Question
Root's Exteriors produces exterior siding for homes. The Preparation Department begins with wood, which is chopped into small bits. At the end of the process,
Root's Exteriors produces exterior siding for homes. The Preparation Department begins with wood, which is chopped into small bits. At the end of the process, an adhesive is added. Then the wood/adhesive mixture goes on to the Compression Department, where the wood is compressed into sheets. Conversion costs are added evenly throughout the preparation process. March data for the Preparation Dept. are as follows (in millions):
Sheets:
Begining work in process inventory - 0 sheets
Started production - 3,300 sheets
Completed and transferred out to Compression in March - 1,900 sheets
ENding work in process inventory (45%of the way through the preparation process)-1400 sheets
Costs:
Beginning work in process inventory- $0
Costs adding during March:
Wood - 2,600
Adhesives-1365
Direct Labor-640
Manufacturing overhead-2,445
Total costs: $7,050
REQUIREMENTS:
- Draw a time line for the Preparation Department
- Use the time line to help you compute the equivalent. (HINT: Each direct material added at a different point in the production process requires its own equivalent-unit computation)
- Compute the total costs of the units (sheets) -( a.) Completed and transferred out to the Compression Department. (b.) In the Preparation Departments Ending work in process inventory.
- Prepare the journal entry to record the cost of the sheets completed and transferred out to the compression Dept.
- Post the journal entries to the Work in process inventory-Preparation T-account. What is the ending balance?
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