Question

Owen Company manufactures bicycles and tricycles. For both products, materials are added at the beginning of the production process, and conversion costs are incurred uniformly. Owen Company uses the FIFO method to compute equivalent units. Production and cost data for the month of March are as follows.

Production Data—Bicycles		Units		Percentage Complete
Work in process units, March 1		200		80	%
Units started into production		1,310
Work in process units, March 31		290		40	%

Cost Data—Bicycles
Work in process units, March 1		$19,030
Direct materials		49,780
Direct labor		26,200
Manufacturing overhead		30,248

Production Data—Tricycles		Units		Percentage Complete
Work in process units, March 1		140		75	%
Units started into production		1,000
Work in process units, March 31		60		25	%

Cost Data—Tricycles
Work in process units, March 1		$6,190
Direct materials		30,000
Direct labor		14,100
Manufacturing overhead		19,560

Calculate the equivalent units of production for materials and conversion costs for both the bicycles and the tricycles.

		Materials		Conversion Costs
Equivalent Units of bicycles
Equivalent Units of tricycles

eTextbook and Media

  

  

Calculate the unit costs of production for materials and conversion costs for both the bicycles and the tricycles.

		Materials		Conversion Costs
Unit costs of bicycles
Unit costs of tricycles

eTextbook and Media

  

  

Calculate the assignment of costs to units transferred out and in process at the end of the accounting period for both the bicycles and the tricycles.

Bicycles

Costs accounted for:
Transferred out		$
Work in process, March 31
Materials	$
Conversion costs
Total costs		$

Tricycles

Costs accounted for:
Transferred out		$
Work in process, March 31
Materials	$
Conversion costs
Total costs		$

eTextbook and Media

  

  

Prepare a production cost report for the month of March for the bicycles only.

OWEN COMPANY Production Cost Report—Bicycles For the Month Ended March 31
				Equivalent Units
Quantities		Physical Units		Materials		Conversion Costs
Units to be accounted for
Work in process, March 1
Started into production
Total units
Units accounted for
Completed and transferred out
Work in process, March 1
Started and completed
Work in process, March 31
Total units
Costs		Materials		Conversion Costs		Total
Unit costs
Costs in March		$		$		$
Equivalent units
Unit costs		$		$		$
Costs to be accounted for
Work in process, March 1				$
Started into production
Total costs				$
Cost Reconciliation Schedule
Costs accounted for
Transferred out
Work in process, March 1		$
Conversion costs to complete beginning inventory
Started and completed				$
Work in process, March 31
Materials
Conversion costs
Total costs				$

Answer 1

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Final Answer
Equivalent units of production	Bicycles	Tricycles
Materials	1,310.00	1,000.00
Conversion	1,176.00	990.00
Unit costs of production	Bicycles	Tricycles
Materials	38.00	30.00
Conversion	48.00	34.00
Assignment of costs	Bicycles	Tricycles
Beginning WIP	19,030.00	6,190.00
Complete Beginning WIP	1,920.00	1,190.00
Started and completed in Mar	87,720.00	60,160.00
Ending WIP	16,588.00	2,310.00

See workings below.

Workings for answer 4
Goods transferred out in Mar
Inventory in process Mar 1	200.00
Add: Units started into production	1,310.00
Less: Inventory in process, Mar 31	290.00
Goods transferred out in Mar	1,220.00
Started and completed in Mar
Goods transferred out in Mar	1,220.00
Less: Inventory in process Mar 1	200.00
Started and completed in Mar	1,020.00

Cost of Production Report- Bicycles
For the Month Ended Mar 31
Unit information	Physical Units
Units charged to production:
Inventory in process Mar 1	200.00
Units started into production	1,310.00
Total units accounted for by the Department	1,510.00

		Equivalent Units
Units to be assigned costs:		Materials	Conversion
Inventory in process Mar 1	200.00	-	40.00	See note A
Started and completed in Mar	1,020.00	1,020.00	1,020.00
Inventory in process, Mar 31	290.00	290.00	116.00	This is closing units multiplied by % of completion
Total units to be assigned costs:	1,510.00	1,310.00	1,176.00
Cost Information		Materials	Conversion	Total
Costs per equivalent unit
Total costs for March		49,780.00	56,448.00	106,228.00
Total equivalent units		1,310.00	1,176.00
Cost per equivalent unit		38.000	48.000	86.000
Costs assigned to production:
Inventory in process Mar 1				19,030.00
Complete Beginning WIP		-	1,920.00	1,920.00
Started and completed in Mar		38,760.00	48,960.00	87,720.00
Inventory in process, Mar 31		11,020.00	5,568.00	16,588.00
Total costs assigned by the Department				125,258.00

Goods transferred out in Mar	Tricycles
Inventory in process Mar 1	140.00
Add: Units started into production	1,000.00
Less: Inventory in process, Mar 31	60.00
Goods transferred out in Mar	1,080.00
Started and completed in Mar
Goods transferred out in Mar	1,080.00
Less: Inventory in process Mar 1	140.00
Started and completed in Mar	940.00

Cost of Production Report- Tricycles
For the Month Ended Mar 31
Unit information	Physical Units
Units charged to production:
Inventory in process Mar 1	140.00
Units started into production	1,000.00
Total units accounted for by the Department	1,140.00

		Equivalent Units
Units to be assigned costs:		Materials	Conversion
Inventory in process Mar 1	140.00	-	35.00	See note A
Started and completed in Mar	940.00	940.00	940.00
Inventory in process, Mar 31	60.00	60.00	15.00	This is closing units multiplied by % of completion
Total units to be assigned costs:	1,140.00	1,000.00	990.00
Cost Information		Materials	Conversion	Total
Costs per equivalent unit
Total costs for March		30,000.00	33,660.00	63,660.00
Total equivalent units		1,000.00	990.00
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