Reference no: EM131599272
Problem - Smith Steel
Smith Steel Company uses a process cost system to record the costs of manufacturing aluminum which requires a series of five processes. The inventory of Work in Process - Rolling (the last process) on September 1 and debits the account during September were as follows:
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Balance
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Item
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Debit
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Credit
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Debit
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Credit
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Balance, 1,200 units, ¾ completed
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$31,500
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From Smelting, 4,900 units
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$44,100
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Direct labor
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70,000
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Factory overhead
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37,100
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During September, 1,200 units in process on September 1 were completed, and of the 4,900 units entering the department, all were completed except 400 units that were ¾ completed.
Charges to Work in Process - Rolling for October were as follows:
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Balance
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Item
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Debit
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Credit
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Debit
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Credit
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From Smelting, 5,000 units
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$47,500
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Direct labor
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65,000
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Factory overhead
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36,640
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During October, the units in process at the beginning of the month were completed, and of the 5,000 units entering the department, all were completed except 800 units that were ? completed.
Required:
1. Prepare a cost of production report for the month of September and identify the amount transferred from WIP to Finished Good Inventory.
2. Prepare a cost of production report for the month of October and identify the amount transferred from WIP to Finished Good Inventory.