Cost Flows Lamont Company produced 80,000 machine parts for diesel engines. There were no beginning or ending workinprocess inventories in any department. Lamont incurred the following costs for May: Molding Grinding Finishing Department Department Department Direct materials $13,000 $5,400 $8,000 Direct labor 10,000 8,500 12,000 Applied overhead 17,000 14,000 12,000 Required: 1. Calculate the costs transferred out of each department. > Costs Transferred Out Molding $- J Grinding $- J Finishing $- J 2. Prepare the journal entries corresponding to these transfers. Also, prepare the journal entry for Grinding that reflects the costs added to the transferredin goods received from Molding. For a compound transaction, if an amount box does not require an entry, leave it blank. Transfer entries: Work in Process-Grinding V J J Work in Process-Molding V J J Work in Process-Finishing V J 67,900 J \\Alr'yll :r. nnr'nr'r'r' I'd-5.431.- _ . I (-1 nnn . I 2. Prepare the journal entries corresponding to these transfers. Also, prepare the journal entry for Grinding that reects the costs added to the transferredin goods received from Molding. For a compound transaction, if an amount box does not require an entry, leave it blank. Transfer entries: Work in ProcessGrindin V V 40,000 V Work in ProcessMo|ding V V 40,000 V Work in ProcessFinishing V V 67,900 V Work in ProcessGrinding V V 67,900 V Finished Goods V V 99,900 V Work in ProcessFinishing V V 99,900 V > Cost-added entry (Grinding only): Work in ProcessGrindin V V 32,000 X V Materials V V V 5,400 V Payroll v / ~/ 8,500 V Overhead Control V V V 32,000 X 3. What ifthe Grinding Department had an ending WIP of $11,000? Calculate the cost transferred out. $-X Provide the journal entry that would reflect this transfer. Workin Process-Finishing V V 57 00 X Work in Process-Grinding V V Work in ProcessMo|ding V J 40,000 J Work in ProcessFinishing V J 67,900 J Work in ProcessGrinding V J 67,900 J Finished Goods V J 99,900 J Work in Process-Finishing V J 99,900 J Costadded entry (Grinding only): Work in ProcessGrindin V J 32,000 X J Materials V J J 5,400 J Payroll V J J 8,500 J Overhead Control V J J 32,000 X 3. What if the Grinding Department had an ending WIP of $11,000? Calculate the cost transferred out. $-X Provide the journal entry that would reflect this transfer. Work in Process-Finishing V J X Work in ProcessGrinding V J 57,900 X What is the effect on finished goods calculated in Requirement 1, assuming the other two departments have no ending WIP? Decreased V J by $ 11,000 J