1. Remington Shipping, Inc. is contemplating the use of process costing to track the costs of its operations. The operation consists of three segments (departments): receiving, shipping, and delivery. Containers are received at Remington's docks and sorted according to the ship they will be carried on. The containers are loaded onto a ship, which carries them to the appropriate port of destination. The containers are then off-loaded and delivered to the receiving company.
Remington Shipping wants to begin using process costing in the shipping department. Direct materials represent the fuel costs to run the ship, and "Containers in transit" represents work in process. Listed below is information about the shipping department's first month's activity.
| Containers in transit, April 1 |
|
0 |
|
|
| Containers loaded |
|
1,157 |
|
|
| Containers in transit, April 30 |
|
360 |
,40% |
of direct materials and |
|
|
|
20% |
of conversion costs |
(a) Determine the physical flow of containers for the month.---------------------------------------
| Physical flow of containers |
|
2. Rosenthal Company manufactures bowling balls through two processes: Molding and Packaging. In the Molding Department, the urethane, rubber, plastics, and other materials are molded into bowling balls. In the Packaging Department, the balls are placed in cartons and sent to the finished goods warehouse. All materials are entered at the beginning of each process. Labor and manufacturing overhead are incurred uniformly throughout each process. Production and cost data for the Molding Department during June 2012 are presented below.
|
Production Data
|
|
June
|
| Beginning work in process units |
|
0 |
|
| Units started into production |
|
25,300 |
|
| Ending work in process units |
|
2,300 |
|
| Percent complete-ending inventory |
|
40 |
% |
|
Cost Data
|
|
|
| Materials |
|
$227,700 |
| Labor |
|
61,640 |
| Overhead |
|
129,720 |
| Total |
|
$419,060
Determine the costs to be assigned to the units transferred and in process for June.
| Transferred out |
|
$
|
| Work in process, June 30 |
|
$
|
|
|