Please help! USE FIRST-IN, FIRST-OUT COSTING Sulu Company produces its finished
ID: 2405007 • Letter: P
Question
Please help!
USE FIRST-IN, FIRST-OUT COSTING
Sulu Company produces its finished product in two processing departments--Assembly and Packaging.
The following information is available for the month of July:
Assembly Department:
The beginning work-in-process inventory was $5,755 ($4,815 direct materials and $940 conversion costs) and consisted of 350 units that were 10% complete as to conversion costs.
During July, an additional 4,500 units were started into production.
A total of 4,650 units were completed and transferred out to the Packaging Department.
The ending work-in-process inventory consisted of 200 units which were 35% complete as to conversion costs.
The following costs were incurred during July: direct materials $73,800; direct labor $86,300; and overhead $40,195.
Direct materials are added at the beginning of the process in the Assembly Department and conversion costs are incurred evenly throughout the production process.
Packaging Department:
The beginning work in process inventory was $29,631 ($18,606 transferred-in costs and $11,025 conversion costs) and consisted of 450 units that were 70% complete as to conversion costs.
During July, a total of 4,800 units were completed and transferred out to Finished Goods Inventory.
The ending work in process inventory consisted of 300 units which were 60% complete as to conversion costs.
The following costs were incurred during July: direct materials $132,480; direct labor $60,000; and overhead costs $105,141.
Direct materials are added at the end of the process in the Packaging Department and conversion costs are incurred evenly throughout the production process.
REQUIRED:
A. Prepare a production report for July for the Assembly Department.
B. Give the general journal entry to record the transfer of the completed units from the Assembly Department to the Packaging Department for July.
C. Prepare a production report for July for the Packaging Department.
Explanation / Answer
Assembly department
2.
Journal entry to record transfer from assembly department to packing department
Work in progress packing department debit 200880
Work in progress assembly department credit 200880
3. Packing department
FIFO method Beggining units 350 Transferred out 4,650 Started into production 4500 Ending units 200 4850 4850 Equivalent units Material Conversion Beginning units 350 350 Completion in current period 0% 90% A 0 315 Units started and completed 4300 4300 Completion 100% 100% B 4300 4300 Ending Units 200 200 Completion 100% 35% C 200 70 Total units A+B+C 4500 4685 Cost per equivalent units Per unit cost Cost Total units Per unit cost Material cost 73800 4500 16.40 Conversion cost 126495 4685 27.00 Total 200295 43.40