Vero, Inc. manufactures tire tubes in a two-stage process that includes assembly and sealing. The Sealing Department tests the tubes and adds a puncture-resistant coating to each tube to prevent air leaks.

The direct materials (coating) are added at the end of the sealing process.

Conversion costs are incurred evenly throughout the process. Work in process of the Sealing Department on February 29, 2016, consisted of 1,000 tubes that were 70% of the way through the production process. The beginning balance in Work-in-Process Inventory-Sealing was $26,700, which consisted of $11,100 in transferred in costs and $15,600 in conversion costs. During March, 4,800 tubes were transferred infrom the Assembly Department. The Sealing Department transferred 3,600 tubes to Finished Goods Inventory in March, and 2,200 were still in process on March 31. This ending inventory was 40% of the way through the sealing process. Vero uses FIFO process costing.

At March 31, before recording the transfer of costs from the Sealing Department to Finished Goods Inventory, the Vero general ledger included the following account:

Requirements
1. Prepare a production cost report for the Sealing Department for March.
2. Journalize all transactions affecting the Sealing Department during March, including the entries that have already been posted.

Transcribed Image Text:

Work-in-Process Inventory-Sealing Balance, Feb. 29 Transferred in from Assembly Direct materials Direct labor Manufacturing overhead 26,700 48,000 18,000 29,550 27,150