Page 3 Teton Toy Company manufactures toy sea lions in four sequential processes. The sea lion is a new remote control toy that will be available for Christmas this year. An internal computer in the sea lion makes the toy swim, walk and talk. The owner can program phrases into the computer memory. The Fourth process is the last step before the sea lions are transferred to the warehouse as finished irktentory. All material needed to complete the sea lions is added at the 70 percent stage of completion in the Fourth Process. Teton accumulated the following cost information for the Fourth process during the month of April: Summary of Units Beginning Work in Process (75% complete as to conversion costs).................................................-40,000 Units transferred in from the third process during April Units completed and transferred to finished goods.... Ending work in Process (50% as to conversion costs)...............................................................- 140,000 130,000 Summary of Costs Beginning Work in Process: ($960,000 transferred-in costs, $215,000 direct materials, & $445,000 conversion costs). $1,620,000 1,740,000 Cost of units transferred in from the third process Manufacturing costs incurred in April: Direct materials.... 1,280,000 .. 1,125,000 375.000 $7.140,000 Factory overhead Total costs to account for Instructions: a. Prepare a cost of production report for the month of April. b. Prepare journal entries to record: (1) Transfer of the 140,000 units from the Third Process into the Fourth process. (2) Manufacturing costs charged to the Fourth Process during April (3) Transfer of the completed units from the Fourth Process to the finished goods warehouse Page 3 Teton Toy Company manufactures toy sea lions in four sequential processes. The sea lion is a new remote control toy that will be available for Christmas this year. An internal computer in the sea lion makes the toy swim, walk and talk. The owner can program phrases into the computer memory. The Fourth process is the last step before the sea lions are transferred to the warehouse as finished irktentory. All material needed to complete the sea lions is added at the 70 percent stage of completion in the Fourth Process. Teton accumulated the following cost information for the Fourth process during the month of April: Summary of Units Beginning Work in Process (75% complete as to conversion costs).................................................-40,000 Units transferred in from the third process during April Units completed and transferred to finished goods.... Ending work in Process (50% as to conversion costs)...............................................................- 140,000 130,000 Summary of Costs Beginning Work in Process: ($960,000 transferred-in costs, $215,000 direct materials, & $445,000 conversion costs). $1,620,000 1,740,000 Cost of units transferred in from the third process Manufacturing costs incurred in April: Direct materials.... 1,280,000 .. 1,125,000 375.000 $7.140,000 Factory overhead Total costs to account for Instructions: a. Prepare a cost of production report for the month of April. b. Prepare journal entries to record: (1) Transfer of the 140,000 units from the Third Process into the Fourth process. (2) Manufacturing costs charged to the Fourth Process during April (3) Transfer of the completed units from the Fourth Process to the finished goods warehouse
