Concept explainers
Color Explosion prepares and packages paint products. Color Explosion has two departments: Blending and Packaging. Direct materials are added at the beginning of the blending process (dyes) and at the end of the packaging process (cans). Conversion costs are added evenly throughout each process. The company uses the weighted-average method. Data from the month of May for the Blending Department are as follows:
Requirements
1. Compute the Blending Department’s equivalent units of production for direct materials and for conversion costs.
2. Compute the total costs of the units (gallons)
- a. completed and transferred out to the Packaging Department.
- b. in the Blending Department ending Work-in-Process Inventory.
Refer to your answers from Exercise E18-21.
Requirements
- 1. Prepare the journal entries to record the assignment of direct materials and direct labor and the allocation of manufacturing overhead to the Blending Department. Also, prepare the
journal entry to record the costs of the gallons completed and transferred out to the Packaging Department. Assume Labor costs are accrued and not yet paid. - 2.
Post the journal entries to the Work-in-Process Inventory—Blending T-account. What is the ending balance? - 3. What is the average cost per gallon transferred out of the Blending Department into the Packaging Department? Why would the company managers want to know this cost?
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Chapter 18 Solutions
Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
Additional Business Textbook Solutions
Horngren's Accounting (11th Edition)
Financial Accounting (12th Edition) (What's New in Accounting)
Horngren's Accounting (12th Edition)
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Construction Accounting And Financial Management (4th Edition)
Principles of Accounting Volume 1
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