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Cost of Production and Journal Entries

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 230 pounds of alloy in process, which were 60% complete as to conversion. The Work in Process balance for these 230 pounds was $32,844, determined as follows:

Direct materials (230 x $132)	$30,360
Conversion (230 x 60% x $18)	2,484
	$32,844

During May, the Casting Department was charged $350,000 for 2,500 pounds of alloy and $19,840 for direct labor. Factory overhead is applied to the department at a rate of 150% of direct labor. The department transferred out 2,530 pounds of finished castings to the Machining Department. The May 31 inventory in process was 44% complete as to conversion.

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

	work in process
	materials

a2. Prepare the May journal entry for the Casting Department for the conversion costs charged to production.

	Work in Process-Casting Department
	wages payable
	factory overhead

a3. Prepare the May journal entry for the Casting Department for the completed production transferred to the Machining Department.

	Work in Process-Machining Department
	Work in Process-Casting Department

b. Compute and evaluate the change in the costs per equivalent unit for direct materials and conversion from the previous month (April).

	Cost per Equivalent Unit
Change in materials	Decreased or Increased	$
Change in conversion	Decreased or Increased	$

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