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., 800 units, 80% completed:
	Direct materials (800 x $4.6)	$ 3,680
	Conversion (800 x 80% x $1.9)	1,216
		$ 4,896
From Smelting Department, 18,480 units		$86,856
Direct labor		22,503
Factory overhead		12,117

During September, 800 units in process on September 1 were completed, and of the 18,480 units entering the department, all were completed except 1,900 units that were 30% completed. Charges to Work in ProcessRolling for October were as follows:

From Smelting Department, 21,300 units	$104,370
Direct labor	30,070
Factory overhead	16,193

During October, the units in process at the beginning of the month were completed, and of the 21,300 units entering the department, all were completed except 1,000 units that were 40% completed.

Required:

1. Enter the balance as of September 1 in a four-column account for Work in ProcessRolling. 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.

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
DATE	ITEM	POST. REF.	DEBIT	CREDIT	DEBIT	CREDIT
October 1	Balance
October 31	Smelting Dept., 21,300 units at $4.9
October 31	Direct labor
October 31	Factory overhead
October 31	Finished goods
October 31	Bal., 1,000 units, 40% 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
Units		Direct Materials (a)	Conversion (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 (c)
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 increased from August to October. The cost per equivalent unit for conversion costs increased from August to October. These changes should be investigated for their underlying causes, and any necessary corrective actions should be taken.