Question

Cavalier Company has several processing departments. Costs charged to the assembly department for November 2020 totalled $2,601,819 as follows:

Work in process, November 1

Materials
$69,400

Conversion costs
47,900
$117,300

Materials added
1,892,150

Labour
226,000

Overhead
366,369

Production records show that 35,500 units were in beginning work in process, 30% complete in terms of conversion costs, 691,000 units were started into production, and 25,150 units were in ending work in process, 40% complete in terms of conversion costs. Materials are entered at the beginning of each process.

Determine the equivalent units of production and the unit production costs for the assembly department. (Round unit costs to 2 decimal places, e.g. 15.25.)

Equivalent units
Unit cost

Materials$  per unit

Conversion costs$  per unit

  

  

Determine the assignment of costs to goods transferred out and in process.

Costs accounted for

Transferred out$

Work in process, November 30

Materials$

Conversion costs

   Total costs$

  

  

Prepare a production cost report for the assembly department. (Round unit costs to 2 decimal places, e.g. 15.25.)

CAVALIER COMPANY
Assembly Department
Production Cost Report
For the Month Ended November 30, 2020

Equivalent Units

QuantitiesPhysical UnitsMaterialsConversion CostsTotal

Units to be accounted for

Work in process, November 1

Started into production

Total units

Units accounted for

Transferred out

Work in process, November 30

Total units

Costs

Unit costs

Costs in November$ $ $

Equivalent units

Unit costs$ $ $

Costs to be accounted for

Work in process, November 1$

Started into production

Total costs$

Cost Reconciliation Schedule

Costs accounted for

Transferred out$

Work in process, November 30

Materials$

Conversion costs

Total costs$

  

Answer 1

Answer:

a. Determine the equivalent units of production and the unit production costs for the assembly department.

	Materials	Conversion cost
Equivalent units	726,500	711,410
Cost per unit	2.70	0.90

b. Determine the assignment of costs to goods transferred out and in process.

Costs accounted for
Transferred out		2,524,860
Work in process, November 30
Materials	67,905
Conversion costs	9,054	76,959
Total costs		2,601,819

c. Prepare a production cost report for the assembly department.

CAVALIER COMPANY
Assembly Department
Production Cost Report
For the Month Ended November 30 2020
Quantities	Physical Units	Materials	Conversion Costs
Costs accounted for
Work in process, November 1	35,500
Started into production	691,000
Total units	726,500
Units accounted for
Transferred out	701,350	701,350	701,350
Work in process, November 30	25,150	25,150	10,060
Total units	726,500	726,500	711,410
Costs		Materials	Conversion Costs	Total
Unit costs
Costs in November		1,961,550	640,269	2,601,819
Equivalent units		726,500	711,410
Unit costs		2.7	0.9	3.6
Costs to be accounted for
Work in process, November 1				117,300
Started into production				2,484,519
Total costs				2,601,819
Cost Reconciliation Schedule
Costs accounted for
Transferred out				2,524,860
Work in process, November 30
Materials			67,905
Conversion costs			9,054	76,959
Total costs				2,601,819

Calculation:

Here we need to calculate the equivalent units of production and the unit production costs for the assembly department.

For that we need to find the Total units. It is calculated as below:

	Physical Units	Materials	Conversion Costs
Units to be accounted for
Work in process, November 1	35,500
Started into production	691,000
Total units	726,500
Units accounted for
Transferred out	701,350	701,350	701,350
Work in process, November 30	25,150	25,150	10,060
Total units	726,500	726,500	711,410

Work in process, November 30 :

Conversion Costs = 25,150 x 40% = 10,060

Then we need to find the total Cost as below:

	Materials	Conversion
Beginning work in process	69,400	47,900
Added during month	1,892,150	592,369
Total Cost	1,961,550	640,269

Added during month:

Conversion Costs = 266,000 + 366,369 = 592,369

So the Cost per unit = Total Cost / Equivalent units

	Materials	Conversion
Total Cost (a)	1,961,550	640,269
Equivalent units (b)	726,500	711,410
Cost per unit (a)/(b)	2.70	0.90

Then we need to find the total Costs accounted for. For that first we need to find the Transferred out.

For that we need to multiply the Transferred out units with the total cost per unit

Transferred out = 701,350 x (2.70 + 0.90) = 2,524,860

Then we need to add the Work in process, November 30.

Materials = 25,150 x 2.70 = 67,905

Conversion costs = 10,060 x 0.90 = 9,054

Then adding these we get the total costs.

Then we need to prepare the production cost report for the assembly department with the above calculated data.

Quantities	Physical Units	Materials	Conversion Costs
Costs accounted for
Work in process, November 1	35,500
Started into production	691,000
Total units	726,500
Units accounted for
Transferred out	701,350	701,350	701,350
Work in process, November 30	25,150	25,150	10,060
Total units	726,500	726,500	711,410
Costs	Materials	Conversion Costs	Total
Unit costs
Costs in November	1,961,550	640,269	2,601,819
Equivalent units	726,500	711,410
Unit costs (a) ÷ (b)	2.7	0.9	3.6
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