Question

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Cavalier Company has several processing departments. Costs charged to the assembly department for November 2020 totalled...

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$

  

Solutions

Expert Solution

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
ekkarill92 answered 2 years ago
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