Cost of Production and Journal Entries

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 $230$ pounds of alloy in process, which were $60\%$ complete as to conversion. The Work in Process balance for these $230$ pounds was $$32,844,$ determined as follows:

Line Item Description Amount

Direct materials $(230\backslash$times $$132)$ $$30,360$

Conversion $(230\backslash$times $60\%\backslash$times $$18)2,484$

Total $$32,844$

During May, the Casting Department was charged $$350,000$ for $2,500$ pounds of alloy and $$19,840$ for direct labor. Factory overhead is applied to the department at a rate of $150\%$ of direct labor. The department transferred out $2,530$ pounds of finished castings to the Machining Department. The May $31$ inventory in process was $44\%$ complete as to conversion.

Question Content Area

a$1.$ Journalize the May entry for the Casting Department for the materials charged to production. If an amount box does not require an entry, leave it blank.

blankAccountDebitCredit

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Work in Process$-$Casting Department

Materials$-$Alloy

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Feedback

a$1.$ Remember there are three different areas of inventory; Materials, Work in Process, and Finished Goods.

Question Content Area

a$2.$ Journalize the May entry for the Casting Department for the conversion costs charged to production. If an amount box does not require an entry, leave it blank.

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Work in Process$-$Casting Department

Wages Payable

Factory Overhead

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Feedback

a$2.$ Remember that a Work in Process account accumulates all costs $($Direct Materials, Direct Labor, Manufacturing Overhead$)$ that are added to the units in a given department. What types of costs are considered conversion costs?

Question Content Area

a$3.$ Journalize the May entry for the Casting Department for the completed production transferred to the Machining Department. If an amount box does not require an entry, leave it blank.

blankAccountDebitCredit

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Work in Process$-$Machining Department

Work in Process$-$Casting Department

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Feedback

a$3.$ Are these goods ready for finished goods inventory or do these units need to be transferred to another department first?

Question Content Area

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

fill in the blank $1$ of $1$$

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

Line Item Description Increase or Decrease Amount

Change in materials fill in the blank $1$ of $4$

Increased

fill in the blank $2$ of $4$$

Change in conversion fill in the blank $3$ of $4$

Increased

fill in the blank $4$ of $4$$