Seebohm Fabrication Ltd manufactures frames for bicycles. Each frame passes through three processes: Cutting, Welding and Painting. In September, the Cutting Department of the Elizabeth plant reported the following data:
a. In Cutting, all direct materials are added at the beginning of the process.
b. Beginning work in process inventory consisted of 40,500 units, 20 percent complete as to conversion. Costs attached to this inventory:
o Direct materials, $1,215,000.
o Direct labour, $222,600.
o Applied overhead, $150,000.
c. Costs added to production during the month were direct materials, $2,565,000; direct labour, $3,471,150.
Overhead was assigned using the following information:
Inspection: $150 per inspection hour @ 4,000 inspection hours
Maintenance $750 per maintenance hour @ 1,600 maintenance hours
Receiving $300 per receiving order @ 2,000 receiving orders
d. At the end of the month, 121,500 units were transferred out to Welding, leaving 13,500 units in ending work in process, 25 percent complete.
Required (show all workings):
1. Using the Weighted Average method prepare a process cost report for the Cutting Department for September. Round to 4 decimal places for unit costs and to the nearest dollar in the process cost report. Prepare a journal entry that transfers the goods from Cutting to Welding.