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 700 pounds of alloy in process, which were 60 complete as to conversion The Work in Process balance for these 700 pounds was $85,820, determined as follows Direct materials (700 x $110) $77,000 Conversion (700 x 60 x $21) 8,820 $85,820 During May, the Casting Department was charged $699,600 for 6,600 pounds of alloy and $52,640 for direct labor Factory overhead is applied to the department at a rate of 150 of direct labor The department transferred out 6,800 pounds of finished castings to the Machining Department The May 31 inventory in process was 40 complete as to conversion a1 Prepare the May journal entry for the Casting Department for the materials charged to production Cash Factory Overhead Casting Department Factory Overhead Materials Alloy Work in Process Casting Department Work in Process Machining Department Cash Factory Overhead Materials Alloy Wages Payable Work in Process Casting Department Work in Process Machining Department Feedback a1 Remember there are three different areas of inventory materials, work in process, and finished goods a2 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 Round all amounts to the nearest whole dollar Cash Factory Overhead Finished Goods Wages Expense Work in Process Casting Department Work in Process Machining Department Accounts Receivable Cash Materials Wages Payable Work in Process Casting Department Work in Process Machining Department Accounts Payable Cash Factory Overhead Finished Goods Work in Process Casting Department Work in Process Machining Department Feedback a2 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 a3 Prepare the May journal entry for the Casting Department for the completed production transferred to the Machining Department Round all amounts to the nearest whole dollar Cash Factory Overhead Finished Goods Materials Work in Process Casting Department Work in Process Machining Department Cash Factory Overhead Finished Goods Materials Work in Process Casting Department Work in Process Machining Department Feedback a3 Are these goods ready for finished goods inventory or do these units need to be transferred to another department first b Determine the Work in ProcessCasting Department May 31 balance $ c Compute the change in The rate used to allocate costs between completed and partially completed production costs per equivalent unit for direct materials and conversion from the previous month (April) Cost per Equivalent Unit Change in materials Decrease Increase $ Change in conversion Decrease Increase $

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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,

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 700 pounds of alloy in process, which were 60% complete as to conversion. The Work in Process balance for these 700 pounds was $85,820, determined as follows:

Direct materials (700 x $110)	$77,000
Conversion (700 x 60% x $21)	8,820
	$85,820

During May, the Casting Department was charged $699,600 for 6,600 pounds of alloy and $52,640 for direct labor. Factory overhead is applied to the department at a rate of 150% of direct labor. The department transferred out 6,800 pounds of finished castings to the Machining Department. The May 31 inventory in process was 40% complete as to conversion.

a1. Prepare the May journal entry for the Casting Department for the materials charged to production.

	Cash Factory Overhead-Casting Department Factory Overhead Materials-Alloy Work in Process-Casting Department Work in Process-Machining Department
	Cash Factory Overhead Materials-Alloy Wages Payable Work in Process-Casting Department Work in Process-Machining Department

Feedback

a1. Remember there are three different areas of inventory; materials, work in process, and finished goods.

a2. 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. Round all amounts to the nearest whole dollar.

	Cash Factory Overhead Finished Goods Wages Expense Work in Process-Casting Department Work in Process-Machining Department
	Accounts Receivable Cash Materials Wages Payable Work in Process-Casting Department Work in Process-Machining Department
	Accounts Payable Cash Factory Overhead Finished Goods Work in Process-Casting Department Work in Process-Machining Department

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a2. 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?

a3. Prepare the May journal entry for the Casting Department for the completed production transferred to the Machining Department. Round all amounts to the nearest whole dollar.

	Cash Factory Overhead Finished Goods Materials Work in Process-Casting Department Work in Process-Machining Department
	Cash Factory Overhead Finished Goods Materials Work in Process-Casting Department Work in Process-Machining Department

Feedback

a3. Are these goods ready for finished goods inventory or do these units need to be transferred to another department first?

b. Determine the Work in ProcessCasting Department May 31 balance. $

c. Compute the change in The rate used to allocate costs between completed and partially completed production.costs per equivalent unit for direct materials and conversion from the previous month (April).