Question

Miller Outdoor Equipment (MOE) makes four models of tents. The model names are Rookie, Novice, Hiker, and Expert MOE manufactures the tents in two departments: Stitching and Customizing. All four models are processed initially in Stitching where all material is assembled and sewn into a basic tent. The Rookie model is then transferred to finished goods. After processing in Stitching. the other three models are transferred to Customizing for additional add-ons, and then transferred to finished goods. There were no beginning work-in-process inventories on August 1. Data for August are shown in the following table. Ending work in process is 35 percent complete in Stitching and 20 percent complete in Customizing, Conversion costs are allocated based on the number of equivalent units processed in each department. Total Rookie Novice 530 740 Biker 440 420 Expert 150 80 685 475 455 405 $65,320 $27,380 $15,900 $13,640 $8,400 Units started Units completed in stitching Units completed in Customizing Materials Conversion costs: Stitching Customizing Total conversion costs $52,260 24,000 $76,260 Required: a. What is the unit cost of each model transferred to finished goods in August? b. What is the balance of the Work-in-Process Inventory on August 31 for Stitching? For Customizing? Complete this question by entering your answers in the tabs below. Required A Required B What is the balance of the Work-in-Process Inventory on August 31 for Stitching? For Customizing? (Round intermediate calculations to nearest whole number) Work-in-Process Inventory Stitching Next < Prev 15 of 15

Answer 1

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you. Parta Number of Units The material costs per unit are: Product Rookie Novice Hiker Expert Material Cost 27,380 15,900 13,640 8,400 a/b Unit Material Cost 740 530 $ 440 $ 150 $ 37.00 30.00 31.00 56.00 The conversion costs per equivalent unit are: Stitching Department: Physical Units Conversion Costs Equivalent Units 1,860 1,860 Flow of units: Units to be accounted for: Beginning WIP inventory Units started this period Total units to account for Units accounted for: Completed and transferred out Units in ending inventory Conversion costs (200 x 35%) Total units accounted for 1,660 1,660 200 70 1,730 1,860 Total Conversion Costs $ Flow of costs: Costs to be accounted for: Costs in beginning WIP inventory Current period costs Total costs to be accounted for Cost per equivalent unit Conversion costs ($52,260 +1,730) - 52,260 52,260 $ $ $ 52,260 52,260 $ 30.21 Customizing Department: Physical Units Conversion Costs Equivalent Units 975 975 Flow of units: Units to be accounted for: Beginning WIP inventory Units started this period Total units to account for Units accounted for: Completed and transferred out Units in ending inventory Conversion costs (55 x 20%) Total units accounted for 920 920 55 975

Total Conversion Costs Flow of costs: Costs to be accounted for: Costs in beginning WIP inventory Current period costs Total costs to be accounted for Cost per equivalent unit Conversion costs ($24,000 =931) 24,000 24,000 $ $ 24,000 24,000 25.78 Unit Mat Cost Cost of units transferred to finished goods: Product Rookie Novice Hiker Expert Stitching Department Unit Cost 37 $ 30.21 30 $ 30.21 31 $ 30.21 56 $ 30.21 Customizing Department Unit Cost $ $ 25.78 $ 25.78 $ 25.78 Unit Cost $ 67.21 $ 85.99 $ 86.99 $ 111.99 Part b Work-in-Process Ending Inventory Balances are: Stitching Department: Material cost Rookie Novice Hiker Expert Total material cost Number of Units Unit Cost 55 $ 55 $ 20 $ 70 $ Total Cost 37 $ 30 $ 31 $ 2,035 1,650 620 3,920 8,225 56 $ 70*$30.21 Conversion costs Total 2,115 10,340 Customizing Department: Material cost Novice Hiker Expert Total material cost Number of Units 20 15 20 Unit Cost $ $ $ Total Cost 30 $ 31 $ 56 $ 600 465 1,120 2,185 Conversion costs From Stitching From Customizing Total conversion costs Total 55 $ 11 $ 30.21 $ 25.78 $ 1,661 284 1,945 4,130