Ast Co. produces its product through two processing departments. Direct materials are added at the start of production in the Cutting department, and conversion costs are added evenly throughout each process. The company uses monthly reporting periods for its weighted-average process costing system. The Work in Process Inventory-Cutting account has a balance of $87,300 as of October 1, which consists of $18,000 of direct materials and $69,300 of conversion costs. During the month, the Cutting department incurred the following costs: Direct materials $ 121,600 Conversion 866,800 At the beginning of the month, 31,500 units were in process. During October, the company started 143,000 units and transferred 153,000 units to the Assembly department. At the end of the month, the Cutting department's work in process inventory consisted of 21,500 units that were 80% complete with respect to conversion costs. Required: 1. Prepare the Cutting department's process cost summary for October using the weighted-average method. 2. Prepare the journal entry dated October 31 to transfer the cost of the partially completed units to Assembly.

Part 1. Prepare the Cutting department's process cost summary for October using the weighted-average method.

Debits: (Inputs)

                                                           $

Opening Work In Progress         87,300

Raw Materials                              121,600

Conversion Costs                      866,800        

Total                                          1,075,700

Credits : (Outputs)      

                                                           $

Closing Work In Progress            111,800

Completed and Transferred      963,900

Total                                           1,075,700

Part 2. Prepare the journal entry dated October 31 to transfer the cost of the partially completed units to Assembly

Assembly Department (debit) $ 963,900

Cutting Department (credit) $ 963,900

Explanation:

Step 1 Find the Total Cost In Assembly Department for Each Input Component

Raw Materials = 18000+121600=$139600

Conversion Costs = 69300+866800=$936100

Step 2 Find Total Equivalent Units for Each Input Component

Raw Materials = 21500 (closing work in progress- 100% ) + 153000( transferred- 100%) = 174500

Conversion = 17200 (closing work in progress - 80%) + 153000 (transferred - 100%) = 170200

Step 3 Calculate Cost per Equivalent Unit for Each Input Component

Raw Materials =  $139600/174500 = $0.80

Conversion Cost = $936100/170200 = $5.50

Total Equivalent Cost= $6.30

Step 4 Calculate Cost of Output Components

(1) Completed and Transferred = $6.30×153000

                                                  = $963,900

(2) Closing Work In Progress:

Raw Materials = $0.80×21500       = 17,200

Conversion Cost = $5.50×17500   =94,600

Total                                                 =111,800

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