Production cost flow and measurement; journal entries L.O. P1, P2, P3, P4

[The following information applies to the questions displayed below.]

Edison Company manufactures wool blankets and accounts for product costs using process costing. The following information is available regarding its May inventories.

 

	Beginning Inventory		Ending Inventory
Raw materials inventory	$	60,000		$	41,000
Goods in process inventory		449,000			521,500
Finished goods inventory		610,000			342,001

 

The following additional information describes the company’s production activities for May.

 

Raw materials purchases (on credit)	$	250,000
Factory payroll cost (paid in cash)		1,850,300
Other overhead cost (Other Accounts credited)		82,000
Materials used
Direct	$	200,500
Indirect		50,000
Labor used
Direct	$	1,060,300
Indirect		790,000
Overhead rate as a percent of direct labor		115	%
Sales (on credit)	$	3,000,000

 

The predetermined overhead rate was computed at the beginning of the year as 115% of direct labor cost.

 

\\ rev: 11_02_2011

references

 

 

1.

value: 2.00 points

 

 

Problem 20-1A Part 1

Required:
1(a)	Compute the cost of products transferred from production to finished goods. (Omit the “$” sign in your response.)

 

Cost of products transferred

$

 

1(b)	Compute the cost of goods sold. (Omit the “$” sign in your response.)

 

Cost of goods sold

$

rev: 10_31_2011

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2.

value: 5.00 points

 

 

Problem 20-1A Part 2

2(a)	Prepare journal entry dated May 31 to record the raw materials purchases. (Omit the “$” sign in your response.)

 

Date	General Journal	Debit	Credit
May 31

 

2(b)	Prepare journal entry dated May 31 to record the direct materials usage. (Omit the “$” sign in your response.)

 

Date	General Journal	Debit	Credit
May 31

 

2(c)	Prepare journal entry dated May 31 to record the indirect materials usage. (Omit the “$” sign in your response.)

 

Date	General Journal	Debit	Credit
May 31

 

2(d)	Prepare journal entry dated May 31 to record the payroll costs. (Omit the “$” sign in your response.)

 

Date	General Journal	Debit	Credit
May 31

 

2(e)	Prepare journal entry dated May 31 to record the direct labor costs. (Omit the “$” sign in your response.)

 

Date	General Journal	Debit	Credit
May 31

 

2(f)	Prepare journal entry dated May 31 to record the indirect labor costs. (Omit the “$” sign in your response.)

 

Date	General Journal	Debit	Credit
May 31

 

2(g)	Prepare journal entry dated May 31 to record the other overhead costs. (Omit the “$” sign in your response.)

 

Date	General Journal	Debit	Credit
May 31

 

2(h)	Prepare journal entry dated May 31 to record the overhead applied. (Omit the “$” sign in your response.)

 

Date	General Journal	Debit	Credit
May 31

 

2(i)	Prepare journal entry dated May 31 to record the goods transferred from production to finished goods.(Omit the “$” sign in your response.)

 

Date	General Journal	Debit	Credit
May 31

 

2(j)	Prepare journal entry dated May 31 to record the sale of finished goods. (Omit the “$” sign in your response.)

 

Date	General Journal	Debit	Credit
May 31

 

 

 

Fairfax Company uses weighted-average process costing to account for its production costs. Direct labor is added evenly throughout the process. Direct materials are added at the beginning of the process. During September, the company transferred 760,000 units of product to finished goods. At the end of September, the goods in process inventory consists of 203,000 units that are 90% complete with respect to labor. Beginning inventory had $438,165 of direct materials and $188,540 of direct labor cost. The direct labor cost added in September is $3,582,260, and the direct materials cost added is $2,932,335.

 

references

 

 

3.

value: 2.00 points

 

 

Problem 20-2A Part 1

Required:
1(a)	Determine the equivalent units of production with respect to direct labor.

 

Equivalent units

 

1(b)	Determine the equivalent units of production with respect to direct materials.

 

Equivalent units

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4.

value: 2.00 points

 

 

Problem 20-2A Part 2

2.	Compute both the direct labor cost and the direct materials cost per equivalent unit. (Round your answers to 2 decimal place. Omit the “$” sign in your response.)

 

	Per equivalent unit
Direct labor cost	$
Direct materials cost	$

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5.

value: 2.00 points

 

 

Problem 20-2A Part 3

3(a)

Compute both direct labor cost and direct materials cost assigned to units completed and transferred out. (Due to rounding of cost per unit, the total costs accounted for in the cost summary may not equal to sum of all the costs given in the problem. Round your per unit costs to 2 decimal places and final answers to the nearest dollar amount.)

   

	Cost transferred out
Direct materials	$
Direct labor	$

 

3(b)

Compute both direct labor cost and direct materials cost assigned to ending goods in process inventory. (Due to rounding of cost per unit, the total costs accounted for in the cost summary may not equal to sum of all the costs given in the problem. Round your per unit costs to 2 decimal places and final answers to the nearest dollar amount.)

 

	Costs of ending goods in process
Direct materials	$
Direct labor	$

 

 

 

Problem 20-3A Journalizing in process costing; equivalent units and costs L.O. C2, P1, P2, P3

[The following information applies to the questions displayed below.]

Li Company produces large quantities of a standardized product. The following information is available for its production activities for January.

 

Raw materials				Factory overhead incurred
Beginning inventory	$	16,000		Indirect materials used	$	80,500
Raw materials purchased (on credit)		280,000		Indirect labor used		40,000
Direct materials used		(171,500	)	Other overhead costs		159,920
Indirect materials used		(80,500	)	Total factory overhead incurred	$	280,420
Ending Inventory	$	44,000
				Factory overhead applied
Factory payroll				(140% of direct labor cost)
Direct labor used	$	200,300		Total factory overhead applied	$	280,420
Indirect labor used		40,000
Total payroll cost (paid in cash)	$	240,300

 

Additional information about units and costs of production activities follows.

 

 

Units			Costs
Beginning goods in process inventory	2,600		Beginning goods in process inventory
Started	26,000		Direct materials	$	3,000
Ending goods in process inventory	4,900		Direct labor		3,500
			Factory overhead		4,000
						$	10,500
Status of ending goods in process inventory			Direct materials added				171,500
Materials—Percent complete	90	%	Direct labor added				200,300
Labor and overhead—Percent complete	75	%	Overhead applied (140% of direct labor)				280,420
			Total costs			$	662,720
			Ending goods in process inventory			$	92,911

 

During January, 22,000 units of finished goods are sold for $160 cash each. Cost information regarding finished goods follows.

 

 

Beginning finished goods inventory	$	150,000
Cost transferred in		569,809
Cost of goods sold		(598,390	)
Ending finished goods inventory	$	121,419

references

 

 

6.

value: 5.00 points

 

 

Problem 20-3A Part 1

Required:
1(a)	Prepare journal entry dated January 31 to record the purchase of raw materials. (Omit the “$” sign in your response.)

 

Date	General Journal	Debit	Credit
Jan. 31

 

1(b)	Prepare journal entry dated January 31 to record the direct materials usage. (Omit the “$” sign in your response.)

 

Date	General Journal	Debit	Credit
Jan. 31