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Weighted Average Method, Physical Flow, Equivalent Units, Unit Costs, Cost Assignment, ABC Swasey Fabrication, Inc., manufactures...

Weighted Average Method, Physical Flow, Equivalent Units, Unit Costs, Cost Assignment, ABC Swasey Fabrication, Inc., manufactures frames for bicycles. Each frame passes through three processes: Cutting, Welding, and Painting. In September, the Cutting Department of the Tulsa, Oklahoma, plant reported the following data: In Cutting, all direct materials are added at the beginning of the process. Beginning work in process consisted of 41,000 units, 20 percent complete with respect to direct labor and overhead. Costs in beginning inventory included direct materials, $1,205,000; direct labor, $222,800; and applied overhead, $150,000. Costs added to production during the month were direct materials, $2,698,400; direct labor, $3,454,700. Overhead was assigned using the following information: Activity Rate Actual Driver Usage Inspection $150 per inspection hour 4,000 inspection hours Maintenance $750 per maintenance hour 1,600 maintenance hours Receiving $300 per receiving order 2,000 receiving orders At the end of the month, 121,200 units were transferred out to Welding, leaving 13,400 units in ending work in process, or 25 percent complete.

1. Prepare a physical flow schedule. 2. Calculate equivalent units of production for direct materials and conversion costs 3. Compute unit cost under weighted average. 4. Calculate the cost of goods transferred to Welding at the end of the month. Calculate the cost of ending inventory 5. Prepare the journal entry that transfers the goods from Cutting to Welding.

Solutions

Expert Solution

Total OH assigned:
Activity Rate Activity OH cost
Inspection 150 4000 600000
Maintenance 750 1600 1200000
Receiving 300 2000 600000
Total OH assigned: 2,400,000
UNITS TO ACCOUNT FOR:
Beginning Work in Process units 41,000
Add: Units Started in Process 93,600
Total Units to account for: 134,600
UNITS TO BE ACCOUNTED FOR:
Units completed and transferred out 121,200
Ending Work in Process 13,400
Total Units to be accounted for: 134,600
Equivalent Units:
UNITS Material Cost Conversion
% Completion Units % Completion Units
Units complted 121200 100% 121,200 100% 121,200
Ending Work in Process 13400 100% 13,400 25% 3,350
Total Equivalent units 134600 134,600 124,550
TOTAL COST TO ACCOUNT FOR:
Material Conversion
Beginning work in Process 1,205,000 372,800
Cost Added during May 2,698,400 5,854,700
Total Cost to account for: 3,903,400 6,227,500
Equivalent Units 134,600 124,550
Cost per Equivalent unit 29 50
TOTAL COST ACCOUNTED FOR:
Units completed and Transferred out (121200 units)
Equivalent unit Cost per EU Total Cost
Material 121,200 29 3514800
Conversion Cost 121,200 50 6060000
Total Cost of Units completed and transferred out: 9574800
Ending Work in process (13400 units)
Equivalent unit Cost per EU Total Cost
Material 13,400 29 388600
Conversison Cost 3,350 50 167500
Total cost of Ending Work in process: 556,100
Total cost accounted for 10,130,900
Journal entry:
Work in process- welding account 10,130,900
      Work in process- Cutting account 10,130,900

ekkarill92 answered 1 year ago
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