Stefan Ceramics: A Creative Ceramic Vases Journey
How does Stefan Ceramics operate its molding and finishing departments?
Stefan Ceramics is in the business of selling ceramic vases. It has two departments, molding and finishing. Molding department purchases tungsten carbide and produces ceramic vases out of it. Ceramic Vases are then transferred to finishing department, which designs it as per the requirement of the customers.
What were the activities of Stefan Ceramics during the month of July?
During the month of July, molding department purchased 720 kgs of tungsten carbide at $280 per kg. It started manufacture of 4,200 vases and completed and transferred 3,800 vases during the month. It has 400 vases in the process at the end of the month.
What were the costs incurred by Stefan Ceramics in July?
It incurred direct labor charges of $1,500 and other manufacturing costs of $1,300, which included electricity costs of $300.
How did Stefan Ceramics manage its inventory in July?
Stefan had no inventory of tungsten carbide at the end of the month. It also had no beginning inventory of vases. The ending inventory was 50% complete in respect of conversion costs.
Answer:
The following entries would be made:
Stefan Ceramics
Sr. No | Particulars | Debit | Credit
1 | Merchandise Inventory | 291600 | Accounts Payable/Cash | 291600
2 | Work In Process | 291600 Dr | Merchandise Inventory | 291600 Cr
For purchase of 720 kgs of tungsten carbide at $280 per kg (720*280=291600).
Accounts Payable or cash depending on whether material was purchased for cash or through accounts payable (creditors).
For use of 720 kgs of tungsten carbide. As there is no ending inventory the whole of the material is charged to production.
Exploring Stefan Ceramics Journey
Stefan Ceramics is a fascinating business specializing in the selling of ceramic vases. The company operates two essential departments, molding, and finishing, each playing a crucial role in the creation and design of these beautiful vases. The molding department is responsible for purchasing tungsten carbide and transforming it into intricate ceramic vases, while the finishing department adds the final touches to meet customer specifications.
Throughout the month of July, Stefan Ceramics engaged in various activities to produce and sell their ceramic vases. The molding department purchased 720 kgs of tungsten carbide at $280 per kg to initiate the manufacturing process. They successfully began the production of 4,200 vases, completing and transferring 3,800 vases by the end of the month, with 400 vases still in progress.
Cost management is crucial for any business, and Stefan Ceramics ensured efficiency by incurring direct labor charges of $1,500 and additional manufacturing costs of $1,300, which included $300 for electricity. With meticulous inventory control, the company had no remaining tungsten carbide stock at the month's end and no initial inventory of vases, with the closing inventory being 50% complete in conversion costs.
In summary, the creative journey of Stefan Ceramics showcases dedication to craftsmanship, meticulous cost management, and strategic inventory control, ensuring the production of high-quality ceramic vases for their customers to enjoy.