Question

A company that makes baseball gloves produces them using 2 production departments. When the gloves are produced they first go through the Fabrication Department, which produces the pieces that are later assembled into a glove. After the Fabrication Department completes its work on the glove, the glove goes to the Assembly Department to finish putting the glove together.

The following data is for the Assembly Department (the second department that works on the gloves) for the month of November:

Units in the beginning work-in-process inventory 9,000

Units started during the month 51,000

Units completed during the month and transferred to Finished Goods 52,000

Units in the ending work-in-process inventory 8,000

Units in the ending work-in-process inventory are 75% completed in terms of direct materials and 45% completed in terms of conversion costs

Costs in the beginning work-in-process inventory - $45,000 of costs transferred in from the Fabrication Department, $55,000 of direct materials costs, and $70,000 of conversion costs

Costs added in the month of November - $255,000 of costs transferred in from the Fabrication Department, $293,000 of direct materials costs, and $319,200 of conversion costs

Please complete the 5 steps of involved in process costing:

1. Account for all the units

2. Calculate the number of equivalent units in terms of transferred-in costs, direct materials and conversion costs

3. Calculate the amounts spent on transferred-in costs, direct materials and conversion costs

4. Calculate the cost per equivalent unit for transferred-in costs, direct materials and conversion costs

5. Allocate the total amount spent between the cost of goods completed (transferred to Finished Goods) and the cost assigned to the ending work-in-process inventory.

Answer 1

Req 1
UNITS TO ACCOUNT FOR:
Beginning Work in Process units				9,000.00
Add: Units Started in Process				51,000.00
Total Units to account for:				60,000.00
UNITS TO BE ACCOUNTED FOR:
Units started and completed				52,000.00
Ending Work in Process				8,000.00
Total Units to be accounted for:				60,000.00
Req 2:
Equivalent Units:
			Transferred in Cost		Material Cost		Conversion Cost
			% Completion	Units	% Completion	Units	% Completion	Units
Units started annd completed			100%	52,000.00	100%	52,000.00	100%	52,000.00
Ending Work in Process			100%	8,000.00	75%	6,000.00	45%	3,600.00
Total Equivalent units				60,000.00		58,000.00		55,600.00
Req 3:
TOTAL COST TO ACCOUNT FOR:
			Transferred-in		Material		Conversion
Beginning work in Process			45,000		55000		70,000
Cost Added during May			255,000		293,000		319,200
Total Cost to account for:			300,000		348,000		389,200
Total Cost to account for:							1,037,200
Req 4:
COST PER EQUIVALENT UNIT:
			Transferred-in		Material		Conversion
Cost added during the period			300,000		348,000		389,200
Equivalent Units			60,000.00		58,000.00		55,600.00
Cost per Equivalent unit			5.00		6.00		7.00
Req 5:
TOTAL COST ACCOUNTED FOR:
Units Completed and Transferred out (52000 units)
			Equivalent unit	Cost per EU	Total Cost
Transferred-in cost			52,000	5	260000
Material cost			52,000	6	312000
Conversion Cost			52,000	7	364000
Total Cost of Units completed and transferred out:					936000
Ending Work in Process (8000 units)
			Equivalent unit		Total Cost
Transferred-in cost			8,000.00	5	40000
Material cost			6,000.00	6	36000
Conversion Cost			3,600.00	7	25200
Total cost of Ending Work in process:					101,200
Total Cost accounted for:					1,037,200