Managerial Accounting

Question 3

#3 Jackie Corporation produces cat litter. It is produced in a single continuous process with DM added at the beginning of the process, and Zeus uses the weighted-average process costing method of accounting for production.

The production process requires constant utilization of facilities and equipment, as well as direct labor by skilled technicians. As a result, direct labor and factory overhead are both deemed to be introduced uniformly throughout production. Jackie Corporation had 4,000 units in beginning WIP and started 10,000 units in the month of July. 8,000 units were completed during the month. WIP in process was 30% complete with respect to conversion costs at the end of the mont.

The above beginning work in process inventory had an assigned cost of $2,000,000, divided between direct materials (25%), direct labor (30%), and factory overhead (45%).

Additional costs incurred during July were $3,000,000, divided between direct materials (15%), direct labor (25%), and factory overhead (60%).

1. Prepare a schedule showing the reconciliation of units, calculation of equivalent units of production, cost per equivalent units of production and the calculation of cost of goods manufactured and ending work in process. (20 points). Journalize the period end inventory adjustment for Cost of Goods Manufactured (5 points).