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

blank

Work in Process$-$Casting Department

$350,000$

Materials$-$Alloy

$350,000$

Feedback Area

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.

blankAccountDebitCredit

blank

Work in Process$-$Casting Department

$49,600$

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

blank

Work in Process$-$Machining Department

Work in Process$-$Casting Department

Feedback Area

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$$

$32,179$

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$$