Question

Your Skateboard manufacturing operation is broken up into two seperate production areas. The first where the decks are made, is set up as a process cost enviorment- all decks go through the same lamination process in their manufacture and are given the same sealant coating. After that, the decks are cut into 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 collection for you:

Production Data: (in units)

Beginning Work in process: 39,500

Units Started into production: 120,500

Units Completed & transferred: 135,000

Cost Data

Beginning WIP-- Materials: 227,129

Beginning WIP-- Labor 1,343,107

Beginning WIP-- Overhead 2,014,628

Cost Added During the period:

Materials : 722,771

Labor: 5,699,243

Overhead: 8,550,322

Total Cost Added: 14,972,336

Required:

Part 1

Using the above transactions and the additonal 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 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. (20points)

Answer 1

The answer is as follows: