Question
Eire Products is a specialty lubricants company. The Lake Plant produces a single product in three departments: Filtering, Blending, and Packaging. Additional materials are added
Eire Products is a specialty lubricants company. The Lake Plant produces a single product in three departments: Filtering, Blending, and Packaging. Additional materials are added in the Blending Process when units are 50 to 55 percent complete with respect to conversion. Information for operations in June in the Blending process appear as follows.
Work in process on June 1 consisted of 9,000 barrels with the following costs.
| Amount | Degree of completion |
|
|
Filtering costs transferred in | $ 11,700 | 100% |
|
|
Cost added in Blending |
|
|
|
|
Direct materials | $ - | 0% |
|
|
Conversion costs | $ 18,335 | 30% |
|
|
Work in process June 1 | $ 30,035 |
|
|
|
|
|
|
|
|
During June, 116,000 barrels were transferred in from Filtering at a cost of $150,800. The following costs were added in Blending in June.
Directmaterials | $ 387,500 |
Conversioncosts | $ 538,265 |
Totalcostsadded | $ 925,765 |
Blending finished 115,000 barrels in June and transferred them to Packaging. At the end of June, there were 10,000 barrels in work-in-process inventory. The units were 60 percent complete with respect to conversion costs. The Blending Department uses FIFO method of process costing.
Required: 1. Prepare a cost of production report for Blending department for June.
2. Journal entries for (1) T/I cost; (2) DM used; (3) CC allocated; (4) units completed
T-accounts of WIP- Blending
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started