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		200		80	%
Units started into production		1,000
Work in process units, March 31		300		40	%

Cost Data—Bicycles
Work in process units, March 1		$ 19,280
Direct materials		50,000
Direct labor		25,900
Manufacturing overhead		30,000

Production Data—Tricycles		Units		Percentage Complete
Work in process units, March 1		100		75	%
Units started into production		1,000
Work in process units, March 31		60		25	%

Cost Data—Tricycles
Work in process units, March 1		$ 6,125
Direct materials		30,000
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. (Round answers to 0 decimal places, e.g. 2,520.)

		Materials		Conversion Costs
Equivalent Units of bicycles
Equivalent Units of tricycles

Calculate the unit costs of production for materials and conversion costs for both the bicycles and the tricycles. (Round unit costs to 3 decimal places, e.g. 25.215.)

		Materials		Conversion Costs
Unit costs of bicycles
Unit costs of tricycles

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. (Round answers to 0 decimal places, e.g. 2,520.)

Bicycles

Costs accounted for:
Transferred out		$
Work in process, March 1
Materials	$
Conversion costs
Total costs		$

Tricycles

Costs accounted for:
Transferred out		$
Work in process, March 1
Materials	$
Conversion costs
Total costs		$

Prepare a production cost report for the month of March for the bicycles only. (Round unit costs to 3 decimal places, e.g. 25.123 and all other answers to 0 decimal places, e.g. 2,520.)

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

Solution:

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		1000		860
Equivalent Units of tricycles		1000		980

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		50		65
Unit costs of tricycles		30		35

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		$102,380
Work in process, March 1
Materials	$15,000
Conversion costs	78,000	22,800
Total costs		$125,180

Tricycles

Costs accounted for:
Transferred out		$68,100
Work in process, March 1
Materials	$1,800
Conversion costs	525	2,325
Total costs		$70,425

OWEN COMPANY
Production cost report - By cycle
For the month ended March 31
		Equivalent units
Quantities	Physical units	Material	Conversion costs
Units to be accounted for;
Work in process, March 1	200
Started into production	1,000
Total units	1,200
Units accounted for:
Completed and transferred out
Work in process, March 1	200	-	40
Started and completed	700	700	700
Work in process, March 31	300	300	120
Total units	1,200	1,000	860
Costs	Material costs	Conversion costs	Total
Costa in March	50,000	55,900	105,900
Equivalent units	1,000	860
Unit cost ( $ )	50	65	115
Costs to be accounted for;
Work in process, March 1	19,280
Started into production	105,900
Total cost	125,180
Cost reconciliation schedule;
Costs accounted for;	$	$
Transferred out-
Work in process, March 1	19,280
Conversion cost to complete beginning inventory	2,600
Started and completed	80,500	102,380
Work in process, March 31;
Materials	15,000
Conversion costs	7,800	22,800
Total costs		125,180