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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 260 pounds of alloy in process, which were 60% complete as to conversion. The Work in Process balance for these 260 pounds was $37,180, determined as follows:

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1	Direct materials (260 $134)	$34,840.00
2	Conversion (260 60% $15)	2,340.00
3		$37,180.00

During May, the Casting Department was charged $276,000 for 2,000 pounds of alloy and $19,540 for direct labor. Factory overhead is applied to the department at a rate of 150% of direct labor. The department transferred out 2,060 pounds of finished castings to the Machining Department. The May 31 inventory in process was 25% complete as to conversion.

A(1). On May 1, prepare the journal entry for the Casting Department for the materials charged to production. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2

Solution

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2

Points:

A(2). On May 31, prepare the journal entry for the Casting Department for the conversion costs charged to production. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3

Solution

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3

Points:

A(3). On May 31, prepare the journal entry for the Casting Department for the completed production transferred to the Machining Department. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2

Solution

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2

B. Determine the Work in Process-Casting Department May 31 balance.

Points:

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Explanation

C. Compute and evaluate the change in the costs per equivalent unit

The rate used to allocate costs between completed and partially completed production.

for direct materials and conversion from the previous month (April).

	Cost per Equivalent Unit
Change in materials	selector 1 Decrease OR Increase	$
Change in conversion	Decrease OR Increase

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