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Cost of Production and Journal EntriesAccuBlade Castings Inc. casts blades for turbine engines. Withinthe...Cost...

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Accounting

Cost of Production and Journal Entries

AccuBlade Castings Inc. casts blades for turbine engines. Withinthe Casting Department, alloy is first melted in a crucible, thenpoured into molds to produce the castings. On May 1, there were1,100 pounds of alloy in process, which were 30% complete as toconversion. The Work in Process balance for these 1,100 pounds was$159,280, determined as follows:

Direct materials (1,100 x $140)$154,000
Conversion (1,100 x 30% x $16)5,280
$159,280

During May, the Casting Department was charged $1,400,800 for10,300 pounds of alloy and $62,850 for direct labor. Factoryoverhead is applied to the department at a rate of 150% of directlabor. The department transferred out 10,700 pounds of finishedcastings to the Machining Department. The May 31 inventory inprocess was 15% complete as to conversion.

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

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

a3. Prepare the May journal entry for theCasting Department for the completed production transferred to theMachining Department.

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

c. Compute the change in the costs perequivalent unit for direct materials and conversion from theprevious month (April).

Cost per Equivalent Unit
Change in materials$
Change in conversion

Answer & Explanation Solved by verified expert
3.9 Ratings (620 Votes)

a-1) Account titles & Explanations Debit Credit
Work in process inventory 1,400,800
materials -Alloy 1,400,800
a-2) Account titles & Explanations Debit Credit
Work in process -Casting Department 157,125
Wages payable 62,850
Factory overhead -Casting department 94275
a-3) Account titles & Explanations Debit Credit
Work in process -Machining Department        1,620,157
Work in process -Casting Department        1,620,157
b) work in process -casting department              97,048
c)
Change in materials Decrease 3.61
Change in conversion Decrease 0.97
Working notes:
units % EUP-materials % EUP-CC
Equivalent units
completed & transferred 10,700 100% 10,700 100% 10,700
ending work in process 700 100% 700 15% 105
Equivalent units 11400 11,400 10,805
unit cost Materials CC total
Beginning wip 154,000 5,280 159,280
cost added during year 1,400,800 157,125 1,557,925
total cost 1,554,800 162,405 1,717,205
Equivalent units 11,400 10,805
unit cost 136.39 15.03 151.42
Transferred
materials 10,700 * 136.386 = 1459330
conversion 10,700 * 15.03054 = 160826.8
total transferred 1620157
Ending work in process
materials 700 * 136.39 = 95470.18
conversion 105 * 15.03 = 1578.207
total transferred 97048

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Transcribed Image Text

In: AccountingCost of Production and Journal EntriesAccuBlade Castings Inc. casts blades for turbine engines. Withinthe...Cost of Production and Journal EntriesAccuBlade Castings Inc. casts blades for turbine engines. Withinthe Casting Department, alloy is first melted in a crucible, thenpoured into molds to produce the castings. On May 1, there were1,100 pounds of alloy in process, which were 30% complete as toconversion. The Work in Process balance for these 1,100 pounds was$159,280, determined as follows:Direct materials (1,100 x $140)$154,000Conversion (1,100 x 30% x $16)5,280$159,280During May, the Casting Department was charged $1,400,800 for10,300 pounds of alloy and $62,850 for direct labor. Factoryoverhead is applied to the department at a rate of 150% of directlabor. The department transferred out 10,700 pounds of finishedcastings to the Machining Department. The May 31 inventory inprocess was 15% complete as to conversion.a1. Prepare the May journal entry for theCasting Department for the materials charged to production.a2. Prepare the May journal entry for theCasting Department for the conversion costs charged to production.If an amount box does not require an entry, leave it blank.a3. Prepare the May journal entry for theCasting Department for the completed production transferred to theMachining Department.b. Determine the Work in Process—CastingDepartment May 31 balance.$c. Compute the change in the costs perequivalent unit for direct materials and conversion from theprevious month (April).Cost per Equivalent UnitChange in materials$Change in conversion

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