Clopack Company manufactures one product that goes through one processing depart

Question

Clopack Company manufactures one product that goes through one processing department called Mixing. All raw materials are introduced at the start of work in the Mixing Department. The company uses the weighted-average method to account for units and costs. Its Work in Process T-account for the Mixing Department for June follows (all forthcoming questions pertain to June) Work in Process-Mixing Department June 1 balance 28,000 Completed and transferred to Fnished Goods Materials Direct labor Overhead June 30 balance 120,000 79,500 97,000 The June 1 work in process inventory consisted of 5,000 pounds with $16,000 in materials cost and $12,000 in conversion cost. The June 1 work in process inventory was 100% complete with respect to materials and 50% complete with respect to conversion. During June, 37,500 pounds were started into production. The June 30 work in process inventory consisted of 8,000 pounds that were 100% complete with respect to materials and 40% ete with respect to conversion. Required: 1. Prepare the journal entries to record the raw materials used in production and the direct labor cost incurred Account name Debit Credit 2. Prepare the journal entry to record the overhead cost applied to production. Account name Debit Credit

Explanation / Answer

Amount (in $) Account Name Debit Credit Work in Process 1,20,000.00      Raw Materials 1,20,000.00 Work in Process 79,500.00      Wages 79,500.00 Work in Process 1,00,500.00      Manufacturing Overheads 1,00,500.00 3. Units completed and transferred to finished goods during the period Particulars Amount (in $) Work in Process, June1 5000 Started into production during the month 37500 Total pounds in process 42500 Less: Work in process June 30 8000 Completed and transferred out during the month 34500 4&5. Equivalent units of production for materials & conversion Equivalent Units       Particulars Materials Conversion Units transferred out 37500 37500 Work in process, ending: 8000*100% 8000 8000*40% 3200 Equivalent units of production 45500 40700 6&7. Cost of beginning work in process inventory plus the cost added during the period for materials & conversion Amount (in $) Particulars Materials Conversion Cost of beginning work in process 16000 12000 Cost added during the period 120000 176500 Total Cost 136000 188500 8&9. Cost per equivalent units for materials & conversion Amount (in $) Particulars Materials Conversion Total Cost 136000 188500 Equivalent units of production 45500 40700 Cost per equivalent unit 2.99 4.63 10&11. Cost of ending work in process inventory for materials & conversion Amount (in $) Particulars Materials Conversion Total Equivalent units of production 8000 3200 Cost per equivalent unit 2.99 4.63 Cost of ending work in process inventory 23920 14816 38736 12&13. Cost of materials & conversion cost transferred to finished goods Amount (in $) Particulars Materials Conversion Total Units transferred out 34500 34500 Cost per equivalent unit 2.99 4.63 Cost of units transferred to finished goods 103155 159735 262890 Amount (in $) Account Name Debit Credit Finished Goods 2,62,890.00      Work in Process 2,62,890.00 15. Total cost to be accounted for material & conversion Amount (in $) Particulars Materials Conversion Cost of beginning work in process inventory 16000 12000 Cost added to production during the period 120000 176500 Total cost to be accounted for 136000 188500 Cost of beginning work in process inventory 16000 12000 Cost of units completed and transferred out 103155 159735 Total cost to be accounted for 119155 171735

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