Gnomada Company manufactures garden gnomes (decorative lawn products) through two
production departments, Forming and Finishing. When processing is complete in the Forming
Department, the product is transferred to the Finishing Department. In the Finishing
Department, the product is sanded and painted. The paint (material) is added when the
process is 60% complete. Conversion costs are added evenly throughout the process. Data
for the Finishing Department for the month of October are given below:
Physical units for October:
Beginning work in process (October 1) 1,100 units
(Transferred in costs, ?%; paint materials, ?%; conversion costs, 70%)
Transferred in during October 10,300 units
Completed and transferred out during October 10,700 units
Ending work in process (October 31) ? units
(Transferred in costs, ?%; paint materials, ?%; conversion costs, 35%)
Costs for October: Beginning WIP Added in Oct.
Transferred in $ 7,650 $ 97,800
Paint materials 8,520 70,650
Conversion costs 5,630 131,850
Totals $21,800 $300,300
REQUIRED:
a. (1) Prepare the production cost report for the Finishing Department for October using the
first in, first out (FIFO) method. Costs per equivalent unit should be carried to four
decimals.
(2) Prepare the journal entry to transfer the cost of completed units out of production.
b. Repeat requirement (a) for the month of November. (HINT: BEGINNING INVENTORY
FOR NOVEMBER IS ENDING INVENTORY FOR OCTOBER (units, percentage of
completion, costs).) (If your spreadsheet is set up correctly, you should only need to
change some numbers in your input section.)
Physical units for November:
Beginning work in process (November 1) ? units
(Transferred in costs, ?%; paint materials, ?%; conversion costs, ?%)
Transferred in (started) during November 11,000 units
Completed and transferred out during October 10,500 units
Ending work in process (October 31) ? units
(Transferred in costs, ?%; paint materials, ?%; conversion costs, 75%)
Costs for November: Beginning WIP Added in Nov.
Transferred in $ ? $104,650
Paint materials ? 87,100
Conversion costs ? 145,700
Totals $ ? $337,450
(HINT: BEGINNING INVENTORY FOR NOVEMBER IS ENDING INVENTORY FOR
OCTOBER (units, percentage of completion, costs).)
c. Repeat requirements (a) and (b) using the weighted average method. Costs per
equivalent unit should be carried to four decimals.