Question

Alvis Construction Supply Company has a department that manufactures wood trusses (wood frames used in the construction industry. The following information is for the production of these trusses for the month of February points 4.900 trusses $11.380 $16, 158 18,9ea trusses 17,9ee trusses ebook Work-in-process inventory, February 1 Direct materials: 100 complete Conversione complete Units started during February Units completed during February and transferred out work-in-process inventory. February 29 Direct materials: les complete Conversion: 30 complete Costs incurred during February Direct materials Conversion References $59.948 392,992 Required Using the FIFO method, calculate the following: 1-a. Costs per equivalent unit. (Round your answers to 4 decimal places.) 1-b. Cost of goods completed and transferred out. (Do no round your intermediate calculations. Round your final answer to the nearest whole dollar.) 1-c. Costs remaining in the Work-in-Process Inventory account. (Do no round your intermediate calculations. Round your final answer to the nearest whole dollar.) 2. Assume that you are the company's controller. The production department's February equivalent unit cost is higher than expected. If the manager of the first department asks you to do him a favor by increasing the ending inventory completion percentage from 30 to

Answer 1

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Alvis Company
Cost of Production Report
For the Month Ended Feb 28		Equivalent Units
Unit information	Physical Units	Materials	Conversion
Units charged to production:
Inventory in process Feb 1	4,900.00
Units started during Feb	18,900.00
Total units accounted for	23,800.00
Units to be assigned costs:
Inventory in process Feb 1	4,900.00	-	3,430.00	Materials are introduced in the beginning so 100% is already completed for materials. So in this month 0% is completed. So Equivalent units are calculated as 4,100 * 0%. Similarly 30% is already completed for conversion. So in this month 70% is completed. So Equivalent units are calculated as 4,100 * 70%.
Started and completed in Feb	13,000.00	13,000.00	13,000.00	See note B
Goods transferred out in Feb	17,900.00	13,000.00	16,430.00
Inventory in process, Feb 28	5,900.00	5,900.00	1,770.00	This is closing units multiplied by % of completion
Total units to be assigned costs:	23,800.00	18,900.00	18,200.00
Cost Information				Total
Costs per equivalent unit
Total costs for Feb		59,940.00	92,992.00
Total costs incurred		59,940.00	92,992.00	152,932.00
Total equivalent units		18,900.00	18,200.00
Cost per equivalent unit		3.1714	5.1095	8.2809
Costs allocated to completed and partially completed units
Inventory in process, Feb 1 balance		10,580.00	15,350.00	25,930.00
To complete inventory in process, Feb 1		-	17,525.59	17,525.59
Cost of completed Feb 1 work in process		10,580.00	32,875.59	43,455.59
Started and completed in Feb		41,228.20	66,423.50	107,651.70
Transferred to next Department in Feb				151,107.00
Inventory in process, Feb 28		18,711.26	9,043.82	27,755.00

Note B
Started and completed in Feb
Goods transferred out in Feb	17,900.00
Less: Opening work in process	4,900.00
Started and completed in Feb	13,000.00

Answer 2
Units to be assigned costs:
Inventory in process Feb 1	4,900.00	-	3,430.00
Started and completed in Feb	13,000.00	13,000.00	13,000.00	See note B
Goods transferred out in Feb	17,900.00	13,000.00	16,430.00
Inventory in process, Feb 28	5,900.00	5,900.00	2,950.00	This is closing units multiplied by % of completion
Total units to be assigned costs:	23,800.00	18,900.00	19,380.00
Cost Information				Total
Costs per equivalent unit
Total costs for Feb		59,940.00	92,992.00
Total costs incurred		59,940.00	92,992.00	152,932.00
Total equivalent units		18,900.00	19,380.00
Cost per equivalent unit		3.1714	4.7983	7.9697
Total cost per equivalent if 30%	8.2809
Total cost per equivalent if 50%	7.9697
So weighted average cost per equivalent will decrease by	$         0.3112