ACC 214 – Cost Accounting  

Chapter 6 Comprehensive Process Costing Problem


Excel Assignment Number 3  



Well Products produces an antacid product that goes through two departments – Cooking and Bottling. The company has recently hired a new assistant accountant, who has prepared the following summary of production and costs for the Cooking Department for May using the weighted-average method.


 Cooking Department Costs:  


  Work in process inventory, May 1: 70,000 quarts,

  materials 60% complete, labor and overhead 30%         

  complete      $ 61,000*        

  Materials added during May  569,850

  Labor added during May  100,000

  Overhead applied during May 235,160

  Total department costs  966,010


 *Consists of materials, $39,000; labor $5,000; and overhead, $17,000         


 Cooking Department costs assigned to: 


  Quarts completed and transferred to the Bottling

  Department: 400,000 quarts at  ?  per quart       ?         

  Work in process inventory, May 31: 50,000 quarts,          

  Materials 70% complete, labor and overhead 40%         



 Total departmental costs assigned       ?

The new accountant has determined the cost per quart transferred to be $2.415, as follows:        



 Total departmental costs, 966,010    

   Quarts completed and transferred, 400,000         


However, the new accountant is unsure how to use this unit cost figure in assigning cost to the ending work in process inventory. In addition, the company’s general ledger shows only $898,460 in costs transferred from the Cooking Department to the Bottling Department, which does not agree with the $966,000 figure above.


The general ledger also shows the following costs incurred in the Bottling Department during May: materials used, $130,000, direct labor cost incurred, $80,000; and overhead cost applied to products, $158,000.




1. Prepare journal entries as follows to record activity in the company during May. Key your entries to the letters (a) through (g) below.   

 a. Raw materials were issued to the two departments for use in production.        

 b. Direct labor costs were incurred in the two departments.

 c. Manufacturing overhead costs were incurred, $400,000. (Credit Accounts Payable)       

The company maintains a single manufacturing Overhead account for the entire plant.       

 d. Manufacturing overhead cost was applied to production in each department using predetermined overhead rates. 

 e. Units completed as to processing in the Cooking Department were transferred to the       

     Bottling Department, $898,460. 

 f. Units completed as to processing in the Bottling Department were transferred to        

    Finished Gods, $1,300,000.  

g. Units were sold on account, $2,000,000. The Cost of Goods Sold was $1,250,000.        



2. Post the journal entries from (1) above to T-accounts. Balances in selected accounts on May 1 are given below:     


   Raw materials    $710,000         

   Work in Process – Bottling Department $85,000  

   Work in Process – Cooking Department $61,000  

   Finished Goods   $45,000


After posting the entries to the T-accounts, find the ending balance in the inventory accounts and the Manufacturing Overhead account. Use just one Manufacturing Overhead account, using debit amounts for actual or incurred overhead and credit amounts for assigning or applying overhead.


3. Prepare a production report for the Cooking Department for May using the FIFO method.        


4. Using the closeout to the COGS method, determine the over or underapplied overhead and show the journal entry to close the manufacturing overhead account. 


Submission: This problem should be worked in an Excel spreadsheet. You may organize the Excel spreadsheet any way you like, but you must organize it so that it can be easily followed. Use the part numbers and letters to help organize your answer. An assignment has been created in Blackboard under Module 6. This is the location where you can upload the document. Just open this assignment and there will be a place to upload documents.




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