Question

1.

The costs per equivalent unit of direct materials and conversion in the Rolling Department of Kraus Steel Company are $1.65 and $0.25, respectively. The equivalent units to be assigned costs are as follows:

	Equivalent Units
	Direct Materials		Conversion
Inventory in process, October 1	0		3,100
Started and completed during October	52,000		52,000
Transferred out of Rolling (completed)	52,000		55,100
Inventory in process, October 31	3,000		1,200
Total units to be assigned costs	55,000		56,300

The beginning work in process inventory on October 1 had a cost of $2,080. Determine the cost of completed and transferred-out production, the ending work in process inventory, and the total costs assigned by the Rolling Department.

Completed and transferred-out production
Inventory in process, October 31
Total costs assigned by the Rolling Department

2.

In October, the cost of materials transferred into the Rolling Department from the Casting Department of Kraus Steel Company is $505,000. The conversion cost for the period in the Rolling Department is $103,600 ($60,600 factory overhead applied and $43,000 direct labor). The total cost transferred to Finished Goods for the period was $500,000. The Rolling Department had a beginning inventory of $25,700.

a1. Journalize the cost of transferred-in materials. If an amount box does not require an entry, leave it blank.

	Work in Process-Rolling
	Work in Process-Casting

a2. Journalize the conversion costs. If an amount box does not require an entry, leave it blank.

	Work in Process-Rolling
	Factory Overhead-Rolling
	Wages Payable

a3. Journalize the costs transferred out to Finished Goods. If an amount box does not require an entry, leave it blank.

	Finished Goods
	Work in Process-Rolling

b. Determine the balance of Work in Process—Rolling at the end of the period.
_______________

Answer 1

1) Completed and transferred out = (52000*1.65+55100*.25)+2080 = 101655

Cost of ending work in process = (3000*1.65+1200*.25) = 5250

Total cost assigned by rolling Department = 101655+5250 = 106905

2) Journal entry

a1. Journalize the cost of transferred-in materials. If an amount box does not require an entry, leave it blank.

	Work in Process-Rolling	505000
	Work in Process-Casting		505000

a2. Journalize the conversion costs. If an amount box does not require an entry, leave it blank.

	Work in Process-Rolling	103600
	Factory Overhead-Rolling		60600
	Wages Payable		43000

a3. Journalize the costs transferred out to Finished Goods. If an amount box does not require an entry, leave it blank.

	Finished Goods	500000
	Work in process-Rolling		500000

b. Determine the balance of Work in Process—Rolling at the end of the period.
634300-500000 = 134300