Question

Problem 1 Tuxedo Company has several processing departments. Costs charged to the Assembly Department for October 2019 totaled $1,298,400 as follows. Work in process, October 1 Materials Conversion costs $29,000 16,500 $ 45,500 Materials added Labor Overhead 1,006,000 138,900 108,000 Production records show that 25,000 units were in beginning work in process 40% complete as to conversion cost, 435,000 units were started into production, and 35,000 units were in ending work in process 40% complete as to conversion costs. Materials are entered at the beginning of each process. Instructions: a) Determine the equivalent units of production and the unit production costs for the Assembly Department. b) Determine the assignment of costs to goods transferred out and in process. c) Prepare a production cost report for the Assembly Department.

Answer 1

Answer a

	Material	Conversion costs
Equivalent units	460,000	439,000
	Material	Conversion costs
Cost per equivalent unit	$      2.25	$                    0.60

Answer b

Cost allocation to units completed and ending work in progress
Cost of units transferred to finished goods	$   1,211,250
Value of ending work in work in progress	$        87,150

Answer c

Tuxedo company
Cost of Production Report
	Whole units	Equivalent units-Material	Equivalent units-Conversion cost
Units to account for during production
Beginning work in progress	25,000
Started in process	435,000
Total units to be accounted for	460,000
Units to be assigned costs
Completed and transferred	425,000	425,000	425000
Ending work in progress	35,000	35,000	14,000
Total units to be assigned costs	460,000	460,000	439,000
Costs
Cost per equivalent unit
Total production costs		$                         1,035,000	$                                          263,400
Total equivalent units		460,000	439,000
Cost per equivalent unit		$                                   2.25	$                                                0.60
Costs assigned to production
Beginning work in progress		$                              45,500
Direct material, Direct labor and Factory Overheads incurred		$                         1,252,900
Total costs accounted for		$                         1,298,400
Cost allocation to units completed and ending work in progress
Cost of units transferred to finished goods		$                         1,211,250
Value of ending work in work in progress		$                              87,150
Total costs		$                         1,298,400

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