Crafty Paint prepares and packages paint products. Crafty Paint has two departments Blending and Packaging Direct mails are added at the beginning of the blending process (yes) and at the end of the packaging process cana) Data from the month of May for the Binding Department are as follows Click to conto view the data from May May Crafty Pant completed the fofowing production cost report for a londing Department for month of (Click the coon to view the ignment of Conversion coets are added every roughout each process. The company to the weighted average method Read the requirements Requirement Prepare the journal entries to record the augment of direct materials and direct labor and the location of manufacturing overhead to the ending Depariert. Also prepare the journal entry to record the cost of the gallons completed and transferred out to the Packaging Department stume labor couls are served and not yet puid (Record debes frst, the credits to explains tomary Journalist Deon with the mal entry to record the woman of orect materials to the Blending Department Do not record the malment el direct obor or the vocation of andecturing overned with the entry we will proses separately in the following Date Accounts Debit Credit May 31 Gallons O gallons 9,900 gallons 5,800 gallons 4,100 gallons Beginning Work-in-Process Inventory Started in production Completed and transferred out to Packaging in May Ending Work-in-Process Inventory (30% of the way through the blending process) Costs Beginning Work-in-Process Inventory Costs added during May: Direct materials Direct labor $ 0 4,950 1,912 900 Manufacturing overhead allocated $ 7,762 Total costs added during May Total Costs 0 7,762 Crafty Paint Production Cost Report - Blending Department (Partial) Month Ended May 31 Direct Conversion COSTS Materials Costs Costs to account for: Beginning work-in-process $ 0 $ 0 $ Costs added during the period 4,950 2,812 Total costs to account for 4,950 2,812 Divided by: Total EUP 9,900 7,030 Cost per equivalent unit $ 0.50 $ 0.40 Costs accounted for: Completed and transferred out $ 2,900 $ 2,320 $ Ending work-in-process 2,050 492 Total costs accounted for 4,950 $ 2,812 $ 7,762 5,220 2,542 7,762 Il Requirements 1. Prepare the journal entries to record the assignment of direct materials and direct labor and the allocation of manufacturing overhead to the Blending Department. Also, prepare the journal entry to record the costs of the gallons completed and transferred out to the Packaging Department. Assume labor costs are accrued and not yet paid. 2. Post the journal entries to the Work-in-Process Inventory-Blending T-account. What is the ending balance? 3. What is the average cost per gallon transferred out of the Blending Department into the Packaging Department? Why would the company managers want to know this cost
