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 900 pounds of alloy in process, which were 60% complete as to conversion. The Work in Process balance for these 900 pounds was $140,940, determined as follows:

Direct materials (900 x $150) $135,000
Conversion (900 x 60% x $11) 5,940
$140,940
During May, the Casting Department was charged $1,241,000 for 8,500 pounds of alloy and $34,040 for direct labor. Factory overhead is applied to the department at a rate of 150% of direct labor. The department transferred out 8,700 pounds of finished castings to the Machining Department. The May 31 inventory in process was 50% complete as to conversion.

a1. Prepare the May journal entry for the Casting Department for the materials charged to production.

Work in Process-Casting Department
Materials-Alloy
a2. Prepare the May journal entry for the Casting Department for the conversion costs charged to production. If an amount box does not require an entry, leave it blank. Round all amounts to the nearest whole dollar.

Work in Process-Casting Department
Wages Payable
Factory Overhead
a3. Prepare the May journal entry for the Casting Department for the completed production transferred to the Machining Department. Round all amounts to the nearest whole dollar.

Work in Process-Machining Department
Work in Process-Casting Department
b. Determine the Work in Process—Casting Department May 31 balance.
$105,700

c. Compute the change in costs per equivalent unit for direct materials and conversion from the previous month (April).

Cost per Equivalent Unit
Change in materials Decrease $4
Change in conversion Decrease $1