Because most of the parts for its irrigation systems are standard, Waterways handles the majority of its manufacturing as a process cost system. There are multiple process departments. Three of these departments are the Molding, Cutting, and Welding departments. All items eventually end up in the Package department which prepares items for sale in kits or individually. The following information is available for the Molding department for January:
Work in process beginning:
Units in process
22,000
Stage of completion for materials
80%
Stage of completion for labor and overhead
30%
Costs in work in process inventory:
Materials
$168,360
Labor
67,564
Overhead
17,270
Total costs in beginning work in process
$253,194
Units started into production in January
60,000
Units completed and transferred in January
58,000
Costs added to production:
Materials
$264,940
Labor
289,468
Overhead
60,578
Total cots added into production in January
$614,986
Work in process ending
Units in process
24,000
Stage of completion for materials
50%
Stage of completion for labor and overhead
10%
Instructions:
Prepare a production cost report for Waterways using the weighted-average method and then show the journal entry for transferring the units from Molding to the Cutting Department.