Question

5. Process Costing – Balance Sheet accounts, ending balances (4pts): Utopia, Co. makes popsicles in sequential processes, mixing and freezing. It uses process costing to account for production costs during each period. The following is information obtained from the source documents for Utopia Co. for the month of December:

Raw materials purchased (direct and indirect)	$208,200
Raw materials inventory (direct and indirect), beginning balance	$45,600
Direct materials used – Mixing Department	$95,200
Direct materials used – Freezing Department	$89,700
Direct labor used – Mixing Department	$24,800
Direct labor used – Freezing Department	$30,850
Applied Overhead – Mixing Department (@120% of DL costs in each department)	$29,760
Applied Overhead – Freezing Department (@120% of DL costs in each department)	$37,020
Indirect materials used	$11,100
Indirect labor used	$8,400
Other Factory overhead costs – Actual (e.g. factory rent, factory utilities)	$47,210
Work in process (WIP) inventory, beginning balance – Mixing Department	$61,600
Work in process (WIP) inventory, beginning balance – Freezing Department	$47,350
Costs assigned to units completed and transferred out of Mixing Department to the Freezing Department	$135,080
Finished goods inventory, beginning balance	$80,250
Costs assigned to units completed and transferred out of Freezing Department to Finished Goods	$161,770
Cost of goods sold	$187,420
Sales	$299,990

Using all of the information given above, determine the December 31^st ending balances of each the firm’s inventory accounts listed (you must show all of your work, either using formulas/calculations or T-accounts):

a) Raw Materials Inventory

b) WIP Inventory–Mixing

c) WIP Inventory–Freezing

d) Finished Goods Inventory

Answer 1

Raw Materials Inventory					WIP Inventory-Mixing
Beg. Bal.	45600				Beg. Bal.	61600
Purchases	208200	95200	DM-Mixing		DM	95200	135080	Trfsd. to Freezing
		89700	DM-Freezing		DL	24800
		11100	Indirect materials		OH	29760
End. Bal.	57800				End. Bal.	76280
WIP Inventory-Freezing					Finished Goods Inventory
Beg. Bal.	47350				Beg. Bal.	80250
DM	89700	161770	Trsfd. to FG		Goods manufactured	161770	187420	Cost of goods sold
DL	30850
OH	37020
Trsfd. from Mixing	135080
End. Bal.	178230				End. Bal.	54600