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Husky Ltd. manufactures toys using a continuous production process that flows through two departments: Forming and Finishing. In the forming department, various components are built and are transferred to the finishing department. In the finishing department, those components are assembled into Husky's final product and once finished, are transferred to Husky's Finished Goods Inventory. Any spoilage is detected at the end of the process (i.e. when the toys are 100% complete). Husky uses the FIFO method of accounting for costs. In the Finishing Department, Direct materials are added at 70% of conversion and conversion costs are added evenly throughout the process. Finishing Department Transferred Physical Units $ 76,400 Direct Materials Conversion $ 30,062 Work in Process January 1 Degree of Completion in beginning WIP Units Transferred in from Forming in January Good Units Transferred Out 37,000 232,500 Copyrigh Work In Process January 31 Normal Spoilage as a percentage of good units completed Degree of Completion in Ending WIP Costs added in January Required: 240,000 24,000 2% 65% 50% $488,250 $26,400 $288,375 Prepare the Journal Entry(ies) to transfer the costs of production out of the Finishing Department for January. Prepare a Cost of Production Worksheet for the Finishing Department to show how the journal entries are created.

Husky Ltd. manufactures toys using a continuous production process that flows through two departments: Forming and Finishing. In the forming department, various components are built and are transferred to the finishing department. In the finishing department, those components are assembled into Husky's final product and once finished, are transferred to Husky's Finished Goods Inventory. Any spoilage is detected at the end of the process (i.e. when the toys are 100% complete). Husky uses the FIFO method of accounting for costs. In the Finishing Department, Direct materials are added at 70% of conversion and conversion costs are added evenly throughout the process. Finishing Department Transferred Physical Units $ 76,400 Direct Materials Conversion $ 30,062 Work in Process January 1 Degree of Completion in beginning WIP Units Transferred in from Forming in January Good Units Transferred Out 37,000 232,500 Copyrigh Work In Process January 31 Normal Spoilage as a percentage of good units completed Degree of Completion in Ending WIP Costs added in January Required: 240,000 24,000 2% 65% 50% $488,250 $26,400 $288,375 Prepare the Journal Entry(ies) to transfer the costs of production out of the Finishing Department for January. Prepare a Cost of Production Worksheet for the Finishing Department to show how the journal entries are created.

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter6: Process Costing
Section: Chapter Questions
Problem 38P: Healthway uses a process-costing system to compute the unit costs of the minerals that it produces....
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Husky Ltd. manufactures toys using a continuous production process that flows through two departments: Forming and Finishing. In the forming department, various components are built and are transferred to the finishing department. In the finishing department, those components are assembled into Husky's final product and once finished, are transferred to Husky's Finished Goods Inventory. Any spoilage is detected at the end of the process (i.e. when the toys are 100% complete). Husky uses the FIFO method of accounting for costs. In the Finishing Department, Direct materials are added at 70% of conversion and conversion costs are added evenly throughout the process. Finishing Department Transferred Physical Units $ 76,400 Direct Materials Conversion $ 30,062 Work in Process January 1 Degree of Completion in beginning WIP Units Transferred in from Forming in January Good Units Transferred Out 37,000 232,500 Copyrigh Work In Process January 31 Normal Spoilage as a percentage of good units completed Degree of Completion in Ending WIP Costs added in January Required: 240,000 24,000 2% 65% 50% $488,250 $26,400 $288,375 Prepare the Journal Entry(ies) to transfer the costs of production out of the Finishing Department for January. Prepare a Cost of Production Worksheet for the Finishing Department to show how the journal entries are created.
Transcribed Image Text:Husky Ltd. manufactures toys using a continuous production process that flows through two departments: Forming and Finishing. In the forming department, various components are built and are transferred to the finishing department. In the finishing department, those components are assembled into Husky's final product and once finished, are transferred to Husky's Finished Goods Inventory. Any spoilage is detected at the end of the process (i.e. when the toys are 100% complete). Husky uses the FIFO method of accounting for costs. In the Finishing Department, Direct materials are added at 70% of conversion and conversion costs are added evenly throughout the process. Finishing Department Transferred Physical Units $ 76,400 Direct Materials Conversion $ 30,062 Work in Process January 1 Degree of Completion in beginning WIP Units Transferred in from Forming in January Good Units Transferred Out 37,000 232,500 Copyrigh Work In Process January 31 Normal Spoilage as a percentage of good units completed Degree of Completion in Ending WIP Costs added in January Required: 240,000 24,000 2% 65% 50% $488,250 $26,400 $288,375 Prepare the Journal Entry(ies) to transfer the costs of production out of the Finishing Department for January. Prepare a Cost of Production Worksheet for the Finishing Department to show how the journal entries are created.
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