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 $500$ pounds of alloy in process, which were $40\%$ complete as to conversion. The Work in Process balance for these $500$ pounds was $$44,200,$ determined as follows:

Direct materials $(500\backslash$times $$80)$ $$40,000$

Conversion $(500\backslash$times $40\%\backslash$times $$21)4,200$

$$44,200$

During May, the Casting Department was charged $$357,200$ for $4,700$ pounds of alloy and $$38,200$ for direct labor. Factory overhead is applied to the department at a rate of $150\%$ of direct labor. The department transferred out $4,900$ pounds of finished castings to the Machining Department. The May $31$ inventory in process was $25\%$ complete as to conversion.

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

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Work in Process$-$Casting Department

$357,200$

Materials$-$Alloy

$357,200$

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a$1.$ Remember there are three different areas of inventory; materials, work in process, and finished goods.

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a$2.$ Prepare the May journal 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

$95,500$

Wages Payable

$38,200$

Factory Overhead

$57,300$

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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?

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a$3.$ Prepare the May journal 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.

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Work in Process$-$Machining Department

Work in Process$-$Casting Department

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

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

$fill in the blank f$423$e$205$df$9$bfa$2\_1$

c$.$ Compute the change in the costs per equivalent unit for direct materials and conversion from the previous month $($April$).$

Cost per Equivalent Unit

Change in materials

$fill in the blank f$423$e$205$df$9$bfa$2\_3$

Change in conversion

fill in the blank f$423$e$205$df$9$bfa$2\_5$

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b$.$ How many units are still in process at the end of the period?

c$.$ Compare the materials and conversion costs per equivalent unit for April and May. The April costs per equivalent unit are determined from the May $1$ work in process inventory.

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Partially correct

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