Requirement: 1 What journal entry(s) would have been made during the month to record manufacturing costs? (Use Wages Payable as the credit for the direct labor costs.) 2. What journal entry is needed at the end of the month to transfer the cost of the butter out of the Churning Department and into the next department, the Forming Department? 3. Post the journal entries to the "Work in Process Inventory - Churning Department" T-account.
Data:
Johnson Dairy Churning Department |
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Month Ended January 31 |
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Production Cost Report |
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Flow of |
Equivalent Units |
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Physical |
Direct |
Conversion |
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Flow of Production |
Units |
Materials |
Costs |
|
Units to account for: |
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Beginning work in process, January 1 |
120,000 |
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Plus: Started in production during January |
1,600,000 |
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Total physical units to account for |
1,720,000 |
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Units accounted for: |
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Completed and transferred out |
1,550,000 |
1,550,000 |
1,550,000 |
|
Plus: Ending work in process, January 31 |
170,000 |
170,000 |
85,000 |
|
Total physical units accounted for |
1,720,000 |
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Total equivalent units |
1,720,000 |
1,635,000 |
Direct |
Conversion |
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Total Costs to Account for and Cost per Equivalent Unit |
Materials |
Costs |
|
Beginning work in process |
$293,600 |
$184,100 |
|
Plus: Costs added during January |
1,650,000 |
568,000 |
|
Total costs to account for |
1,943,600 |
752,100 |
|
Divided by: Total equivalent units |
1,720,000 |
1,635,000 |
|
Cost per equivalent unit |
$1.13 |
$0.46 |
Direct |
Conversion |
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Assignment of total costs: |
Materials |
Costs |
Total |
|
Completed and transferred out: |
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Equivalent units completed and transferred out |
1,550,000 |
1,550,000 |
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Multiplied by: Cost per equivalent unit |
$1.13 |
$0.46 |
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Costs assigned to units completed and transferred out |
$1,751,500 |
$713,000 |
$2,464,500 |
Ending work in process: |
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Equivalent units in ending work in process, January 31 |
170,000 |
85,000 |
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Multiplied by: Cost per equivalent unit |
$1.13 |
$0.46 |
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Costs assigned to units in ending work in process, January 31 |
$192,100 |
$39,100 |
231,200 |
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Total costs accounted for |
$2,695,700 |
Units in beginning Work in Process (WIP) inventory |
120,000 units |
Units started during the month (all direct materials, including cream and salt, are added at the beginning of the churning process) |
1,600,000 units |
Units in ending Work in Process (WIP) inventory (50% of the way through the process) |
170,000 units |
Cost information is as follows: |
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WIP - Churning Department balance as of January 1: |
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Direct material cost included in beginning WIP balance |
293,600 |
Conversion cost included in beginning WIP balance |
184,100 |
Beginning balance, WIP, January 1 |
$477,700 |
Manufacturing costs incurred during January: |
|
Direct materials used |
$1,650,000 |
Direct labor |
8,000 |
Manufacturing overhead |
560,000 |
Total manufacturing costs entered into production during January |
$2,218,000 |
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