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

Answer :

(a). Raw material inventory

Beg. Bal	45600	-	-
Purchases	208200	95200	DM-Mixing
-	-	89700	DM-Freezing
-	-	11100	Indirect materials
End.Bal	57800	-	-

(b). WIP inventory - mixing

Beg Bal	61600	-	-
DM	95200	135080	Trfsd.to Freezing
DL	24800	-	-
OH	29760	-	-
End. Bal	76280	-	-

(c). WIP inventory - freezing

Beg.Bal	47350	-	-
DM	89700	161770	Trsfd.to FG
DL	30850	-	-
OH	37020	-	-
Trsfd.from Mixing	135080	-	-
End.Bal	178230	-	-

(d). Finished goods inventory

Beg. Bal	80250	-	-
Goods manufactured	161770	187420	Cost of goods sold
End. Bal	54600	-	-

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