PROCESS

COSTING
ASSIGNMENT-1
1. Varen Company produced 50,000 metal components for tractors. There were no
beginning or ending work-in-process inventories in any department. Varen incurred the
following costs for January:
Molding Grinding Finishing
Department Department Department
Direct Materials $6,500 $2,600 $4,000
Direct Labor 5,000 4,400 6,000
Applied Overhead 8,500 7,000 5,500

Required:
a. Calculate the costs transferred out of each department
b. Prepare the journal entries corresponding to theses transfers. Also, prepare the
journal entry for Grinding that reflects the costs added to the transferred-in goods
received from Molding.

2. Silvering Dentistry has a hygienist that performs cleaning for its patients. During
February, Silvering has the following cost and output information:
Direct Materials $ 800
Hygienist’s Salary 4,450
Overhead 6,750
Number of cleanings 600

Required:
a. Calculate the costs per cleaning for February
b. Calculate the cost of services sold for February
c. What if Silvering found a way to reduce overhead costs by 40%? How would this
affect the profit per cleaning?