Required information Skip to question [The following information applies to the questions displayed below.] Tamar Co. manufactures a single product in two departments. All direct materials are added at the beginning of the Forming process. Conversion costs are added evenly throughout the process. During May, the Forming department started 21,600 units, and transferred 22,200 units of product to the Assembly department. Its 3,000 units of beginning work in process consisted of $19,800 of direct materials and $221,940 of conversion costs. It has 2,400 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month, $496,800 of direct materials costs and $2,165,940 of conversion costs were charged to the Forming department. The following additional information is available for the Forming department. Beginning work in process consisted of 3,000 units that were 100% complete with respect to direct materials and 40% complete with respect to conversion. Of the 22,200 units transferred out, 3,000 were from beginning work in process. The remaining 19,200 were units started and completed during May. Assume that Tamar uses the FIFO method to account for its process costing system. 2. Prepare the journal entry dated May 31 to transfer the cost of units to Assembly.

Tamar Co.

Journal Entry:

May 31: Debit Work in Process (Assembly):

            Materials costs $510,600

           Conversion costs $2,097,900

Credit Work in Process (Forming) $2,608,500

To transfer the cost of units to the Assembly Department.

Explanation:

a) Data and Calculations:

                                                 Units     Materials         Conversion

Beginning work in process    3,000        100%                 80%

Units started in May             21,600

Total units available            24,600

Units transferred out          22,200

Ending work in process       2,400

Equivalent units of production:

Beginning work in process        3,000             0 (0%)           1,800 (60%)

Units started and completed   19,200    19,200 (100%)     19,200 (100%)

Ending work in process            2,400      2,400 (100%)       1,920 (80%)

Equivalent units                                       21,600               22,920

Cost of production:

Costs incurred during the year             $496,800          $2,165,940

Equivalent units                                           21,600                22,920

Cost per equivalent units                        $23                    $94.50

Allocation of costs:

Units transferred out             $510,600     $2,097,900           $2,608,500

                                       ($23 * 22,200)     ($94.5 * 22,200)

Ending work in process         $55,200          $181,440               $236,640

Journal Entry Analysis:

Work in Process (Assembly): Materials costs $510,600 Conversion costs $2,097,900  Work in Process (Forming) $2,608,500