Cost of Production and Journal Entries
AccuBlade Castings Inc. casts blades for turbine engines. Within the Casting Department, alloy is first melted in a crucible, then poured into molds to produce the castings. On May 1, there were 220 pounds of alloy in process, which were 60% complete as to conversion. The Work in Process balance for these 220 pounds was $32,296, determined as follows:
| 1 | Direct materials (220 × $136) | $29,920.00 |
| 2 | Conversion (220 × 60% × $18) | 2,376.00 |
| 3 | $32,296.00 |
During May, the Casting Department was charged $408,900 for 2,900 pounds of alloy and $28,280 for direct labor. Factory overhead is applied to the department at a rate of 150% of direct labor. The department transferred out 2,920 pounds of finished castings to the Machining Department. The May 31 inventory in process was 20% complete as to conversion.
Required:
| A. | (1)On May 1, prepare the journal entry for the Casting Department for the materials charged to production.*(2)On May 31, prepare the journal entry for the Casting Department for the conversion costs charged to production.*(3)On May 31, prepare the journal entry for the Casting Department for the completed production transferred to the Machining Department.**Refer to the Chart of Accounts for exact wording of account titles. |
| B. | Determine the Work in Process-Casting Department May 31 balance. |
| C. | Compute and evaluate the change in the costs per equivalent unit for direct materials and conversion from the previous month (April). |