Question

Cost of Production and Journal Entries Lighthouse Paper Company manufactures newsprint. The product is manufactured in two departments, Papermaking and Converting. Pulp is first placed into a vessel at the beginning of papermaking production. The following information concerns production in the Papermaking Department for March Account Work in Process-Papermaking Department Account No. Balance Date Item Debit Credit Credit Jan. 45,800 Debit 10,320 56,120 70,340 78,332 1 Bal., 4,300 units, 40% completed 31 Direct materials, 22,900 units 31 Direct labor 31 Factory overhead 31 Goods transferred, 25,600 units 31 Bal., 1,600 units, 50% completed 14,220 7,992 al. Prepare the March Journal entry for the Paper making Department for the materials charged to production, Work in Process-Papermaling Department Materials-Pulp a 2. Prepare the March journal entry for the Papermaking Department for the conversion costs charged to production. If an amount box does not require an entry, leave it blank Work in Process-Papermaking Department Wages Payable Factory Overhead 7.992 Check My Work 1 more Check My Work uses remaining < Previous Next)

Answer 1

Equivalent units:

		Equivalent units
	Physical units	Material	Conversion
Beginning WIP	4,300		2,580 (4,300*60%)
Started and completed (25,600-4,300)	21,300	21,300	21,300
Ending WIP	1,600	1,600	800 (1,600*50%)
Total	27,200	22,900	24,680

Cost per equivalent unit:

	Material	Conversion
Cost incurred during March	$45,800	$22,212
Equivalent units	22,900	24,680
Cost per equivalent unit	$2	$0.9

Cost of completed production transferred to converting department:

Beginning WIP:
Beginning balance	$10,320
Cost incurred during March (2,580*$0.9)	2,322
Total	12,642
Cost of units started and completed (21,300*$2.9)	$61,770
Cost of completed production transferred to converting department	$74,412

Cost of Ending WIP:

Direct material (1,600*$2)	$3,200
Conversion costs (800*$0.9)	720
Cost of Ending WIP	$3,920

a2.
Work in process - Papermaking Department	$22,212
Wages payable		$14,220
Factory overhead		7,992
a3.
Work in process - Converting Department	$74,412
Work in process - Papermaking Department		$74,412

b.

Work in process - Papermaking Department March 31, balance = $3,920