Question

. The Tochigi Company manufacturers a standard bookshelf. During February, the firm's Assembly Department has the beginning inventory of 60,000 bookshelves. During the month, the firm completed 120,000 bookshelves, and transferred them to the Finishing Department. The firm ended the month with 30,000 bookshelves in the ending inventory. All direct materials costs are added at the beginning of the production cycle.  Conversion costs are added uniformly throughout the production process. The beginning work in process was 60% completed with respect to conversion costs, while the ending work in process was 40% completed with respect to conversion costs. [28]. Use up to “four digits” in calculations. ]]]

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         Beginning inventory:

                  Direct materials               $50,400

                  Conversion costs            $160,020

         Manufacturing costs added during the accounting period:

                  Direct materials             $309,600

                  Conversion costs            $371,280

Assuming the “Weighted Average (WA) Method” of process costing is used by Tochigi.

2-1. Compute Equivalent units for materials and for conversions? [6]

2-2.   What are cost per equivalent unit for materials and conversion costs? [6]  

2-3. What are the dollar amounts transferred out from the Assembly Department? [8]

2-4. What is the dollar amount of ending work-in-process inventory in the Assembly Department? [4]

2-5. Now suppose the firm uses the “ FIFO Method”. Calculate the total equivalent units for materials and conversion costs. Clearly show your calculations in this process. [6]   

2-6 Based on the above computation 2-5, calculate cost per equivalent unit for materials and conversion costs. Clearly show your calculations in this process. [6]  

2-7. What are the dollar amounts transferred out from the Assembly Department? [9]

2-8. What is the dollar amount of ending work-in-process inventory in the Assembly Department? [4]

2-9 . What are conceptual differences between the WA and FIFO methods? What are the benefits of the FIFO method over the WA method? [4]

Answer 1