Question

1. Cost of Production and Journal Entries

   AccuBlade Castings Inc. casts blades for turbine engines. Within the Casting Department, alloy is first melted in a crucible, then poured into molds to produce the castings. On May 1, there were 500 pounds of alloy in process, which were 70% complete as to conversion. The Work in Process balance for these 500 pounds was $52,350, determined as follows:

   Direct materials (500 x $90)	$45,000
   Conversion (500 x 70% x $21)	7,350
   	$52,350

   During May, the Casting Department was charged $404,200 for 4,700 pounds of alloy and $37,720 for direct labor. Factory overhead is applied to the department at a rate of 150% of direct labor. The department transferred out 4,900 pounds of finished castings to the Machining Department. The May 31 inventory in process was 55% complete as to conversion.

   a1. Prepare the May journal entry for the Casting Department for the materials charged to production.

   	Work in Process-Casting Department Cash Factory Overhead-Casting Department Factory Overhead-Machining Department Materials-Alloy Work in Process-Casting Department Work in Process-Machining Department
   	Materials-Alloy Cash Factory Overhead-Casting Department Materials-Alloy Wages Payable Work in Process-Casting Department Work in Process-Machining Department

   Feedback

   a2. Prepare the May journal entry for the Casting Department for the conversion costs charged to production. If an amount box does not require an entry, leave it blank.

   	Work in Process-Casting Department Cash Factory Overhead-Casting Department Finished Goods Wages Expense Work in Process-Casting Department Work in Process-Machining Department
   	Wages Payable Accounts Receivable Cash Materials Wages Payable Work in Process-Casting Department Work in Process-Machining Department
   	Factory Overhead-Casting Department Accounts Payable Cash Factory Overhead-Casting Department Finished Goods Work in Process-Casting Department Work in Process-Machining Department

   Feedback

   a3. Prepare the May journal entry for the Casting Department for the completed production transferred to the Machining Department.

   	Work in Process-Machining Department Cash Factory Overhead-Casting Department Finished Goods Materials Work in Process-Casting Department Work in Process-Machining Department
   	Work in Process-Casting Department Cash Factory Overhead-Casting Department Finished Goods Materials Work in Process-Casting Department Work in Process-Machining Department

   Feedback

   b. Determine the Work in Process—Casting Department May 31 balance.
   $

   c. Compute the change in the The rate used to allocate costs between completed and partially completed production.costs per equivalent unit for direct materials and conversion from the previous month (April).

   	Cost per Equivalent Unit
   Change in materials	Decrease Increase	$
   Change in conversion	Decrease Increase

Answer 1

a.

Date	Description	Debit	Credit
May 1	Work in Process-Casting Department	404200
	Materials-Alloy		404200
May 31	Work in Process-Casting Department	94300
	Wages Payable		37720
	Factory Overhead-Casting Department [37720*150%]		56580
May 31	Work in Process-Machining Department	521750
	Work in Process-Casting Department		521750

b.

Materials	25800	[300*86]
Conversion	3300	[20*165]
Cost of ending work in process	29100

c.

Materials	Decrease	4	[90-86]
Conversion	Decrease	1	[21-20]

Workings:

Units to account for	Units	% of completion	Equivalent units Materials	% of completion	Equivalent units Conversion costs
Beginning WIP	500			30%	150
Completed	4400	100%	4400	100%	4400
WIP,ending	300	100%	300	55%	165
Total	5200		4700		4715

Cost per equivalent unit
Costs	Materials	Conversion costs	Total
Costs added during the current month	404200	94300	498500
Divided by :Total EUP	4700	4715
Cost per equivalent unit	86	20	106.000

Completed previously	52350
Current month	3000	[150*20]
Cost of beginning work in process	55350

Cost of beginning work in process	55350
Current month introduced and completed	466400	[106*4400]
Cost of units transferred to next department	521750