Question

Luker Corporation uses a process costing system. The company had $176,500 of beginning Finished Goods Inventory on October 1. It transferred in $853,000 of units completed during the period. The ending Finished Goods Inventory balance on October 31 was $174,200. The entry to account for the cost of goods sold in October is:

• Debit Cost of Goods Sold $855,300; credit Finished Goods Inventory $855,300.

• Debit Cost of Goods Sold $855,300; credit Work in Process Inventory $855,300.

• Debit Cost of Goods Sold $853,000; credit Finished Goods Inventory $853,000.

• Debit Finished Goods Inventory $853,000; credit Work in Process Inventory $853,000.

• Debit Finished Goods Inventory $174,200; credit Cost of Goods Sold $174,200.

2.

Following is a partial process cost summary for Mitchell Manufacturing's Canning Department.

Equivalent Units of Production	Direct Materials					Conversion
Units Completed and transferred out			40,000					40,000
Units in Ending Work in Process:
Direct Materials (18,000 × 100%)			18,000
Conversion (18,000 × 60%)								10,800
Equivalent Units of Production			58,000					50,800
Cost per Equivalent Unit
Costs of beginning work in process		$	42,300				$	62,200
Costs incurred this period			141,700					190,600
Total costs		$	184,000				$	252,800
Cost per equivalent unit		$	3.17	per EUP			$	4.98	per EUP

The total materials costs transferred out of the Canning Department equals:

• $126,800.

• $161,036.

• $199,200.

• $184,000.

• $183,860.

Answer 1

Luker
Beginning finished goods inventory	176500
(+) Units completed during the period	853000
(-) Ending finished goods inventory	174200
Cost of goods sold	855300
Answer : Debit cost of goods sold $855,300; credit finished goods inventory $855,300

2.
Mitchell Manufacturing
Total materials cost transferred out of the Canning departments = Units completed and transferred out * Direct materials cost per equivalent unit = 40000 * 3.17	126800