Question

4) - Word (Product Activation Failed) 5. Close the under or over-applied factory overhead assuming the balance is immaterial. Problem 2 (36 points) Asia, Inc., manufactures one product in two departments on a continuous basis and uses the average cost method of process cost accounting. Materials, labor, and overhead are added evenly throughout the process in both departments. The following information was reported for the month of August 2015. The Cost of Production Summary for the Cutting Department is provided below: Assembly Department $ 8,700 $ Production Costs Cutting Department Work in process, beginning of month: Cost in Cutting Department Materials $ 8, 600 Labor 4,200 Factory overhead 3,500 S 16,300 Costs incurred during month: Materials $61,400 Labor 26,425 Factory overhead 22,750 110,575 Total $126,875 585 1,600 1,000 3,185 $ 5,595 12,820 8,064 25.479 Production Report In process, beginning of month Finished and transferred during month Work in process, end of month Stage of completion Cutting Department 1,100 8,000 1,500 504 Assembly Department 600 8,000 600 40% $ 16,300 Asia, Inc. Cost of Production Summary--Cutting Department For the Month Ended August 31, 2015 Cost of work in process, beginning of month: Materials $ 8, 600 Labor 4,200 Factory overhead 3,500 Cost of production for month: Materials $61,400 Labor 26,425 Factory overhead 22,750 Total costs to be accounted for Unit output for month: Finished and transferred to Assembly Department during month Equivalent units of work in process, end of month (1,500 units, 50% completed) 110,575 $126,875 8,000 750

Answer 1

Cost of Work in process, beginning of month
Cost of Cutting Department	$            8,700
Materials	$               585
Labor	$            1,600
Overhead	$            1,000	$          11,885
Cost of Production for the month
Cost of Cutting Department	$      1,16,000
Materials	$            5,595
Labor	$          12,820
Overhead	$            8,064	$      1,42,479
Total Costs to be accounted for		$      1,54,364
Units output for month		Material, Labor, Overhead	Cutting
Finished and transferred		8000	8000
Equivalent units of work in process
end of month (600 x 40%)		240	600
Total Equivalent Production		8240	8600
Units cost for month
Cost of Cutting Department (8700+116000)/8600		$            14.50
Materials (585+5595)/8240		$              0.75
Labor (1600+12820)/8240		$              1.75
Overhead (1000+8064)/8240		$              1.10
Total		$            18.10
Inventory Costs
Costs of Goods goods transferred (8000x$18.1)		$      1,44,800
Cost of work in process, end of month
Cost of Cutting Department (600 x $14.5)	$            8,700
Materials (600 x 40% x $0.75)	$               180
Labor (600 x 40% x $1.75)	$               420
Overhead (600 x 40% x $1.1)	$               264	$            9,564
Total		$      1,54,364

Equivalent units for cutting department is 100% complete