Question
Puzzle Me Company manufactures puzzles. It has two production departments Assembly and Finishing Department. The direct materials for the assembly department are added at the
Puzzle Me Company manufactures puzzles. It has two production departments Assembly and Finishing Department. The direct materials for the assembly department are added at the beginning of the process. The conversion costs are added evenly throughout the process. When the assembly department finishes work on each puzzle, it is immediately transferred to the finishing department.
The Assembly department has the following data for July:
| Units: |
|
| Beginning Inventory: | 8,000 (100% complete to Materials, 60% to Conversion Cost) |
| Started in production in July | 42,000 |
| Transferred out in July | 40,000 |
| Ending Inventory | ???? (100% complete to Materials, 25% to Conversion |
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|
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| Costs: |
|
| Beginning Inventory: |
|
| Direct Materials | $9,800 |
| Conversion | $3,910 |
| Costs added during July |
|
| Materials | $130,200 |
| Direct Labor | $22,090 |
| Factory Overhead | $42,000 |
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|
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| Required: | 1. | Do a complete production report using Average Cost Flow for the Assembly Department. |
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| 2. | Prepare journal entries for all July transactions affecting WIP-Assembly |
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| 3. | Set up a T-Account for WIP- Assembly & WIP- Finishing. Make sure to enter the beginning balance. |
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| 4. | Do a complete production report using FIFO Cost Flow. |
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