Problem
Vaasa Chemicals makes a product by way of two processes - Mixing & Refining. Its process costing system in the Mixing Department has two direct cost categories (Chemical P & Chemical Q) and one conversion costs pool. Chemical P is introduced at the start of the operations in the Mixing Department and Chemical Q is added when the product is three-fourths (75%) completed in the Mixing Department.
The following information pertains to the Mixing department for July:
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Units
|
|
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Work in process inventory, July 1
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0
|
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Started production
|
50,000
|
|
Completed and transferred to Refining Department
|
35,000
|
|
Ending work in process inventory [two-thirds (66?%)of the way through the Mixing process]
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15,000
|
|
Costs
|
|
|
Beginning WIP inventory
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$0
|
|
Costs added during July:
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|
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Chemical P
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250,000
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|
Chemical Q
|
70,000
|
|
Direct Labour
|
32,000
|
|
Manufacturing Overhead
|
103,000
|
Required:
i) Compute the equivalent units in the Mixing Department for direct materials and for conversion costs.
ii) Compute:
a) the cost of the units completed and transferred out to the Refining Department.
b) the cost of work in process inventory as of July 31.
iii) Prepare the journal entry to record the cost of the units completed and transferred out to the Refining Department.
iv) Post the journal entries to the Work in Process Inventory - Mixing T-account. What is the ending balance?