Prepare the summary journal entry required to transfer units

Reference no: EM132016286

Problem - Wilson Dynamics makes flanges in a continuous process through two departments: Forging and Assembly. All direct materials are added at the beginning of the process in the Forging Department, whereas all direct materials are added at the end of the process in the Assembly Department. Conversion costs are incurred uniformly over time in both departments. As units are completed in the Forging Department, they are transferred to the Assembly Department. The costs associated with the transferred units are included in the computation of the Assembly Department's total costs. The information presented as follows was compiled at the end of July.

	Forging Department	Assembly Department
Beginning Inventories (on July 1):
Physical units in production carried forward from June 30	5,000	4,000
Costs:
Transferred Forging costs carried forward from June 30	$ 68,000
Direct materials costs carried forward from June 30	$ 45,000
Conversion costs carried forward from June 30	16,000	3,000
Current Production (in July):
Units started during July	75,000
Units in ending inventories as of July 31	8,000	16,000
Costs:
Forging costs transferred to Assembly during July
Direct materials costs incurred in July	$675,000	$720,000
Conversion costs incurred in July	608,000	191,400
Percentage of Completion:
Inventories with respect to conversion on July 1	40%	25%
Inventories with respect to conversion on July 31	75	30

Instructions

a. Complete the following requirements for the Forging Department.

1. Prepare a schedule showing units started and completed in the Forging Department during July.

2. Compute the equivalent units of direct materials and conversion for the Forging Department in July.

3. Determine the cost per equivalent unit of input resource for the Forging Department during July.

4. Prepare the summary journal entry required to transfer units from the Forging Department to the Assembly Department during July.

5. Compute the costs assigned to ending inventory in the Forging Department on July 31.

b. Complete the following requirements for the Assembly Department.

1. Prepare a schedule showing units started and completed in the Assembly Department during July.

2. Compute the equivalent units of direct materials and conversion for the Assembly Department in July. Direct materials include both those transferred in from the Forging Department and those added by the Assembly Department.

3. Determine the cost per equivalent unit of input resource for the Assembly Department during July.

4. Prepare the summary journal entry required to transfer units from the Assembly Department to Finished Goods Inventory during July.

5. Compute the costs assigned to ending inventory in the Assembly Department on July 31.

Note - Must be done in excel.

Reference no: EM132016286

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