The New York Division of MVP Sports Equipment Company manufactures baseball gloves. Two production departments are...

The New York Division of MVP Sports Equipment Company manufactures baseball
gloves. Two production departments are used in sequence: the Cutting Department
and the Stitching Department. In the Cutting Department, direct material, consisting
of imitation leather is placed into production at the beginning of the process. Direct
labor and manufacturing overhead costs are incurred uniformly throughout the
process. The material is rolled to make it softer, and is then cut into the pieces
needed to produce baseball gloves. The predetermined overhead rate is 150% of
direct labor costs. MPV uses weighted average costing.

We have the following data about production in the Cutting Department:

Goods-in-Process, January 1, 2020			10,000 units
	Direct Material-100% Complete			$40,000.00
	Conversion (Labor & Overhead)- 50% Complete			120,000
	Total cost of Goods in Process, January 1, 2020			$160,000.00

Units added in January 2020:			70,000 units

Costs added in January 2020:
	Direct Material			$320,000
		Direct Labor		723,840
	Factory Overhead			1,028,160
	Total costs added in January 2020			$2,072,000

Units in Goods-in-Process, January 31, 2020:			22,000 units
	Direct Material-100% Complete
	Conversion Costs-20% Complete

a.	Analyze the flow of units:
b.	Compute equivalent units.
c.	Compute the per unit costs: (Direct Material, Conversion, and Total)


d.	The value of Goods-in-Process in the Cutting Department on 1/31/2020 is:
e.	The value of Goods-in-Process transferred to the Stiching Department is:

Solutions

Expert Solution

analysis and calculation of equivalent unit

Note = Conversion cost includes labour and overhead

From the above table

b)Equivalent no of units = .

material = 80000 units

Labour and overhead = 62400

c) Cost per equivalent unit =

Material = 4.5

Labour and overhead = 30

d)The value of Goods-in-Process in the Cutting Department on 1/31/2020 is:231000

e)The value of Goods-in-Process in the Cutting Department on 1/31/2020 is: 2001000

ekkarill92 answered 1 year ago

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