute cost per equivalent units
4. Compute total cost of the units completed and transferred out to the Boiling department and ending work in process inventory of the Decolorization department.
5. Prepare the journal entries to record the assignment of direct materials and direct labor and allocation of manufacturing overhead to the Decolorization department. Also prepare the journal entry to record the cost of gallons completed and transferred out to the Boiling department.
6. Show the Work in process inventory- Decolorization Department T-account.