Question

Dover Chemical Company manufactures specialty chemicals by a series of three processes, all materials being introduced in the Distilling Department. From the Distilling Department, the materials pass through the Reaction and Filling departments, emerging as finished chemicals The balance in the account Work in Process-Filling was as follows on January 1: Work in Process-Filling Department (3,400 units, 60% completed) Direct materials (3,400 x $9.58) Conversion (3,400 60% x $3.90) $32,572 7,956 $40,528 The following costs were charged to Work in Process-Filling during January Direct materials transferred from Reaction Department: 52,300 units at $9.50 a unit Direct labor Factory overhead $496,850 101,560 95,166 During anuarv, 53,000 units of specialty chemicals were completed. Work in Process-Filling Department on January 31 was 2,700 units, 30% completed

Answer 1

1

DOVER CHEMICAL COMPANY
Cost of Production Report—Filling Department For the Month Ended January 31,
		Equivalent Units
	Whole Units
UNITS		Direct
		Materials	Conversion
Units charged to production:
Inventory in process, January 1	3,400
Received from Reaction Department	52,300
Total units accounted for by the
Filling Department	55,700
Units to be assigned cost:
Inventory in process, January 1
(60% completed)	3,400	0	1,360
Started and completed in January	49,600	49,600	49,600
Transferred to finished goods
in January	53,000	49,600	50,960
Inventory in process, January 31
(30% completed)	2,700	2,700	810
Total units to be assigned cost	55,700	52,300	51,770

Working notes for the above answer is as under

W.N-1

=3,400 units × (1 – 60%)

=1360

W.N-2

=52,300 units – 2,700 units

=49600

W.N-3

=2,700 units × 30%

=810

__________________________________________________________________________

	Costs
COSTS	Direct
	Materials	Conversion	Total
Costs per equivalent unit:
Total costs for January in Filling
Department	$496,850	$196,726
Total equivalent units	÷   52,300	÷ 51,770
Cost per equivalent unit	$9.50	$3.80
Costs charged to production:
Inventory in process, January 1			$40,528
Costs incurred in January			693,576
Total costs accounted for by the
Filling Department			$734,104
Cost allocated to completed and
partially completed units:
Inventory in process, January 1 balance			$40,528
To complete inventory in process,
1-Jan	$0	$5,168	5,168
Cost of completed January 1 work in
process			$45,696
Started and completed in January	471,200	188,480	659,680
Transferred to finished goods in
January			$705,376
Inventory in process, January 31	25,650	3,078	28,728
Total costs assigned by the Filling
Department			$734,104

W.N-4

=$101,560 + $95,166

=$196,726

W.N-5

= $496,850 + $101,560 + $95,166=693576

W.N-6

= 1,360 units × $3.80=5168

W.N-7

=49,600 units × $9.50=471200

W.N-8

= 49,600 units × $3.80=188480

W.N-9

=2,700 units × $9.50=25650

W.N-10

= 810 units × $3.80=3078

________________________________________________________________________

2

Description	Debit $	Credit $
Work in Process—Filling Department	496,850
Work in Process—Reaction Department		496,850
Finished Goods	705,376
Work in Process—Filling Department		705,376

___________________________________________________________________________

3

Direct materials:           –$0.08 decrease          ($9.50 – $9.58)

Conversion:     –$0.10 decrease          ($3.80 – $3.90)