The Portland Cement Manufacturing Company
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The Portland Cement Manufacturing Company, Inc. Manufactures cement. Its processing operations involve quarrying, grinding, blending, packing and sacking. For cost accounting and control purposes, there are four processing centers. Separate costs of production reports are prepared in detail with respect to these cost centers. The following information pertains to the operation of Grinding Department for July 2009: Units Materials Labor Factory Overhead Work in process, Beg. July 1 800 bags $12,000 $40,000 $16,000 Unit started in the production 40,000 bags Work in process, End, July 31 5,000 bags Cost added during the month $41,500 $321,500 $200,000 The beginning work in process was 100% complete with respect to materials and 60% complete with respect to labor and factory overhead. The ending work in process inventory was 90% complete with respect to materials and 30% complete with respect to labor and factory overhead. Required: Assume that the company uses the FIFO method of accounting for units and costs. 1. Compute the units to be assigned costs. 2. Compute the equivalent units for the month’s activity for the first department. 3. Determine the cost per equivalent units for the month for material & conversion. 4. Prepare the cost of production report (Allocated costs for completed and partially completed units for the month of July 2009.)
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Transcript of The Portland Cement Manufacturing Company
The Portland Cement Manufacturing Company, Inc. Manufactures cement. Its processing operations involve quarrying, grinding, blending, packing and sacking. For cost accounting and control purposes, there are four processing centers. Separate costs of production reports are prepared in detail with respect to these cost centers. The following information pertains to the operation of Grinding Department for July 2009:UnitsMaterialsLaborFactory Overhead
Work in process, Beg. July 1800 bags$12,000$40,000$16,000
Unit started in the production40,000 bags
Work in process, End, July 315,000 bags
Cost added during the month$41,500$321,500$200,000
The beginning work in process was 100% complete with respect to materials and 60% complete with respect to labor and factory overhead.The ending work in process inventory was 90% complete with respect to materials and 30% complete with respect to labor and factory overhead.Required: Assume that the company uses the FIFO method of accounting for units and costs.1. Compute the units to be assigned costs.2. Compute the equivalent units for the months activity for the first department.3. Determine the cost per equivalent units for the month for material & conversion.4. Prepare the cost of production report (Allocated costs for completed and partially completed units for the month of July 2009.)5. Prepare journal entries for the month of July for materials, labor and factory overhead.
