Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac

Exercise 49

Work in process account data for two months; cost of production reports
Pittsburgh Aluminum Company uses a process cost system to record the costs of manufacturing rolled aluminum, which consists of the smelting and rolling processes. Materials are entered from smelting at the beginning of the rolling process. The inventory of Work in ProcessRolling on September 1, 2016, and debits to the amount during September were as follows:

During September, 2,600 units in process on September 1 were completed, and of the 28,900 units entering the department, all were completed except 2,900 units that were
completed.
Charges to Work in ProcessRolling for October were as follows:

During October, the units in process at the beginning of the month were completed, and of the 31,000 units entering the department, all were completed except 2,000 units that were
completed.
Instructions
1. Enter the balance as of September 1, 2016, in a four-column account for Work in ProcessRolling. Record the debits and the credits in the account for September. Construct a cost of production report and present computations for determining (a) equivalent units of production for materials and conversion, (b) costs per equivalent unit, (c) cost of goods finsished, differentiating between units started in the prior period and units started and finished in September, and (d) work in process inventory.
2. Provide the same information for October by recording the October transactions in the four-column work in process account. Construct a cost of production report, and present the October computations (a through d) listed in part (1).
3. Comment on the change in costs per equivalent unit for August through October for direct materials and conversion cost.