Desert File Cabinet U.S.A., a manufacturer of metal filing cabinets, uses a process cost system. The file cabinets pass through a series of production departments, one of which is the Lock Department. Materials are added at the
95 percent stage of completion
in the Lock Department. Shown below are the summary of units and the summary costs charged to the Lock Department during the month of April:
Summary of Units
Beginning Work in Process ................................................ 500
Units transferred in from Drawer Dept. during April........... 2,000
Ending Work in Process (50% complete as to conversion costs) 400
Units completed and transferred to Painting Dept. during April 2,100
Summary of Costs
Beginning Work in Process:
(transferred-in Costs, $20,000; conversion costs, $850) $ 20,850
Costs transferred in from Drawer Assembly Dept.......... 104,000
Manufacturing costs incurred in April:
Direct materials ................................................... 12,600
Conversion costs.................................................. 9,500
Total costs to account for........................................... $146,950
Instructions:
- Prepare a cost of production report for April.
- Prepare journal entries to record:
(1) The transfer of the 2,000 file cabinets from the Drawer Assembly Department into the Lock Assembly Department.
(2) Manufacturing costs charged to the Lock Assembly Department during April.
(3) Transfer of the completed file cabinets from the Lock Assembly Department to the Painting Department.
- Post the above entries to a “T” account, making sure it balances with the amount you assigned to ending work in process on the cost of production report.