Question:
Computing equivalent units and assigning costs to completed units and ending work in process; no beginning work in process inventory or cost transferred in
Reed Paper, Co., produces the paper used by wallpaper manufacturers. Reed's fourstage process includes mixing, cooking, rolling, and cutting. During March, the Mixing Department started and completed mixing for 4,520 rolls of paper. The department started but did not finish the mixing for an additional 500 rolls, which were 20% complete with respect to both direct materials and conversion work at the end of March. Direct materials and conversion costs are incurred evenly throughout the mixing process. The Mixing Department incurred the following costs during March:
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Work in process inventory-Mixing
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Bal, Mar 1
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0
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Direct materials
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5,775
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Direct labor
|
620
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Manufacturing overhead
|
6,310
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Requirements
1.Compute the number of equivalent units and the cost per equivalent unit in the Mixing Department for March.
2.Show that the sum of (a) cost of goods transferred out of the Mixing Department and (b) ending Work in process inventory-Mixing equals the total cost accumulated in the department during March.
3.Journalize all transactions affecting the company's mixing process during March, including those already posted.