Work in Process Account Data for Two Months; Cost of Production Reports
Pittsburgh Aluminum Company uses a process cost system to record the costs of manufacturing rolled aluminum, which consists of the smelting and rolling processes. Materials are entered from smelting at the beginning of the rolling process. The inventory of Work in ProcessRolling on September 1 and debits to the account during September were as follows:
| Bal., 1,200 units, 70% completed: | |
| | Direct materials (1,200 x $6.7) | $ 8,040 |
| | Conversion (1,200 x 70% x $2.8) | 2,352 |
| | $ 10,392 |
| From Smelting Department, 25,800 units | $175,440 |
| Direct labor | 46,484 |
| Factory overhead | 25,030 |
During September, 1,200 units in process on September 1 were completed, and of the 25,800 units entering the department, all were completed except 2,500 units that were 40% completed. Charges to Work in ProcessRolling for October were as follows:
| From Smelting Department, 29,700 units | $207,900 |
| Direct labor | 58,340 |
| Factory overhead | 31,420 |
During October, the units in process at the beginning of the month were completed, and of the 29,700 units entering the department, all were completed except 1,600 units that were 20% completed.
Required: 1. Enter the balance as of September 1 in a four-column account for Work in Process Rolling. Record the debits and the credits in the account for September. Construct a cost of production report and present computations for determining (a) equivalent units of production for materials and conversion, (b) costs per equivalent unit, (c) cost of goods finished, differentiating between units started in the prior period and units started and finished in September, and (d) work in process inventory. If an amount box does not require an entry, leave it blank. ACCOUNT Work in Process-Rolling Department ACCOUNT NO. BALANCE DEBIT CREDIT DATE ITEM POST. REF. DEBIT CREDIT Sept. 1 Sept. 30 175,440 Bal., 1,200 units, 70% completed Smelting Dept., 25,800 units at $6.8 Direct labor Factory overhead 10,392 185,832 232,316 Sept. 30 46,484 Sept. 30 25,030 257,346 Sept. 30 Finished goods 237,446 19,900 Sept. 30 Bal., 2,500 units, 40% completed 19,900 If an amount is zero, enter in a zero "0". Round cost per unit answers to the nearest cent. Pittsburgh Aluminum Company Cost of Production Report-Rolling Department For the Month Ended September 30 Whole Units Equivalent Units Units Direct Materials (a) Conversion (a) 1,200 25,800 27,000 Units charged to production: Inventory in process, September 1 Received from Smelting Department Total units accounted for by the Rolling Department Units to be assigned costs: Inventory in process, September 1 Started and completed in September Transferred to finished goods in September Inventory in process, September 30 Total units to be assigned costs 0 360 1,200 23,300 23,300 23,300 23,300 24,500 23,660 2,500 2,500 1,000 27,000 25,800 24,660 Costs Costs Direct Materials Conversion Total Costs 71,514 175,440 25,800 24,660 6.80 $ 2.90 10,392 246,954 Cost per equivalent unit: Total costs for September in Rolling Department Total equivalent units Cost per equivalent unit (b) costs assigned to production: Inventory in process, September 1 Costs incurred in September Total costs accounted for by the Rolling Department Costs allocated to completed and partially completed units: Inventory in process, September 1 balance (c) To complete inventory in process, September 1 (c) Cost of completed September 1 work in process Started and completed in September (c) Transferred to finished goods in September (c) Inventory in process, September 30 (d) $ 257,346 of 10,392 1,044 1,044 $ 11,436 158,440 67,570 226,010 $ 237,446 1,900 17,000 2,900 Total costs assigned by the Rolling Department $ 257,346 2. Provide the same information for October by recording the October transactions in the four-column work in process account. Construct a cost of production report, and present the October computations (a through d) listed in part (1). If an amount box does not require an entry, leave it blank. ACCOUNT Work in Process-Rolling Department ACCOUNT NO. Balance DEBIT CREDIT DATE ITEM POST. REF. DEBIT CREDIT October 1 Balance 207,900 209,800 October 31 Smelting Dept., 29,700 units at $7 58,340 October 31 Direct labor 31,420 October 31 Factory overhead October 31 Finished goods October 31 Bal., 1,600 units, 20% completed If an amount is zero, enter in a zero "0". Round cost per unit answers to the nearest cent. Pittsburgh Aluminum Company Cost of Production Report-Rolling Department For the Month Ended October 31 Whole Units Equivalent Units Direct Conversion Units Materials (a) (a) Units charged to production: Inventory in process, October 1 Received from Smelting Department Total units accounted for by the Rolling Department Units to be assigned costs: Inventory in process, October 1 Started and completed in October Transferred to finished goods in October Inventory in process, October 31 Total units to be assigned costs Costs Costs Direct Materials Conversion Total Costs $ Cost per equivalent unit: Total costs for October in Rolling Department Total equivalent units Cost per equivalent unit (b) Costs assigned to production: Inventory in process, October 1 Costs incurred in October Total costs accounted for by the Rolling Department Costs allocated to completed and partially completed units: Inventory in process, October 1 balance (c) To complete inventory in process, October 1 (c) Cost of completed October 1 work in process Started and completed in October (6) Transferred to finished goods in October (c) Inventory in process, October 31 (d) Total costs assigned by the Rolling Department 3. The cost per equivalent unit for direct materials from August to October. These changes actions should be taken. $ from August to October. The cost per equivalent unit for conversion costs be investigated for their underlying causes, and any necessary corrective
