Problem: Process Costing
Scenario: YUM YUM COOKIES Company manufactures cookies. Materials are added in the Baking Department. After processing, the cookies are moved to the Packing Department where more materials are added. The completed packages are then moved to Finished Goods.
Task: Using the data below the month of July, determine the July Gross Profit using FIFO inventory methods.
June 30:?Raw Material Inventory: $235,000
??Baking Department : WIP # = 0 WIP $ = 0
??Packing Department : WIP # = 6000 cases at 80% completion, WIP$ = $95,000
??Finished Goods Inventory : WIP # 20,000 cases WIP $ = $300,000
July Transactions:
Materials Purchased on Account:?$520,000
# Cases started:???Baking Department: 50,000
?????Packing Department: 35,000
Materials Requisitioned:??Baking Dept:?$225,000 DM, $25,000 IM
?????Packing Dept: $40,250 DM, $9,750 IM
Labor Costs:????Baking Dept:?$106,000 DL, $12,000 IL
?????Packing Dept: $60,000 DL, $17,000 IL
Misc. Expenses:???Baking Dept: $18,000
?????Packing Dept: $14,600
Prepaid Expenses:???Baking Dept: $4,500
?????Packing Dept: $1000
Depreciation Expenses:??Baking Dept: $46,000
?????Packing Dept:?$ 15,000
FOH Applied:????Baking Dept:?$86,700
?????Packing Dept: $30,345
Sales on Account:???47,000 cases at $42 per case
July 31 WIP????Baking Dept: WIP = 40% complete
?????Packing Dept: 5000 cases at 10% completion