Question

Problem 3-2A (Video) (Part Level Submission) Rosenthal Company manufactures bowling balls through two processes: Molding and Packaging. In the Molding Department, the urethane, rubber, plastics, and other materials are molded into bowling balls. In the Packaging Department, the balls are placed in cartons and sent to the finished goods warehouse. All materials manufacturing overhead are incurred uniformly throughout each process. Production and cost data for the Molding Department during June 2020 are presented below. Production Data June 0 Beginning work in process units Units started into production Ending work in process units Percent complete-ending inventory 29,700 2,700 40 % Cost Data Materials Labor $267,300 72,360 152,280 $491,940 Overhead Total

Answer 1

ROSENTHAL COMPANY Molding Department Production Cost Report For the Month Ended June 30, 2020 Unit Information Equivalent Units Whole Units Materials Conversion Units to be accounted for: Work in process, June 1 Started into production 29,700 29,700 Units accounted for: Transferred out Work in process, June 30 27,000 2,700 29,700 27,000 2,700 29,700 27,000 1,080 28,080 Cost Information Total $491,940 Total costs Total Equivalent units Unit Costs Materials $267,300 29,700 $9.00 Conversion $224,640 28,080 $8.00

$0 $491,940 $491,940 Cost to be accounted for: Work in process, June 1 Started into production Total costs Cost Reconciliation Schedule: Transferred out Inventory in proces, ending balance Materials Conversion $459,000 $24,300 $8,640 $32,940 $491,940 Total costs assigned by the department Workings: Under FIFO method, equivalent units would consist efforts required to complete the beginning inventory, efforts put for completed and transferred out goods and ending inventory. As the materials are introduced at the beginning itself, beginning inventory is 100% complete in terms of materials, 0% efforts would be required in current process or period whereas conversion costs would require the uncompleted portion of costs in current process or period. However, there are no beginning inventory and so there will be no efforts to complete the beginning work in process.

Units in beginning inventory Add: Units added during the period Less: Units in ending inventory Units completed and transferred out 29,700 -2,700 27,000 -> Of which 0 units shall be from beg. inventory; Bal. 27000 units from current. Particulars Physical Units Materials 0% 100% Beginning work in process Started, Completed and transferred Transferred to next process Ending work in process Equivalent Units of Production (EUP) EUP Materials 0 27,000 27,000 2,700 29,700 [0 units x 0%; 0 units x 0%] [27000 units x 100%; 27000 units x 100%] 27,000 27,000 2,700 29,700 % / EUP Conversion Conversion 0% 0 100% 27,000 27,000 40% 1,080 28,080 100% [2700 units x 100%; 2700 units x 40%] NOTE: As Materials are added at the beginning itself, its % of completion in ending WIP is 100% for materials in the EUP calculation. Cost per equivalent units of production Direct Materials Conversion I[Under FIFO method, it shall not be considered here but here there is no cost anyway] [Conversion = Labor + Overhead = $72360 + 152280 = $224640] Cost of beginning work in process Cost added during the period Total Materials Costs & Conversion Costs Equivalent units of Production (EUP) Cost per Equivalent units of Production $267,300 $267,300 29,700 $9.00 $224,640 $224,640 28,080 $8.00 [As computed EUP schedule presented above] [Materials = $267300 / 29700 units = $9; Conversion = $224640 / 28080 = $8]

Cost of goods completed & transferred EUP Cost per EUP Totals Materials - Beginning cost Conversion - Beginning Cost Cost of goods completed & trfd from beginning $0 $0 [There is no beginning WIP] [There is no beginning WIP] 27,000 27,000 $9.00 $8.00 Materials - Current Cost Labor - Current Cost Cost of goods completed & trfd from current Total Cost of goods completed & transferred $243,000 [27000 units x $9] $216,000 [27000 units x $8] $459,000 $459,000 [$0+ $459000] Cost of ending work-in-process EUP Totals Cost per EUP $9.00 $8.00 Materials Labor Total cost of ending work-in-process 2,700 1,080 $24,300 $8,640 $32,940 [2700 units x $9] [1080 units x $8]