Question

Wilson Dynamics makes flanges in a continuous process through two departments: Forging and Assembly. All direct materials are added at the beginning of the process in the Forging Department, whereas all direct materials are added at the end of the process in the Assembly Department. Conversion costs are incurred uniformly over time in both departments. As units are completed in the Forging Department, they are transferred to the Assembly Department. The costs associated with the transferred units are included in the computation of the Assembly Department’s total costs. The information presented as follows was compiled at the end of July.

	Forging Department			Assembly Department
Beginning Inventories (on July 1):
Physical units in production carried forward from June 30		5,000			4,000
Costs:
Transferred Forging costs carried forward from June 30				$	68,000
Direct materials costs carried forward from June 30	$	45,000			?
Conversion costs carried forward from June 30		16,000			3,000
Current Production (in July):
Units started during July		75,000			?
Units in ending inventories as of July 31		8,000			16,000
Costs:
Forging costs transferred to Assembly during July					?
Direct materials costs incurred in July	$	675,000		$	720,000
Conversion costs incurred in July		608,000			191,400
Percentage of Completion:
Inventories with respect to conversion on July 1		40	%		25	%
Inventories with respect to conversion on July 31		75			30

Required:

a. Complete the following requirements for the Forging Department.

1. Prepare a schedule showing units started and completed in the Forging Department during July.

2. Compute the equivalent units of direct materials and conversion for the Forging Department in July.

3. Determine the cost per equivalent unit of input resource for the Forging Department ­during July.

4. Prepare the summary journal entry required to transfer units from the Forging Department to the Assembly Department during July.

5. Compute the costs assigned to ending inventory in the Forging Department on July 31.

b. Complete the following requirements for the Assembly Department.

1. Prepare a schedule showing units started and completed in the Assembly Department during July.

2. Compute the equivalent units of direct materials and conversion for the Assembly Department in July. Direct materials include both those transferred in from the Forging Department and those added by the Assembly Department.

3. Determine the cost per equivalent unit of input resource for the Assembly Department during July.

4. Prepare the summary journal entry required to transfer units from the Assembly Department to Finished Goods Inventory during July.

5. Compute the costs assigned to ending inventory in the Assembly Department on July 31.

Answer 1

ans a
Cost of Prduction report (weighted avg method)
ForgingDepartment			Equivalent Units
Flow Of Units	Physical Units	Transferred In	Direct material	Conversion Cost
Units to be accounted for
answer a1
Beginning work in process inventory	5000
Units started this period	75000
Total u nits to be accounted for	80000
Units accounnted for:
Units transferred out (b)	72000		72000	72000
Ending work in progress inventory c (100% material and 75% conversion)	8000		8000	6000
Total units to be accounted for (f)	80000	answer a2	80000	78000
Flow of Cost
Cost in the begnning work in progress inventory	61000		45000	16000
cost added to process	1283000		$675,000	$608,000
Total Cost to be accounted for (e)	1344000		720000	624000
Cost per equivalent unit (a)		answer a3	9.00	8.00
Cost accounted for
Cost assigned to units transferred out (a*b)	1224000	ans a4	648000	576000
Cost in ending work in progress inventory (a*c)	120000	answer a5	72000	48000
Total Cost accounted for	1344000		720000	624000
Answer 2
Cost of Prduction report (weighted avg method)
ForgingDepartment			Equivalent Units
Flow Of Units	Physical Units	Transferred In	Direct material	Conversion Cost
Units to be accounted for
answer b1
Beginning work in process inventory	4000
Units transferred in from forging department	72000
Total u nits to be accounted for	76000
Units accounnted for:
Units transferred out (b)	60000	60000	60000	60000
Ending work in progress inventory c (100% transferred in, 0% material and 30% conversion)	16000	16000	0	4800
Total units to be accounted for (f)	76000	76000	60000	64800	answer b2
Flow of Cost
Cost in the begnning work in progress inventory	71000	68000	0	3000
cost added to process	2135400	1224000	$720,000	$191,400
Total Cost to be accounted for (e)	2206400	1292000	720000	194400
Cost per equivalent unit (a)		17.00	12.00	3.00	answer b3
Cost accounted for
Cost assigned to units transferred out (a*b)	1920000	1020000	720000	180000	answer b4
Cost in ending work in progress inventory (a*c)	286400	272000	0	14400	answer b5
Total Cost accounted for	2206400	1292000	720000	194400

If any doubt please comment.