Question

               

Problem 16-3A (Part Level Submission)

Thakin Industries Inc. manufactures dorm furniture in separate processes. In each process, materials are entered at the beginning, and conversion costs are incurred uniformly. Production and cost data for the first process in making two products in two different manufacturing plants are as follows.

Cutting Department

Production Data—July

Plant 1

                                                                                T12-Tables

Plant 2

C10-Chairs

Work in process units, July 1                        0                                           0

Units started into production                      24,000                                   19,200

Work in process units, July 31                     3,600                                  600

Work in process percent complete           60                                           80

                                                               

Cost Data—July

Work in process, July 1                                   $0                           $0

Materials                                                            456,000                                 345,600

Labor                                                                     281,280                                 132,000

Overhead                                                            124,800                                 125,760

   Total                                                                   $862,080                              $603,360

Correct answer. Your answer is correct.

               

For each plant compute the physical units of production.

T12 Tables

Units to be accounted for                            

Entry field with correct answer

24000

C10 Chairs

Entry field with correct answer

19200

Correct answer. Your answer is correct.

               

For each plant determine the unit costs of production. (Round unit costs to 2 decimal places, e.g. 5.25.)

Materials

Conversion Costs

Total Costs

Unit costs-T12 Tables                    

19                18                      37

Unit costs-C10 Chairs                     

18             13.5                    31.5

For each plant show the assignment of costs to units transferred out and in process.

T12 Tables

Costs accounted for:

   Transferred out        754800

$Entry field with correct answer

   Work in process

      Materials 456000 ???

      Conversion costs ????

         Total costs   1,616,880

C10 Chairs

Costs accounted for:

   Transferred out      ??

   Work in process    

      Materials        ???

      Conversion costs    ???      

Total costs

Questions marks represent where I keep getting a wrong answer despite best efforts.

Answer 1

Solution:

Plant 1:

Unit Reconciliation - Plant 1 (Tables)
Total units to account for:
Units in beginning WIP	0
Units started	24000
Total units to account for	24000
Units Accounted for:
Units Completed and transferred out	20400
Units in Ending WIP	3600
Units Accounted for	24000

Computation of Equivalent unit of Production - Plant 1 (Tables)
Flow of Production	Flow of physical units	Material	Conversion
Units Accounted for:
Unit completed & Transferred out	20400	20400	20400
Ending WIP:	3600
Material (100%)		3600
Conversion (60%)			2160
Equivalent units of production	24000	24000	22560

Computation of Cost per equivalent unit of Production - Plant 1 (Tables)
Particulars	Material	Conversion
Opening WIP	$0.00	$0.00
Cost Added during period	$456,000.00	$406,080.00
Total cost to be accounted for	$456,000.00	$406,080.00
Equivalent units of production	24000	22560
Cost per Equivalent unit	$19.00	$18.00

Computation of Cost of ending WIP and units completed & transferred out - Plant 1 (Tables)
Particulars	Material	Conversion	Total
Equivalent unit of Ending WIP	3600	2160
Cost per equivalent unit	$19.00	$18.00
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit)	$68,400	$38,880	$107,280
Units completed and transferred	20400	20400
Cost of units completed & Transferred (Unit completed * cost per equivalent unit)	$387,600	$367,200	$754,800

Plant 2:

Unit Reconciliation - Plant 2 (Chairs)
Total units to account for:
Units in beginning WIP	0
Units started	19200
Total units to account for	19200
Units Accounted for:
Units Completed and transferred out	18600
Units in Ending WIP	600
Units Accounted for	19200

Computation of Equivalent unit of Production - Plant 2 (Chairs)
Flow of Production	Flow of physical units	Material	Conversion
Units Accounted for:
Unit completed & Transferred out	18600	18600	18600
Ending WIP:	600
Material (100%)		600
Conversion (80%)			480
Equivalent units of production	19200	19200	19080

Computation of Cost per equivalent unit of Production - Plant 2 (Chairs)
Particulars	Material	Conversion
Opening WIP	$0.00	$0.00
Cost Added during period	$345,600.00	$257,760.00
Total cost to be accounted for	$345,600.00	$257,760.00
Equivalent units of production	19200	19080
Cost per Equivalent unit	$18.00	$13.51

Computation of Cost of ending WIP and units completed & transferred out - Plant 2 (Chairs)
Particulars	Material	Conversion	Total
Equivalent unit of Ending WIP	600	480
Cost per equivalent unit	$18.00	$13.51
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit)	$10,800	$6,485	$17,285
Units completed and transferred	18600	18600
Cost of units completed & Transferred (Unit completed * cost per equivalent unit)	$334,800	$251,286	$586,086