question archive Stillwater Manufacturing has a cycle time of less than a day, uses a Raw and In Process (RIP) account and expenses all conversion costs to Cost of Goods Sold
Stillwater Manufacturing has a cycle time of less than a day, uses a Raw and In Process (RIP) account and expenses all conversion costs to Cost of Goods Sold
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Stillwater Manufacturing has a cycle time of less than a day, uses a Raw and In Process (RIP) account and expenses all conversion costs to Cost of Goods Sold. At the end of each month, all inventories are counted; their conversion cost components are estimated and inventory account balances are adjusted accordingly. Raw material is backflushed from RIP to Finished Goods. The following information is for the month of August.
RIP beginning, including P 25,560 of conversion cost P 42,600
FG beginning, including P 27,000 of conversion cost 45,000
Raw materials purchased on credit 356,000
RIP end, including P 13,500 of conversion cost estimate 22,500
FG end, including P 9,600 of conversion cost estimate16,000
Direct labor - P 350,000; factory overhead - P 196, 150,000
Required: Prepare all journal entries that involve the RIP account and/or finished goods account.
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Answer:
1) Raw and In Process 356,000
Accounts Payable 356,000
2) Finished goods 364,040
Raw and In Process 364,040
Raw materials purchased 356,000
RIP beg. ( 42,600 - 25,560 ) 17,040
RIP end ( 22,500 - 13,500 ) (9,000)
Mat. content of units completed 364,040
3) Cost of goods sold 546,150
Accrued payroll 350,000
FO Applied 196,150
3) Cost of goods sold 375,640
Finished goods 375,640
Mat. content of units completed 364,040
FG beg. ( 45,000 - 27,000 ) 18,000
FG. end ( 16,000 - 9,600) ( 6,400 )
Mat. content of units sold 375,640
4) Cost of goods sold 29,460
Raw and In Process 12,060
Finished goods 17,400
Conversion cost ; RIP ; FG
End ; 13,500 ; 9,600
Beg. ; ( 25,560 ) ; (27,000 )
Increase (decrease) ; ( 12,060 ) ; ( 17,400 )
