Question

Polar Springs produces premium bottled water. In the Bottling Department, workers bottle the filtered water and pack the bottles into boxes. Conversion costs are incurred evenly throughout the bottling process, but packaging materials are not added until the end of the process. May data from the Bottling Department follow:

1.

Prepare the journal entry to record the cost of units completed and transferred to finished goods.

2.

Costs in beginning work in process inventory:

Transferred in. . . . . . . . . . . . . . . . . . . .

$1,650

Direct materials. . . . . . . . . . . . . . . . . . .

0

Direct labor. . . . . . . . . . . . . . . . . . . . . .

550

Manufacturing overhead. . . . . . . . . . . . .

570

Total beginning work in process

Total costs added

inventory as of May 1. . . . . . . . . .

$2,770

Costs added during May:

Transferred in. . . . . . . . . . . . . . . . . . . .

$136,000

Direct materials. . . . . . . . . . . . . . . . . . .

30,800

Direct labor. . . . . . . . . . . . . . . . . . . . . .

33,726

Manufacturing overhead. . . . . . . . . . . . .

22,484

Total costs added during May:

$223,010

*The Filtration Department completed and transferred out 160,000 liters at a total cost of $136,000.

Polar Springs

Bottling Department

Assigning Costs

Transferred-

Direct

Conversion

in

Materials

Costs

Total

Completed and transferred out:

Equivalent units completed and transferred out

154,000

154,000

154,000

Multiplied by: Cost per equivalent unit

$0.82

$0.25

$0.35

Costs assigned to units completed and transferred out

$126,280

$38,500

$53,900

$218,680

Ending work in process:

Equivalent units in ending work in process, May 31

14,000

0

11,200

Multiplied by: Cost per equivalent unit

$0.82

$0.25

$0.35

Costs assigned to units in ending work in process, May 31

$11,480

$0

$3,920

15,400

Total costs accounted for

$234,080

1. Prepare the journal entry to record the cost of units completed and transferred to finished goods. (Record debits first, then credits. Exclude explanations from any journal entries.)

Journal Entry

Date

Accounts

Debit

Credit

2. Post all transactions to the “Work in Process Inventorylong dash—Bottling” T-account. What is the ending balance?

Work in Process Inventory—Bottling

1.

Prepare the journal entry to record the cost of units completed and transferred to finished goods.

2.

Post all transactions to the “Work in Process Inventorylong dash—Bottling” T-account. What is the ending balance?

 



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