QUESTION:
Required information (The following information applies to the questions displayed below.) Orbital Industries of Canada, Inc. manufactures a variety of materials and equipment for the aerospace industry. A team of R&D engineers in the firm's Winnipeg plant has developed a new material that will be useful for a variety of purposes in orbiting satellites and spacecraft. Tradenamed Ceralam, the material combines some of the best properties of both ceramics and laminated plastics. Ceralam is already being used for a variety of housings in satellites produced in three different countries. Ceralam sheets are produced in an operation called rolling, in which the various materials are rolled together to form a multilayer laminate. Orbital Industries sells many of these Ceralam sheets just after the rolling operation to aerospace firms worldwide. However, Orbital also processes many of the Ceralam sheets further in the Winnipeg plant. After rolling, the sheets are sent to the molding operation, where they are formed into various shapes used to house a variety of instruments. After molding, the sheets are sent to the punching operation, where holes are punched in the molded sheets to accommodate protruding instruments, electrical conduits, and so forth. Some of the molded and punched sheets are then sold. The remaining units are sent to the dipping operation, in which the molded sheets are dipped in a special chemical mixture to give them a reflective surface. During the month of March, the following products were manufactured at the Winnipeg plant. The direct-material costs are also shown. Direct Direct Materials Used Materials in Ceralam Used in Sheets Dipping Units 9, 200 $ 2,944,000 Ceralam sheets (sold after the rolling operation) Nonreflective housings (sold after the punching operation) Reflective housings (sold after the dipping operation) Total 4,000 1,280,000 1,900 15, 100 608,000 4,832,000 76,000 76,000 The costs incurred in producing the various Ceralam products in the Winnipeg plant during March are shown in the following table. Manufacturing overhead is applied on the basis of direct-labor dollars at the rate of 150 percent. Rolling Direct material $ 4,832,000 Direct labor 1,630,800 Manufacturing overhead 2,446,200 Total $8,909,000 Molding $ -0- 330, 400 495,600 $ 826,000 Punching $ -0- 472,000 708,000 $1,180,000 Dipping $ 76,000 114,000 171,000 $361,000 Orbital Industries of Canada uses operation costing for its Ceralam operations in the Winnipeg plant. Required: 1. Complete the following table showing information for each of the four operations. Answer is complete and correct. Conversion costs Molding Punching Dipping Direct labor $ 330,400 $ 472,000 $ 114,000 Rolling $ 1,630,800 2,446,200 $ 4,077,000 Manufacturing overhead 495,600 171,000 708,000 $ 1,180,000 Total conversion cost $ 826,000 $ 285,000 15,100 Total units produced: Rolling only Rolling, molding, punching Rolling, molding, punching, dipping Conversion cost per unit 5,900 5,900 1,900 $ 270 $ 140 200 $ 150 Required information Answer is complete and correct. Product Costs Ceralam Nonreflective Sheets Ceralam Sold after Housings Rolling Reflective Ceralam Housings Total Costs Direct material: Ceralam sheets $ 2,944,000 1,280,000 $ 608,000 $ 4,832,000 Chemical dip 76,000 76,000 Conversion costs: 2,484,000 1,080,000 4,077,000 0 560,000 Rolling Molding Punching Dipping 513,000 266,000 380,000 285,000 0 800,000 826,000 1,180,000 285,000 0 0 Total cost 3,720,000 $ 2,128,000 11,276,000 5,428,000 9,200 Units manufactured 4,000 1,900 Unit cost $ 590 930 1,120 select "NO Journai entry requirea" in ne tirst account thela.) Credit No 1 Answer is not complete. Transaction General Journal 1 Work-in-process inventory: Rolling Raw-material inventory Applied conversion costs Debit 8,909,00 4,832,00 4,077,00 2 2 Finished-goods inventory Work-in-process inventory: Rolling 3 3 Cost of goods sold Finished-goods inventory 4 4 Work-in-process inventory: Molding Work-in-process inventory: Rolling 5 5 Work-in-process inventory: Molding Applied conversion costs 6 6 Work-in-process inventory: Punching Work-in-process inventory: Molding 7 7 Work-in-process inventory: Punching Applied conversion costs SS SS SS SS SS SS SS SS SS SS SS SS SSS 8 8 Finished-goods inventory Work-in-process inventory: Punching 9 9 Cost of goods sold Finished-goods inventory 10 10 Work-in-process inventory: Dipping Work-in-process inventory: Punching 11 11 361,000 Work-in-process inventory: Dipping Raw-material inventory Applied conversion costs 76,000 285,000 12 12 Finished-goods inventory Work-in-process inventory: Dipping 13 13 Cost of goods sold Finished-goods inventory
