Question

Luker Corporation uses a process costing system. The company had $176,500 of beginning Finished Goods Inventory...

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.

Homework Answers

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
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