Cost of Production and Journal Entries

Airfoil Castings Inc. casts blades for turbine engines. Within the Casting Department, alloy is first melted in a crucible, then poured into molds to produce the castings. On March 1, there were 190 pounds of alloy in process, which were 60% complete as to conversion. The Work in Process balance for these 190 pounds was $25,536, determined as follows:

Direct materials (190 x $120) $22,800

Conversion (190 x 60% x $24)     2,736

$25,536

During March, the Casting Department was charged $237,500 for 1,900 pounds of alloy and $19,480 for direct labor. Factory overhead is applied to the department at a rate of 150% of direct labor. The department transferred out 2,040 pounds of finished castings to the Machining Department. The March 31 inventory in process was 44% complete as to conversion.

a. Prepare the following May journal entries for the Casting Department:

1. The materials charged to production.

2. The conversion costs charged to production.

3. The completed production transferred to the Machining Department.

b. Determine the Work in Process—Casting Department March 31 balance.

c. Compute and evaluate the change in the costs per equivalent unit for direct materials and conversion from the previous month (February).