Problem:
Computing equivalent units, computing cost per equivalent unit; assigning costs; journalizing; second department, weighted-average method
Cool Spring Company produces premium bottled water. In the second department, the Bottling Department, conversion costs are incurred evenly throughout the bottling process, but packaging materials are not added until the end of the process. Costs in beginning Work in process inventory include transferred in costs of $1,700, direct labor of $700, and manufacturing overhead of $330. February data for the Bottling Department follow:
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COOL SPRING COMPANY Work in process inventory-Bottling Month Ended February 28, 2013
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Physical Units
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Dollars
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Physical Units
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Dollars
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Beginning inventory, January 31 (40% complete)
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12,000
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$ 2,730
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Transferred out
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152,000
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$ ?
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Production started:
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Transferred in
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163,000
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134,800
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Direct materials
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30,400
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Conversion costs:
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Direct labor
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33,100
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Manufacturing overhead
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16,300
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Total to account for
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175,000
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$217,330
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Ending inventory, February 28 (70% complete)
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23,000
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$ ?
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Requirements
1.Compute the Bottling Department equivalent units for the month of February. Use the weighted-average method.
2.Compute the cost per equivalent unit for February.
3.Assign the costs to units completed and transferred out and to ending Work in process inventory.
4.Prepare the journal entry to record the cost of units completed and transferred out.
5.Post all transactions to the Work in process inventory-Bottling Department T-account. What is the ending balance?