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In: Accounting

Don’t Cry Over Spilled​ Milk, Inc., a manufacturer of​ mops, uses the weighted average method in...

Don’t Cry Over Spilled​ Milk, Inc., a manufacturer of​ mops, uses the weighted average method in its processing costing system.​ Don’t Cry uses a traditional costing system in the allocation of its manufacturing overhead​ (MOH) to​ production; MOH costs are allocated to production on the basis of machine hours logged during the period. Total estimated MOH for the period was $300,000 and total estimated machine hours were​ 100,000. The following data concern the operations of the​company’s first processing​ department, Assembly, for June 2012.

Beginning Work in Process:

800​ mops, ​60% complete with respect to direct​ materials, 10% complete with respect to conversion

Costs in Beginning Work in Process:

​$3,712 (of this​ amount, $1,296 is for direct ​materials)

Units Started in June:

​16,000 mops

Direct Product Costs Added During June:

direct materials​ $47,076; direct labor ​$216,213

Ending Work in Process:

300​ mops, 60% completed with respect to direct​ materials, 70% complete with respect to conversion

During​ June, 74,230 actual machine hours were logged during production.

​(round all calculation to 2 decimal places. round final answers to the nearest dollar.​)

1) The cost to assemble one mop in June was $_____

2)The cost of goods completed and transferred out of the Assembly department during June equals ​$________

3)The conversion costs included in Work in​ Process-Assembly at the beginning of July would equal ​$______

Solutions

Expert Solution

Working:

Beginning work in process 800
Units started this period 16000
Total units to account for 16800
Completed and transferred out 16500
Ending work in process 300
Total units accounted for 16800
Units % Materials EUP-Materials % Conversion EUP-Conversion
Units completed and transferred out 16500 100% 16500 100% 16500
Units of ending work in process 300 60% 180 70% 210
Equivalent units of production 16680 16710
Cost per EUP Materials Conversion
Cost of beginning work in process 1296 2416
Costs incurred this period* 47076 438903
Total costs Costs 48372 Costs 441319
÷ Equivalent units of production EUP 16680 EUP 16710
Cost per equivalent unit of production 2.90 26.41

*Conversion costs incurred this period:

Predetermined overhead rate = $300000/100000 = $3 per machine hour

Overheads applied in June = 74230 x $3 = $222690

Conversion costs incurred = Direct labor + MOH = $216213 + $222690 = $438903

Cost Assignment:

Costs transferred out EUP Cost per EUP Total cost
Direct materials 16500 2.90 47850
Conversion 16500 26.41 435765
Total transferred out 483615
Costs of ending work in process EUP Cost per EUP Total cost
Direct materials 180 2.90 522
Conversion 210 26.41 5546
Total ending work in process 6068

1) The cost to assemble one mop in June = $2.90 + $26.41 = $29.31

2) Cost of goods completed and transferred out of Assembly department during June: $483,615

3) Conversion costs included in Work in Process-Assembly at beginning of July: $5546

ekkarill92 answered 1 year ago
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