Question

Wizard’s Skateboard shop sells premium skateboards for use in skate parks. The shop uses a process-costing system to compute the unit costs of the skateboards that it produces and sells for $450. Customers place orders online for skateboards where they can customize the decks and griptape with a choice of patterns and colours. The parts are purchased and assembled, customized with the customer’s choice of grip tape for the deck, trucks and wheels, and packaged to be sent by courier directly to the customer. Wizard’s Skateboard shop has three distinct departments: Assembly, Customization, and Packaging/Shipping.

The production process works as follows: all major parts have been assembled and the skateboard is tested before it is transferred from Assembly to Customization, the Customization department adds some materials to meet customer’s preference, and finally, the Packaging/Shipping department places the skateboard in a cardboard box and makes arrangements for shipping to the customer. Overhead in each department is applied based on direct labour costs at a rate of 130% for assembly and 115% for customization.

During March, the following results are available for the first two departments:

	Assembly	Customization
Beginning inventories:
Physical units	22 skateboards	15 skateboards
Costs:
Materials	$4,600	$4,900
Labour	$3,400	$4,250
Overhead	?	?
Transferred in	–	$1,000
Current production:
Transferred out	220 skateboards	240 skateboards
Ending inventory	14 skateboards	12 skateboards
Costs incurred in March:
Materials	$17,040	$1,300
Transferred in	–	?
Labour	$14,650	$1,180
Overhead	?	?
Percentage of completion:
Beginning inventory	65%	75%
Ending inventory	Material 50%	Material 100%
	Conversion 50%	Conversion 25%

Required:

Following the five steps outlined in the chapter, prepare a production report for the Assembly and Customization departments using the weighted average method.

Answer 1

Please give positive ratings so I can keep answering. It would help me a lot. Please comment if you have any query. Thanks!

Wizard’s Skateboard
Production report- Assembly
Step 1. Physical flow analysis
Units reconciliation	Whole Units
Beginning work in process inventory	22.00
Add: Units started in the month	212.00
Units to be account for	234.00
Units completed and transferred out	220.00
Add: Ending work in process inventory	14.00
Total Units accounted for	234.00

Step 2- Equivalent units of production	Whole Units	% Materials	EUP- Materials	% Conversion	EUP- Conversion
Units completed and transferred out	220.00	100%	220.00	100%	220.00
Ending work in process inventory	14.00	50%	7.00	50%	7.00
Equivalent units of production	234.00		227.00		227.00

Step 3- Costs per EUP	Materials	Conversion	Total Cost
Cost of beginning Inventory	4,600.00	7,820.00	12,420.00	Conversion cost is $ 3,400*230%
Costs incurred during the month	17,040.00	33,695.00	50,735.00	Conversion cost is $ 14,650*230%
Total cost to account for	21,640.00	41,515.00	63,155.00
Equivalent units of production	227.00	227.00
Cost per Equivalent unit	95.33	182.89	278.22
(Total cost to account for/Equivalent units of production)

Step 4- Valuation of inventories
Costs of units transferred out	EUP	Cost per EUP	Total Cost
Direct Materials	220.00	95.33	20,973.00
Conversion	220.00	182.89	40,236.00
Total transferred out			61,209.00
Costs of ending work in process	EUP	Cost per EUP	Total Cost
Direct Materials	7.00	95.33	667.00
Conversion	7.00	182.89	1,281.00
Total costs of ending work in process			1,948.00
Total costs accounted for			63,157.00

Step 5- Cost reconciliation	Amount $
Total cost to account for	63,155.00
Total costs accounted for	63,157.00
Rounding off difference	(2.00)

Production report- Customization
Step 1. Physical flow analysis
Units reconciliation	Whole Units
Beginning work in process inventory	15.00
Add: Units started in the month	237.00
Units to be account for	252.00
Units completed and transferred out	240.00
Add: Ending work in process inventory	12.00
Total Units accounted for	252.00

Step 2- Equivalent units of production	Whole Units	% Transferred In	EUP- Transferred In	% Materials	EUP- Materials	% Conversion	EUP- Conversion
Units completed and transferred out	240.00	100%	240.00	100%	240.00	100%	240.00
Ending work in process inventory	12.00	100%	12.00	100%	12.00	25%	3.00
Equivalent units of production	252.00		252.00		252.00		243.00

Step 3- Costs per EUP	Transferred In	Materials	Conversion	Total Cost
Cost of beginning Inventory	1,000.00	4,900.00	9,138.00	15,038.00
Costs incurred during the month	61,209.00	1,300.00	2,537.00	65,046.00
Total cost to account for	62,209.00	6,200.00	11,675.00	80,084.00
Equivalent units of production	252.00	252.00	243.00
Cost per Equivalent unit	246.86	24.60	48.05	319.51

ekkarill92 Next > < Previous Related Solutions Wizard’s Skateboard shop sells premium skateboards for use in skate parks. The shop uses a process-costing... Wizard’s Skateboard shop sells premium skateboards for use in skate parks. The shop uses a process-costing system to compute the unit costs of the skateboards that it produces and sells for $450. Customers place orders online for skateboards where they can customize the decks and griptape with a choice of patterns and colours. The parts are purchased and assembled, customized with the customer’s choice of grip tape for the deck, trucks and wheels, and packaged to be sent by courier... Wizard’s Skateboard shop sells premium skateboards for use in skate parks. The shop uses a process-costing... Wizard’s Skateboard shop sells premium skateboards for use in skate parks. The shop uses a process-costing system to compute the unit costs of the skateboards that it produces and sells for $450. Customers place orders online for skateboards where they can customize the decks and griptape with a choice of patterns and colours. The parts are purchased and assembled, customized with the customer’s choice of grip tape for the deck, trucks and wheels, and packaged to be sent by courier... Luther Processing Company uses a weighted-average process costing system and manufactures a single product—a premium rug... Luther Processing Company uses a weighted-average process costing system and manufactures a single product—a premium rug shampoo and cleaner. The company has just completed the manufacturing activity for the month of October. A partially completed production cost report for the month of October for the mixing department is shown below. Calculate equivalent units and complete production cost report. ********** Equivalent Units Quantities Physical Units Materials Conversion Costs Units to be accounted for  Work in process, October 1 (all materials, 70%... describe one company that would use job costing and one company that uses process costing. You... describe one company that would use job costing and one company that uses process costing. You should include the name of the company the product/product type the company manufactures (or service it provides) and why you think they would use job or process costing. – Process costing (14 marks) Thompson’s Tea makes tea kettles. It uses a process costing system... – Process costing Thompson’s Tea makes tea kettles. It uses a process costing system to cost its products. The company makes kettles in three departments: Assembly, Coating, and Packaging. In the Assembly department the direct materials along with conversion costs are added evenly throughout the process. The cost accountant is completing the production report for April. At the beginning of the month 3,500 kettles had 60% of the work completed in March. 19,000 kettles were started in April and 2,500... Campo Company Process Costing Exercise Campo Company uses a process costing system. On March 1, it... Campo Company Process Costing Exercise Campo Company uses a process costing system. On March 1, it had no work-in-process inventory. During the month it started 1,020,000 liters of product and shipped 960,000 liters to its upstream distribution partner. The cost of the resources used by Campo in March amounted to $408,330 direct materials and $1,521,370 conversion costs. The production supervisor estimates that the ending work in process is 40% complete on March 31. Determine (a) cost of product shipped and... What are job-order costing and process costing? What types of firms use job-order costing? Process costing?... What are job-order costing and process costing? What types of firms use job-order costing? Process costing? Explain how overhead is assigned to production when a predetermined overhead rate is used. Assume that a company has decided not to allocate any support department costs to producing departments. Describe the likely behavior of the managers of the producing departments. Would this be good or bad? Explain why allocation would correct this type of behavior. Atlantic manufacturing company uses process costing. All materials are added at the beginning of the process.... Atlantic manufacturing company uses process costing. All materials are added at the beginning of the process. The company uses weighted average method in measuring unit costs. There are 100,000 units in the beginning work-in-process in the month of May (The company started its production in late April and did not finish producing any unit). The conversion work is 70% complete. The costs of beginning WIP are $1,250,000, including $100,000 of input of materials ($1 per EU), and $140,000 for labor... Atlantic Manufacturing Company uses process costing. All materials are added at the beginning of the process.... Atlantic Manufacturing Company uses process costing. All materials are added at the beginning of the process. The normal spoilage rate is calculated as 10% of good units completed.   The cost of the beginning work-in-process in the month of May is $3,000,000, including $1,600,000 of input of materials, 100,000 units, and $1,400,000 for conversion costs. The beginning work-in-process is 70% complete.   During May, the input includes $7,400,000 for materials, 800,000 units started and $4,190,000 for conversion costs. There were 700,000 good... Atlantic Manufacturing Company uses process costing. All materials are added at the beginning of the process.... Atlantic Manufacturing Company uses process costing. All materials are added at the beginning of the process. The normal spoilage rate is calculated as 10% of good units completed. The cost of the beginning work-in-process in the month of May is $3,000,000, including $1,600,000 of input of materials, 100,000 units, and $1,400,000 for conversion costs. The beginning work-in-process is 70% complete. During May, the input includes $7,400,000 for materials, 800,000 units started and $4,190,000 for conversion costs. There were 700,000 good... ADVERTISEMENT Subjects Accounting Advanced Math Anatomy and Physiology Biology Chemistry Civil Engineering Computer Science Economics Electrical Engineering Finance History Math Mechanical Engineering Operations Management Physics Psychology Statistics and Probability Nursing Other ADVERTISEMENT Latest Questions java programing project Implement a program that computes the Fibonacci of a specified number, the factorial... Team Case #3: Rural Utility Your consulting team has been brought in by the Board chairperson... I have a question pertaining to ruby on rails. I was wondering if there is a... For the past two years, the United States has imposed tariffs (tax) on imports from China.... Module 2 Course Work 1. Read Pages 12-30. 2. Use the week 1 video's and this... 6. Solve the following recurrence relations t(n) = t(n-1) + 3 for n>1 t(1) = 0... In C programming using C11 library, how can we validate command line arguments? meaning for example... ADVERTISEMENT About @ 2020 WizEdu