Question
In: Accounting
Plasto Corporation manufactures a variety of plastic products, including a series of molded chairs. The three...
Plasto Corporation manufactures a variety of plastic products, including a series of molded chairs. The three models of molded chairs, which are all variations of the same design, are Standard (can be stacked), Deluxe (with arms), and Executive (with arms and padding). The company uses batch manufacturing and has an operation-costing system. The production process includes an extrusion operation and subsequent operations to form, trim, and finish the chairs. Plastic sheets are produced by the extrusion operation, some of which are sold directly to other manufacturers. During the forming operation, the remaining plastic sheets are molded into chair seats and the legs are added; the Standard model is sold after this operation. During the trim operation, the arms are added to the Deluxe and Executive models and the chair edges are smoothed. Only the Executive model enters the finish operation where the padding is added. All of the units produced receive the same steps within each operation. The May production run had a total manufacturing cost of $977,250. The units of production and direct-material costs incurred were as follows:
|
Units Produced |
Extrusion Materials |
Form Materials |
Trim Materials |
Finish Materials |
||||||||||
|
Plastic sheets |
4,600 |
$ |
46,000 |
|||||||||||
|
Standard model |
6,200 |
62,000 |
$ |
24,800 |
||||||||||
|
Deluxe model |
3,100 |
31,000 |
12,400 |
$ |
9,300 |
|||||||||
|
Executive model |
2,000 |
20,000 |
8,000 |
6,000 |
$ |
12,000 |
||||||||
|
Total |
15,900 |
$ |
159,000 |
$ |
45,200 |
$ |
15,300 |
$ |
12,000 |
|||||
Manufacturing costs applied during the month of May were as follows:
|
Extrusion Operation |
Form Operation |
Trim Operation |
Finish Operation |
|||||||||||||
|
Direct labor |
$ |
248,040 |
$ |
58,000 |
$ |
32,130 |
$ |
16,000 |
||||||||
|
Manufacturing overhead |
254,400 |
66,300 |
44,880 |
26,000 |
||||||||||||
Required:
1. For each product produced by Plasto Corporation during the month of May, determine the (a) unit cost and (b) total cost. Be sure to account for all costs incurred during the month. (Round "Unit costs" to 2 decimal places.)
Solutions
Expert Solution
| Plastic sheets | Standard model | Deluxe model | Executive model | |
| Units Produced | $ 4,600.00 | $ 6,200.00 | $ 3,100.00 | $ 2,000.00 |
| Direct Materials: | ||||
| Extrusion Materials | $ 46,000.00 | $ 62,000.00 | $ 31,000.00 | $ 20,000.00 |
| Form Materials | $ 24,800.00 | $ 12,400.00 | $ 8,000.00 | |
| Trim Materials | $ 9,300.00 | $ 6,000.00 | ||
| Finish Materials | $ 12,000.00 | |||
| Direct labor | ||||
| Extrusion Materials | $ 71,760.00 | $ 96,720.00 | $ 48,360.00 | $ 31,200.00 |
| Form Materials | $ 10,265.00 | $ 15,912.00 | $ 31,823.00 | |
| Trim Materials | $ 19,530.00 | $ 12,600.00 | ||
| Finish Materials | $ 16,000.00 | |||
| Manufacturing Overhead | ||||
| Extrusion Materials | $ 73,600.00 | $ 99,200.00 | $ 49,600.00 | $ 32,000.00 |
| Form Materials | $ 36,377.00 | $ 18,189.00 | $ 11,734.00 | |
| Trim Materials | $ 27,280.00 | $ 17,600.00 | ||
| Finish Materials | $ 26,000.00 | |||
| Total Cost | $ 191,360.00 | $ 329,362.00 | $ 231,571.00 | $ 224,957.00 |
| Cost Per unit | 41.60 | 53.12 | 74.70 | 112.48 |
Working Note-
| Allocation of Labor Cost on the basis of units | |||||
| No of Units Produced | Extrusion Department(all products | Form Operation(last three product | Trim Operation(Last two product | Finish Operation | |
| Plastic sheets | 4,600.00 | $ 71,760.00 | |||
| Standard model | 6,200.00 | $ 96,720.00 | $ 31,823.00 | ||
| Deluxe model | 3,100.00 | $ 48,360.00 | $ 15,912.00 | $ 19,530.00 | |
| Executive model | 2,000.00 | $ 31,200.00 | $ 10,265.00 | $ 12,600.00 | $ 16,000.00 |
| Total | 15,900.00 | $ 248,040.00 | $ 58,000.00 | $ 32,130.00 | $ 16,000.00 |
| Cost | $ 248,040.00 | $ 58,000.00 | $ 32,130.00 | $ 16,000.00 | |
| Total Units | 15900 | 11300 | 5100 | 2000 | |
| Per unit cost | $ 15.60 | $ 5.13 | $ 6.30 | $ 8.00 | |
| Allocation of Overhead on the basis of units | |||||
| No of Units Produced | Extrusion Department(all products | Form Operation(last three product | Trim Operation(Last two product | Finish Operation | |
| Plastic sheets | 4,600.00 | $ 73,600.00 | |||
| Standard model | 6,200.00 | $ 99,200.00 | $ 36,377.00 | ||
| Deluxe model | 3,100.00 | $ 49,600.00 | $ 18,189.00 | $ 27,280.00 | |
| Executive model | 2,000.00 | $ 32,000.00 | $ 11,734.00 | $ 17,600.00 | $ 26,000.00 |
| Total | 15,900.00 | $ 254,400.00 | $ 66,300.00 | $ 44,880.00 | $ 26,000.00 |
| Cost | $ 254,400.00 | $ 66,300.00 | $ 44,880.00 | $ 26,000.00 | |
| Total Units | 15900 | 11300 | 5100 | 2000 | |
| Per unit cost | $ 16.00 | $ 5.867257 | $ 8.80 | $ 13.00 | |
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