Question

Owen Company manufactures bicycles and tricycles. For both products, materials are added at the beginning of the production process, and conversion costs are incurred uniformly. Owen Company uses the FIFO method to compute equivalent units. Production and cost data for the month of March are as follows.

Production Data—Bicycles		Units		Percentage Complete
Work in process units, March 1		190		80	%
Units started into production		1,380
Work in process units, March 31		300		40	%

Cost Data—Bicycles
Work in process units, March 1		$19,070
Direct materials		49,680
Direct labor		25,900
Manufacturing overhead		29,810

Production Data—Tricycles		Units		Percentage Complete
Work in process units, March 1		140		75	%
Units started into production		990
Work in process units, March 31		60		25	%

Cost Data—Tricycles
Work in process units, March 1		$6,460
Direct materials		30,690
Direct labor		14,300
Manufacturing overhead		20,000

Calculate the equivalent units of production for materials and conversion costs for both the bicycles and the tricycles.

		Materials		Conversion Costs
Equivalent Units of bicycles
Equivalent Units of tricycles

eTextbook and Media

  

  

Calculate the unit costs of production for materials and conversion costs for both the bicycles and the tricycles.

		Materials		Conversion Costs
Unit costs of bicycles
Unit costs of tricycles

eTextbook and Media

  

  

Calculate the assignment of costs to units transferred out and in process at the end of the accounting period for both the bicycles and the tricycles.

Bicycles

Costs accounted for:
Transferred out		$
Work in process, March 31
Materials	$
Conversion costs
Total costs		$

Tricycles

Costs accounted for:
Transferred out		$
Work in process, March 31
Materials	$
Conversion costs
Total costs		$

eTextbook and Media

  

  

Prepare a production cost report for the month of March for the bicycles only.

OWEN COMPANY Production Cost Report—Bicycles For the Month Ended March 31
				Equivalent Units
Quantities		Physical Units		Materials		Conversion Costs
Units to be accounted for
Work in process, March 1
Started into production
Total units
Units accounted for
Completed and transferred out
Work in process, March 1
Started and completed
Work in process, March 31
Total units
Costs		Materials		Conversion Costs		Total
Unit costs
Costs in March		$		$		$
Equivalent units
Unit costs		$		$		$
Costs to be accounted for
Work in process, March 1				$
Started into production
Total costs				$
Cost Reconciliation Schedule
Costs accounted for
Transferred out
Work in process, March 1		$
Conversion costs to complete beginning inventory
Started and completed				$
Work in process, March 31
Materials
Conversion costs
Total costs				$

Answer 1

PART 1
	Material	Conversion
Equivalent Units Of Bicycles	1380	1238
Equivalent Units of Tricycles	990	980
PART 2
	Material	Conversion
Unit CostOf Bicycles	$36	$45
Unit cost of Tricycles	$31	$35
PART 3
Costs Accounted For - Bicycles							Costs Accounted For - Tricycles
Transferred out	$1,08,260						Transferred out	$69,065
Work-In-Process March 31							Work-In-Process March 31
Materials	$10,800						Materials	$1,860
Conversion Cost	$5,400						Conversion Cost	$525
Total Costs	$1,24,460						Total Costs	$71,450
PART 4
Bicycles							Tricycles
Quantities	Physical Units	% Completed	Materials	% Completed	Conversion Costs		Quantities	Physical Units	% Completed	Materials	% Completed	Conversion Costs
Units to be Accounted For:							Units to be Accounted For:
Work-In-Process March 1	190						Work-In-Process March 1	140
Started into Production	1380						Started into Production	990
Total Units to Account For	1570						Total Units to Account For	1130
Units Accounted For							Units Accounted For
Completed & Transferred Out							Completed & Transferred Out
Work-In-Process March 1	190	0%	0	20%	38		Work-In-Process March 1	140	0%	0	25%	35
Started & Completed	1080	100%	1080	100%	1080		Started & Completed	930	100%	930	100%	930
Work-In-Process March 31	300	100%	300	40%	120		Work-In-Process March 31	60	100%	60	25%	15
Total Units Accounted For	1570		1380		1238		Total Units Accounted For	1130		990		980
Unit Cost Analysis Schedule - FIFO							Unit Cost Analysis Schedule - FIFO
	Materials	Conversion Costs	Total Costs					Materials	Conversion Costs	Total Costs
Unit Costs							Unit Costs
Costs in March	$49,680	$55,710	$1,05,390				Costs in March	$30,690	$34,300	$64,990
Equivalent Units	1380	1238					Equivalent Units	990	980
Cost per Equivalant Unit	$36	$45	$81				Cost per Equivalant Unit	$31	$35	$66
Costs to be Accounted For							Costs to be Accounted For
Work-In-Process March 1	$19,070						Work-In-Process March 1	$6,460
Started into Production	$1,05,390						Started into Production	$64,990
Total Costs	$1,24,460						Total Costs	$71,450
NOTE: IN FIFO Method only current period cost is divided by equivalent units to arrive at cost per equivalent unit.							NOTE: IN FIFO Method only current period cost is divided by equivalent units to arrive at cost per equivalent unit.
Cost Reconcillation Schedule							Cost Reconcillation Schedule
Costs Accounted For							Costs Accounted For
Transferred out							Transferred out
Work-In-Process March 1	$19,070						Work-In-Process March 1	$6,460
Conversion Costs to complete Beginning Inventory (38*45)	$1,710						Conversion Costs to complete Beginning Inventory (35 * $35)	$1,225
Started & Completed (1080 * $81)	$87,480	$1,08,260					Started & Completed (930 * $66)	$61,380	$69,065
Work In Process Inventory March 31							Work In Process Inventory March 31
Materials (300 * $36)	$10,800						Materials (60 * $31)	$1,860
Conversion Costs (120 * $45)	$5,400	$16,200					Conversion Costs (15 * $35)	$525	$2,385
Total Cost Accounted For		$1,24,460					Total Cost Accounted For		$71,450