In: Accounting
Warsaw Inc. assembles its product in several departments. Warsaw has two departments, Cutting and Finishing, that processes all units. Product is processed in Cutting, transferred to Finishing, and once complete, is transferred to finished goods.
Information for the month of October is as follows:
Beginning Work in Process Inventory for Cutting is $15,000 ($12,000 for materials and $3,000 for conversion costs)
Beginning Work in Process Inventory for Finishing contains $16,000 for transferred-in costs, $40,000 for the first material, and $20,000 for conversion costs).
CUTTING DEPARTMENT: The cutting department beginning work in process contains 30,000 units that are 30% complete as to conversion. 50,000 units were started. The work in process ending inventory contains 10,000 units that are 60% complete. Conversion occurs uniformly whereas direct materials are added at the beginning of the process.
Within the Cutting Department, the following transactions occurred in October:
1. $50,000 raw materials were put into process in cutting.
2. Direct labor incurred was $16,000; Manufacturing Overhead incurred was $8,000.
3. Conversion is applied to production.
4. Completed product was transferred to the Finishing Department.
FINISHING DEPARTMENT: The finishing department beginning work in process contains 40,000 units that are 75% complete as to conversion. Ending inventory containing 30,000 units is 45% complete. Conversion occurs uniformly. Two materials are added in this department; the first direct material is added at the 40% point in the process; the second direct material is added at the 80% point in the process.
Within the Finishing Department, the following transactions occurred:
5. The first direct material, $67,500, is used; the second direct material, $90,000 is used.
6. Direct labor incurred was $30,000; Manufacturing Overhead incurred was $24,375.
7. Conversion is applied to production.
8. Completed product was transferred to finished goods.
REQUIRED:
1. Prepare a production cost worksheet using FIFO for the cutting department. (Round equivalent unit costs to at least FOUR decimal points, if necessary)
2. Prepare a production cost worksheet using Weighted Average for the finishing department. (Round equivalent unit costs to at least FOUR decimal points, if necessary)
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Warsaw | |
Workings for Cutting department | |
Goods finished in Oct | Whole Units |
Inventory in Process Oct 1 | 30,000.00 |
Add: Started in production | 50,000.00 |
Less: Inventory in Process Oct 31 | 10,000.00 |
Goods finished in Oct | 70,000.00 |
Started and completed in Oct | |
Goods finished in Oct | 70,000.00 |
Less: Opening work in process | 30,000.00 |
Started and completed in Oct | 40,000.00 |
Cost of Production Report | |||
Cutting Department | Equivalent Units | ||
Units charged to production | Whole Units | Materials | Conversion |
Inventory in Process Oct 1 | 30,000.00 | ||
Started in production | 50,000.00 | ||
Total units accounted for by the Dept. | 80,000.00 | ||
Units to be assigned costs: | |||
Inventory in Process Oct 1 | 30,000.00 | - | 21,000.00 |
Started and completed in Oct | 40,000.00 | 40,000.00 | 40,000.00 |
Goods finished | 70,000.00 | 40,000.00 | 61,000.00 |
Inventory in Process Oct 30 | 10,000.00 | 10,000.00 | 6,000.00 |
Total units to be assigned costs: | 80,000.00 | 50,000.00 | 67,000.00 |
Costs per equivalent unit | Materials | Conversion | Total |
Total costs for the Oct | 50,000.00 | 24,000.00 | 74,000.00 |
Total equivalent units | 50,000.00 | 67,000.00 | |
Costs per equivalent unit | 1.0000 | 0.3582 | |
Costs charged to production | |||
Inventory in Process Oct 1 | 15,000.00 | ||
Costs incurred in Oct | 74,000.00 | ||
Total costs accounted for by the Dept. | 89,000.00 | ||
Costs allocated to completed and partially completed units | |||
Inventory in Process Oct 1 | 15,000.00 | ||
To complete Inventory in Process Oct 1 | - | 7,522.00 | 7,522.00 |
Started and completed in Oct | 40,000.00 | 14,328.00 | 54,328.00 |
Transferred to Finished goods in Oct | 76,850.00 | ||
Inventory in Process Oct 30 | 10,000.00 | 2,150.00 | 12,150.00 |
Total costs assigned by the Dept. | 89,000.00 |
Cost of Production Report | |||||
Finishing Department | |||||
Flow of production of units: | Equivalent Units | ||||
Units charged to production: | Whole Units | Transferred in | Materials 1 | Materials 2 | Conversion |
Opening Inventory in process | 40,000.00 | ||||
Units started in Oct | 70,000.00 | ||||
Total units to be accounted for | 110,000.00 | ||||
Units accounted for | |||||
Transferred out | 80,000.00 | 80,000.00 | 80,000.00 | 80,000.00 | 80,000.00 |
Units ending in WIP Inventory | 30,000.00 | 30,000.00 | 30,000.00 | - | 13,500.00 |
Total Units accounted for | 110,000.00 | 110,000.00 | 110,000.00 | 80,000.00 | 93,500.00 |
Equivalent Units | |||||
Costs to be accounted for | Total costs | Transferred in | Materials 1 | Materials 2 | Conversion |
Costs in beginning WIP Inventory | 76,000.00 | 16,000.00 | 40,000.00 | - | 20,000.00 |
Current period costs | 288,725.00 | 76,850.00 | 67,500.00 | 90,000.00 | 54,375.00 |
Total costs to be accounted for | 364,725.00 | 92,850.00 | 107,500.00 | 90,000.00 | 74,375.00 |
Costs per equivalent unit | |||||
Transferred in costs | 0.8441 | ||||
Material 1 | 0.9773 | ||||
Material 2 | 1.1250 | ||||
Conversion | 0.7955 | ||||
Costs accounted for | |||||
Costs assigned to units transferred out | |||||
Transferred in costs | 67,528.00 | 67,528.00 | |||
Material 1 |
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