Two Departments, Journal Entries with Supporting CalculationsWeighted Average Method

Patterson Laboratories, Inc., produces one of its products in two successive departments. All materials are added at the beginning of the process in Department 1; no materials are used in Department 2. Conversion costs are incurred evenly in both departments. Patterson uses the weighted average method for process costing. January 1, 2019, inventory account balances are as follows:

Materials inventory	$30,000
Work in processDepartment 1 (3,000 units, 30% complete)
Direct material	4,560
Conversion costs	10,640
Work in processDepartment 2 (3,550 units, 40% complete)	43,439
Finished goods inventory (2,000 units @ $16)	32,000

During January, the following transactions occurred:

1. Purchased material on account, $90,000.

2. Placed $84,000 of material into process in Department 1. This $84,000 represents 24,000 units of

   materials.

3. Distributed total payroll costs: $108,116 of direct labor to Department 1, $62,700 of direct labor

   to Department 2, and $51,000 of indirect labor to Manufacturing Overhead.

4. Incurred other actual manufacturing overhead costs, $81,000. (Credit Other Accounts.)

5. Applied overhead to the two processing departments: $88,000 to Department 1 and $43,900 to

   Department 2.

6. Transferred 25,000 completed units from Department 1 to Department 2. The 2,000 units remaining

   in Department 1 were 20% completed with respect to conversion costs.

7. Transferred 26,000 completed units from Department 2 to finished goods inventory. The 2,550

   units remaining in Department 2 were 70% completed with respect to conversion costs.

8. Sold 20,000 units on account at $27 per unit. Patterson uses weighted average inventory costing procedures

   for the finished goods inventory.

• Part A
• Part B
• Part C
• Part D

b. Prepare a product cost report (with its supporting calculations) for Department 1.

Round average cost per equivalent unit to two decimal places. Use rounded answers for subsequent calculations. Round other answers to the nearest whole number.

Patterson Laboratories, Inc. Department 1 Flow of Units and Equivalent Units Calculations, January 2019
		Equivalent Units
		% Work Done	Direct Materials	% Work Done	Conversion Costs
Complete/Transferred	Answer	Answer	Answer	Answer	Answer
Ending Inventory	Answer	Answer	Answer	Answer	Answer
Total	Answer		Answer		Answer

Product Cost Report
			Direct Materials		Conversion Costs
Beginning Inventory	Answer		Answer		Answer
Current	Answer		Answer		Answer
Total Costs to Account For	Answer		Answer		Answer
Total Equivalent Units			Answer		Answer
Average cost / Equivalent unit (round 2 decimal places)			Answer		Answer
Complete / Transferred:
Direct Materials	Answer
Conversion costs	Answer
Cost of Goods Manufactured	Answer
Ending Inventory:
Direct Materials	Answer
Conversion costs	Answer
Cost of Ending Inventory	Answer
Total Costs Allocated	Answer

Determine the balances remaining in the Materials Inventory account, in each work in process account, and in the Finished Goods Inventory account.