Swedish Navy Company manufactures wristwatches on an assembly line. The work in

Question

Swedish Navy Company manufactures wristwatches on an assembly line. The work in process inventory as of March 1 consisted of 1,000 watches that were complete as to materials and 75% complete as to labor and overhead. The March 1 work in process costs were as follows: Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,000 Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000 Overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $18,000 During the month, 10,000 units were started and 9,500 units were completed. The 1,500 units of ending inventory were complete as to materials and 25% were complete as to labor and overhead. The costs for March were as follows: Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 61,000 Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000 Overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,000 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $129,000 Calculate: a. Equivalent units for material, labor, and overhead, using the average cost method b. Unit costs for materials, labor, and overhead c. Cost of the units completed and transferred d. Detailed cost of the ending inventory e. Total of all costs accounted for

Explanation / Answer

a)Equivalent units for material = 11000

labor = 9500+1500*0.25 = 9875

overhead = 9500+1500*0.25 = 9875

b) unit cost material = 66000/11000 = 6/unit

labor = 25000/9875 = 2.53/unit

overhead = 56000/9875 = 5.67/unit

c) completed and transferred cost = 9500(6+2.53+5.67) = 134900

d) detailed cost of ending inventory material = 1500*6 = 12000

labor = 375*2.53 = 948.75

overhead = 375*5.67 = 2126.25

e) total of all costs = 134900+12000+988.75+2126.25 = 147000

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.