Flowchart of accounts related to service and processing departments

 

Alcoa Inc. is the world’s largest producer of aluminum products. One product that Alcoa manufactures is aluminum sheet products for the aerospace industry. The entire output of the Smelting Department is transferred to the Rolling Department. Part of the fully processed goods from the Rolling Department are sold as rolled sheet, and the remainder of the goods are transferred to the Converting Department for further processing into sheared   sheet.

Prepare a chart of the flow of costs from the processing department accounts into the finished goods accounts and then into the cost of goods sold account. The relevant accounts are as  follows:

Cost of Goods Sold                                                                             Finished Goods—Rolled Sheet

Materials                                                                                                       Finished Goods—Sheared Sheet

Factory Overhead—Smelting Department                       Work in Process—Smelting Department Factory Overhead—Rolling Department     Work in Process—Rolling Department Factory Overhead—Converting Department                    Work in Process—Converting Department