Cost of Production and Journal Entries AccuBlade Castings Inc. casts blades for

Question

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 1,000 pounds of alloy in process, which were 40% complete as to conversion. The Work in Process balance for these 1,000 pounds was $146,400, determined as follows: Direct materials (1,000 x $140) $140,000 Conversion (1,000 x 40% x $16) 6,400 $146,400 During May, the Casting Department was charged $1,278,400 for 9,400 pounds of alloy and $56,640 for direct labor. Factory overhead is applied to the department at a rate of 150% of direct labor. The department transferred out 9,700 pounds of finished castings to the Machining Department. The May 31 inventory in process was 20% complete as to conversion. al. Prepare the May journal entry for the Casting Department for the materials charged to 1,278,400 V Work in Materials- 1,278,400 Feedbadk Check My Work a1. Remember there are three different areas of inventory; materials, work in process, and finished goods. a2. Prepare the May journal entry for the Casting Department for the conversion costs charged to production. If an amount box does not require an entry, leave it blank. Work in 141,600 56,640 V 84,960 ayable Feedbadk

Explanation / Answer

Solution:

b. WIP - Casting department May 31 balance = $97,300

c. Cost per equivalent unit of material in April = $140

Cost per equivalent unit of material in May = $136

Change in material cost = $140 - $136 = $4 decrease

Cost per equivalent unit of conversion in April = $16

Cost per equivalent unit of conversion in May = $15

Change in conversion cost = $16 - $15 = $1 decrease

Accublade Casting INC. Casting Department Computation of Equivalent unit (FIFO) Particulars Physical units Material Conversion Units to be accounted for: Beginning WIP Inventory 1000 Units started this period 9400 Total unit to be accounted for 10400 Units Accounted for: Units completed and transferred out From beginning inventory
Material - 0%
Conversion - 60% 1000 0 600 Started and completed currently 8700 8700 8700 Units in ending WIP
Material - 100%
Conversion - 20% 700 700 140 Total units accounted for 10400 9400 9440

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