Kimball Company is a cosmetics manufacturer. Its assembly department receives raw cosmetics from the molding department. The assembly department places the raw cosmetics into decorative containers and transfers them to the packaging department. The assembly department’s Work in Process Inventory account had a $40,000 balance as of August 1. During August, the department incurred raw materials, labor, and overhead costs amounting to $36,000, $42,500, and $40,000, respectively. The department transferred products that cost $171,000 to the packaging department. The balance in the assembly department’s Work in Process Inventory account as of August 31 was $41,500. Required Determine the cost of raw cosmetics transferred from the molding department to the assembly department during August.
i would like get the answer for the above question from a simple T-account of Assembly department for better understanding.
Assembly department | |||
Date Particulars | Debit | Date Particulars | Credit |
August 1 Opening WIP | $40,000 | During Aug. Cost of material transferred to next dept. | $171,000 |
During Aug. Material transferd from Molding dept (Balancing figure). | $54,000 | Aug 31 Closing stock | $41,500 |
During Aug. Cost incurred (Please refer note below) | $118,500 | ||
$212,500 | $212,000 |
Note:
Cost incurred during august in assemebly department = raw materials + labor cost + overhead costs
= $36,000 + $42,500 + $40,000
= $118,500
****Cost of raw material transferred from the molding dept. during august
= $171,000 + $41,500 - $118,500 - $40,000
= $54,000
Get Answers For Free
Most questions answered within 1 hours.