ACCOUNTING 132 Fall 2015 Process Costing Case - 20 points Dr. Huff Homeglow Furniture Company makes coffee tables for home use. The process involves work in two departments: Assembly, where the tables are constructed, and Staining,

ACCOUNTING 132                                                                                                    Fall  2015

Process Costing Case  - 20 points                                                                                  Dr. Huff

            Homeglow Furniture Company makes coffee tables for home use.  The process involves work in two departments:  Assembly, where the tables are constructed, and Staining, where a finish is applied to the wood.

            In the Assembly Department, Direct Material is added at the beginning of the process, Conversion Costs are added evenly throughout the process, and Inspection is performed at the end of the process (Normal Spoilage is 5% of good units).  In the Staining Department, Direct Material is added at the beginning of the process, Conversion Costs are added evenly throughout the process, no inspection is made in this department.  The FIFO method of process costing is used.  (Round cost per equivalent unit to 4 decimal places where necessary.)

            You are hired by the company at the beginning of October.  You are to complete the production cost worksheets for both departments for the months of August and September.  You are also asked to make the end-of-the month journal entry (not the recording of DM and CC) for each department for each month and to summarize the activity in each Work-In-Process account over the two month period using T-accounts.  (Round to whole dollars in the Assignment of Costs section.)  Assume that the regular day-to-day entries for the requisition of DM and the application of CC have been made by an accounting staff member.

Assembly Department - August                     Assembly Department - September

BI                      300 units  (cc=40%)              BI                               

Started            1,800 units                              Started            2,350 units

Completed and                                               Completed and          

  Trans. Out     1,920 units                                Trans. Out     2,240 units

EI                         95 units  (cc=60%)             EI                         78 units  (cc=50%)

Costs:                                                              Costs:

BI - DM          $ 16,500                                  BI -

        CC           $   5,640

Current                                                            Current

       DM           $108,000                                      DM             $137,475

       CC            $  87,390                                      CC              $110,403

Staining Department - August                                    Staining Department - September

BI                      470 units  (cc=20%)              BI

Completed     2,264  units                               Completed                  2,221 units

  and Tr Out                                                      and Tr Out

EI                      126 units (cc=50%)               EI                                   145 units  (cc=20%)

Costs:                                                              Costs:

BI - Transf.     $37,060

        DM          $26,540                                                          

        CC           $ 4,210

Current                                                            Current

  DM                $  30,720                                   DM                            $  35,392

  CC                 $122,815                                   CC                             $115,911

Check Figures:

            Assembly - August                 Ending Inventory - CC                       $  2,565

            Assembly - September            Ending Inventory - CC                       $  1,833

            Staining - August                    Ending Inventory – Transf-In           $ 13,733

            Staining - September               Ending Inventory – Transf-In           $ 16,064          

Requirements:

This assignment should be prepared as a computer assignment by building a template.

Prepare one template for each department.  Use a data section and a report page.  The amounts in the report page should be calculated using formulas.  (See the general computer instructions on Blackboard.)

Order for turn-in:

1.         Data section and report for the Assembly Department for August

2.         Data section and report for the Assembly Department for September.

3.         Cell Formulas page for the Assembly Department.

4.         Data section and report for the Staining Department for August.

5.         Data section and report for the Staining Department for September.

6.         Cell Formulas page for the Staining Department.

7.         Journal entries.  (A maximum of 5 and a minimum of 4)

8.         T-accounts ONE for each department covering the two months of activity.