Kaeding Company is a manufacturer of car seats. Each car seat passes through the assembly department and testing department. This problem focuses on the testing department. Direct materials are added when the testing department process is 90% complete. Conversion costs are added evenly during the testing department's process. As work in assembly is completed, each unit is immediately transferred to testing. As each unit is completed in testing, it is immediately transferred to Finished Goods. Kaeding Company uses the weighted-average method of process costing. Data for the testing department for October 2017 are as follows.
- X Testing department data Physical Units Transferred-In Direct Conversion (Car Seats) Costs Materials Costs Work in process, October 19 8,100 $2,937,000 $0 $1,087,730 Transferred in during October 2017 ? Completed during October 2017 30,300 Work in process, October 31b 4,300 Total costs added during October 2017 $9,311,400 $11,211,000 $4,641,590 a Degree of completion: transferred-in costs, ?%; direct materials, ?%; conversion costs, 80%. bDegree of completion: transferred-in costs, ?%; direct materials, ?%; conversion costs, 70%. Requirement 1. What is the percentage of completion for (a) transferred-in costs and direct materials in beginning work-in-process inventory and (b) transferred-in costs and direct materials in ending work-in-process inventory? Transferred-in costs Direct materials (a) Beginning work-in-process inventory (b) Ending work-in-process inventory Requirement 2. For each cost category, compute equivalent units in the testing department. Show physical units in the first column of your schedule. (For amounts with a 0 balance, make sure to enter "0" in the appropriate cell.) Equivalent Units Transferred-in Direct Conversion Physical Units Costs Materials Costs Work in process, beginning Transferred in during current period To account for Completed and transferred out during current period Work in process, ending Accounted for Equivalent units of work done to date Requirement 3. For each cost category, summarize total testing department costs for October 2017, calculate the cost per equivalent unit, and assign costs to units completed (and transferred out) and to units in ending work in process. Begin by summarizing the total costs to account for. (For amounts with a 0 balance, make sure to enter "O" in the appropriate cell.) Total Transferred-in Direct Conversion Production Costs Costs Materials Costs Total costs to account for Calculate the cost per equivalent unit for transferred-in costs, direct materials, and conversion costs. Transferred-in Direct Conversion Costs Materials Costs Divide by Cost per equivalent unit Assign total costs to units completed (and transferred out) and to units in ending work in process. (For amounts with a 0 balance, make sure to enter "0" in the appropriate cell.) Total Transferred-in Direct Conversion Production Costs Costs Materials Costs Assignment of costs: Completed and transferred out Work in process, ending Total costs to account for Requirement 4. Prepare journal entries for October transfers from the assembly department to the testing department and from the testing department to Finished Goods. (Record debits first, then credits. Exclude explanations from any journal entries.) Begin by recording the transfer from the assembly department to the testing department. Journal Entry Date Accounts Debit Credit Now record the transfer from the testing department to Finished Goods. Journal Entry Date Accounts Debit Credit
