Question

Your skateboard manufacturing operation is broken up into two separate production areas. The first, where the decks are made, is set up as a process cost environment -- all decks go through the same lamination process in their manufacture and are given the same sealant coating. After that, the decks are cut to three different sizes for the three different models of skateboards that are sold. Then, different wheels, bearings, trucks, and other components are added in the assembly area to create the finished skateboard. It was decided that job-order costing would be used to track this completion part of production. For the manufacturing of the decks, the following information has been collected for you: Production Data (in units): Beginning Work in Process Units started into production Units Completed & Transferred 39,500 120,500 135,000 Cost Data: Beginning WIP -- Materials Beginning WIP -- Labor Beginning WIP -- Overhead 227,129 1,343,107 2,014,628 Cost Added During the Period: Materials Labor Overhead Total Cost Added 722,771 5,699,243 8,550,322 14,972,336 Required: Part 1 Using the above transactions and the additional production information, prepare the production report / process cost summary on page 2. Use the format I used in class that breaks out DM, DL and OH. Assume ending WIP is 50% complete with respect to DM and and 30% complete with respect to DL & OH. (30 points) Part 2 Using the costs you computed for the decks, and information given on page 3, you will need to figure out the costs per unit for the three models of skateboard produced. (20 points)

Answer 1

	No Format is provided in question. Therefore answered is prepared as a working note.
	Assumed Weighted average method is followed.
			Material		Labor		Overheads
			% gets completed
	OP Wip	39500
	Added	120500
	Total Units	160000
	Transferred	135000	100%	135000	100%	135000	100%	135000
	Cl. WIP	25000	50%	12500.00	30%	7500	30%	7500
	Total Eq. Units	160000		147500.00		142500.00		142500.00
	Costs To be accounted for:
	Opening WIP Cost		227129		1343107		2014628
	Current Period Cost		722771		5699243		8550322
	Total Cost		949900		7042350		10564950
	Cost per Eq Unit		949900/147500	6.44	7042350/142500	49.42	10564950/142500	74.14
	Costs accounted for:
	Cost Allocation
	Transferred Units		6.44*135000	869400	49.42*135000	6671700	74.14*135000	10008900
	Closing WIP Units		6.44*12500	80500	49.42*7500	370650	74.14*7500	556050
	Total Cost Allocated			949900		7042350		10564950

Overheads rate Calculation
Total Overheads Cost =	145960+91830+76210+168490+483570+94550+29180+1974710+985290+61430
	4111220
Total Direct Labor Hours	37760+23520+30550
	91830
Overheads Rate	4111220/91830
	44.7699009	Per Hour
	Men's 32	Kids 24	Ladies 27	Total
Direct Materials	128890	163700	190980	483570
Direct Labor cost	804150	489810	680750	1974710
Overheads Cost	1690511.458	1052988.069	1367720.473	4111220
(Hours*$44.7699)
Total Cost	2623551.458	1706498.069	2239450.473	6569500
Units Completed	26249	21067	15456
Per Unit Cost	99.95	81.00	144.89