acuBlade Castings Inc. casts blades for turbine engines. Within the Casting Department, alloy is first melted in a crucible, then poured into molds to produce the castings. On May 1, there were 700 pounds of alloy in process, which were 30% complete as to conversion. The Work in Process balance for these 700 pounds was $74,410, determined as follows: Direct materials (700 x $100) $70,000 Conversion (700 x 30% x $21) 4,410 $74,410 During May, the Casting Department was charged $633,600 for 6,600 pounds of alloy and $53,520 for direct labor. Factory overhead is applied to the department at a rate of 150% of direct labor. The department transferred out 6,800 pounds of finished castings to the Machining Department. The May 31 inventory in process was 20% complete as to conversion. a1. Prepare the May journal entry for the Casting Department for the materials charged to production. Work in Process-Casting Department Materials-Alloy

Question

Pierce Lawrence

Business

9 June, 12:59

acuBlade Castings Inc. casts blades for turbine engines. Within the Casting Department, alloy is first melted in a crucible, then poured into molds to produce the castings. On May 1, there were 700 pounds of alloy in process, which were 30% complete as to conversion. The Work in Process balance for these 700 pounds was $74,410, determined as follows: Direct materials (700 x $100) $70,000 Conversion (700 x 30% x $21) 4,410 $74,410 During May, the Casting Department was charged $633,600 for 6,600 pounds of alloy and $53,520 for direct labor. Factory overhead is applied to the department at a rate of 150% of direct labor. The department transferred out 6,800 pounds of finished castings to the Machining Department. The May 31 inventory in process was 20% complete as to conversion. a1. Prepare the May journal entry for the Casting Department for the materials charged to production. Work in Process-Casting Department Materials-Alloy

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Dax Tanner · Answer 1

For complete understanding lets first make EPU (Equivalent Production Unit)

Direct Material Conversion

Units completed &transferred out 6,800 6,800

Closing WIP 500 100 (500*20%)

Total units 7,300 6,900

Closing WIP units = Opening WIP + During the year - units completed

= 700 + 6,600 - 6,800

=500 units

On the basis of weighted average method following will be cost per unit:

Total Direct material cost/unit = (70,000 + 633,600) / 7,300 = 96.3835

Total conversion cost/unit = (4,410+53,520+80,280 (53,520*150%)) / 6,900=20.0304

Therefore, following would be the entries

WIP 767,400

Material 633,600

Conversion 133.800 (53,520+80,280)

Finished goods 791,615 (96.3838+20.0304) * 6,800

WIP 791,615

Working for closing unit

Material (500*96.3835) = 48,191

Conversion (500*20%*20.0304) = 2003.043