Fast Co. produces its product through a single processing department. Direct mat
ID: 2538954 • Letter: F
Question
Fast Co. produces its product through a single processing department. Direct materials are added at the start of production, and conversion costs are added evenly throughout the process. The company uses monthly reporting periods for its weighted-average process costing system. The Work in Process Inventory account has a balance of $95,300 as of October 1, which consists of $20,400 of direct materials and $74,900 of conversion costs.
During the month the company incurred the following costs:
During October, the company started 151,000 units and transferred 161,000 units to finished goods. At the end of the month, the work in process inventory consisted of 25,500 units that were 80% complete with respect to conversion costs.
Required:
1. Prepare the company’s process cost summary for October using the weighted-average method.
2. Prepare the journal entry dated October 31 to transfer the cost of the completed units to finished goods inventory.
REQUIRED 1:
Required 2:
Direct materials $ 128,800 Conversion 1,067,920Explanation / Answer
total costs to account for: Beginning work in process 95,300 cost added during the year 1196720 total costs to account for: 1,292,020 total costs accounted for 1,292,020 Difference due to rounding 0 Unit reconciliation: units to account for: Beginning work in process 35,500 started during the year 151,000 total units to account for 186,500 Total units accounted for transferred to finished goods 161,000 ending work in process inventor 25,500 total units accounted for 186,500 Equivalent units of production-(EUP)-weighted average method units % EUP- % EUP materials materials converstion CC transferred to finished goods 161,000 100% 161,000 100% 161,000 ending work in process inventory 25,500 100% 25,500 80% 20400 total units 186,500 181,400 Cost per Equivalent units of production Materials Conversion Beginning work in process 20,400 74,900 cost added during the year 128,800 1,067,920 total costs costs 149,200 costs 1,142,820 equivalent units of production EUP 186,500 EUP 181,400 Cost per Equivalent units of production 0.8 6.3 total costs accounted for cost of units transferred out: EUP cost EUP total direct materials 161,000 0.8 128800 conversion 161,000 6.3 1014300 total costs transferred out 1143100 cost of ending work in process EUP cost EUP total direct materials 25,500 0.8 20400 conversion 20,400 6.3 128520 total cost of ending work in process 148920 total costs accounted for 1292020 Req 2 General Journal Debit Credit finished goods inventory 1143100 work in process inventory 1143100
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