Cost Flows

Lamont Company produced 80,000 machine parts for diesel engines. There were no beginning or ending work-in-process inventories in any department. Lamont incurred the following costs for May:

		Molding Department		Grinding Department		Finishing Department
Direct materials		$13,000		$5,400		$8,000
Direct labor		10,000		8,800		12,000
Applied overhead		17,000		15,000		11,000

Required:

1. Calculate the costs transferred out of each department. Costs Transferred Out Molding Grinding Finishing 2. Prepare the journal entries corresponding to these transfers. Also, prepare the journal entry for Grinding that reflects the costs added to the transferred-in goods received from Molding. For a compound transaction, if an amount box does not require an entry, leave it blank. Transfer entries: Cost-added entry (Grinding only): lll lll 3. What if the Grinding Department had an ending WIP of $11,000? Calculate the cost transferred out. Provide the journal entry that would reflect this transfer. What is the effect on finished goods calculated in Requirement 1, assuming the other two departments have no ending WIP? by $