Chapter 20, Problem P20.40BPGB

Preparing a production cost report, beginning WIP, no costs transferred in; journal entries

Learning Objectives
2,3,5
1. Cost per
EUP forCC
$1.40

Smith Paper Co. produces the paper used by wallpaper manufacturers. Smith's four-stage process includes mixing, cooking, rolling, and cutting. On March 1, the Mixing Department had 400 rolls in process. During March, the Mixing Department completed the mixing process for those 400 rolls and also started and completed the mixing process for an additional 4,100 rolls of paper. The department started but did not finish the mixing process for an additional 500 rolls, which were 20% complete with respect to both direct materials and conversion work at the end of March. Direct materials and conversion costs are incurred evenly throughout the mixing process. The Mixing Department compiled the following data for March:

	DirectMaterials	DirectLabor	Manufacturing Overhead Allocated	TotalCosts
Beginning inventory, Mar. 1	$ 475	$ 275	$300	$1,050
Costs added during March	5,045	2,900	2,965	10,910
Total costs	$ 5,520	$ 3,175	$ 3,265	$ 11,960

Requirements

1. Prepare a production cost report for the Mixing Department for March. The company uses the weighted-average method.
2. Journalize all transactions affecting the company's mixing process during March. Assume labor costs are accrued and not yet paid.