The cost of direct materials transferred into the Rolling Department of Keystone Steel Company is $510,000

The cost of direct materials transferred into the Rolling Department of Keystone Steel Company is $510,000. The conversion cost for the period in the Rolling Department is $81,200. The total equivalent units for direct materials and conversion are 8,500 tons and 8,120 tons, respectively. Determine the direct materials and conversion costs per equivalent unit.


Answer:


Equivalent units of direct materials: 
Equivalent units of conversion: 
$510,000 
8,500 

$81,200 
8,120 

= $60 per ton 
= $10 per ton 

The costs per equivalent unit of direct materials and conversion in the Rolling Department of Keystone Steel Company are $60 and $10

The costs per equivalent unit of direct materials and conversion in the Rolling Department of Keystone Steel Company are $60 and $10, respectively. The equivalent units to be assigned costs are as follows:
                                                                                   Equivalent Units
                                                                     Direct Materials | Conversion
Inventory in process, beginning of period                           0 |    320
Started and completed during the period                      7,500 |  7,500
Transferred out of Rolling (completed)                        7,500 |  7,820
Inventory in process, end of period                              1,000 |    300
Total units to be assigned costs                                     8,500 |  8,120


The beginning work in process inventory had a cost of $25,000. Determine the cost of completed and transferred-out production and the ending work in process inventory.


Answer:


Direct 
Materials Conversion Total 
Costs Costs Costs 
Inventoryin process, balance…………………………    
Inventoryin process, beginning of period…………… 0 + 320 × $10   3,200 
Cost of completed beginning work in process………    $ 28,200 
Started and completed during the period…………… 7,500 × $60 + 7,500 × $10   525,000 
Transferred out of Rolling (completed)………………    $553,200 
Inventory in process, end of period…………………… 1,000 × $60 + 300 × $10     63,000 
Total costs assigned by the Rolling Dept. ……………    $616,200 
Completed and transferred-out  production………… $553,200    
Inventory in process, ending…………………………… $63,000   

The cost of materials transferred into the Rolling Department of Keystone Steel Company is $510,000 from the Casting Department.

The cost of materials transferred into the Rolling Department of Keystone Steel Company is $510,000 from the Casting Department. The conversion cost for the period in the Rolling Department is $81,200 ($54,700 factory overhead applied and $26,500 direct labor). The total cost transferred to Finished Goods for the period was $553,200. The Rolling Department had a beginning inventory of $25,000.

a. Journalize (1) the cost of transferred-in materials, (2) conversion costs, and (3) the costs transferred out to Finished Goods.

b. Determine the balance of Work in Process—Rolling at the end of the period.

Answer:

a. 

Work in Process—Rolling 81,200  

Factory Overhead—Rolling  54,700 

Wages Payable  26,500 

Finished Goods 553,200  

Work in Process—Rolling  553,200 

b. $63,000  ($25,000 + $510,000 + $81,200 – $553,200)