Morse Company manufactures basketballs. Materials are added at the beginning of

Question

Morse Company manufactures basketballs. Materials are added at the beginning of the production process and conversion costs are incurred uniformly. Production and cost data for the month of July 2014 are as follows.


Production DataBasketballs
Units Percent
Complete Work in process units, July 1 500 60 % Units started into production 1,250 Work in process units, July 31 600 40 % Cost DataBasketballs Work in process, July 1     Materials $750     Conversion costs 600 $1,350 Direct materials 2,400 Direct labor 1,580 Manufacturing overhead 1,295

Morse Company manufactures basketballs. Materials are added at the beginning of the production process and conversion costs are incurred uniformly. Production and cost data for the month of July 2014 are as follows.


Production DataBasketballs
Units Percent
Complete Work in process units, July 1 500 60 % Units started into production 1,250 Work in process units, July 31 600 40 % Cost DataBasketballs Work in process, July 1     Materials $750     Conversion costs 600 $1,350 Direct materials 2,400 Direct labor 1,580 Manufacturing overhead 1,295

Production DataBasketballs
Units Percent
Complete Cost DataBasketballs 600
Materials Conversion Costs Materials Conversion Costs Costs accounted for:    Transferred out    Work in process, July 31       Materials       Conversion costs    Total costs Morse Company manufactures basketballs. Materials are added at the beginning of the production process and conversion costs are incurred uniformly. Production and cost data for the month of July 2014 are as follows.


Production DataBasketballs
Units Percent
Complete Work in process units, July 1 500 60 % Units started into production 1,250 Work in process units, July 31 600 40 % Cost DataBasketballs Work in process, July 1     Materials $750     Conversion costs 600 $1,350 Direct materials 2,400 Direct labor 1,580 Manufacturing overhead 1,295

Morse Company manufactures basketballs. Materials are added at the beginning of the production process and conversion costs are incurred uniformly. Production and cost data for the month of July 2014 are as follows Calculate the following. The equivalent units of production for materials and conversion costs. The unit costs of production for materials and conversion costs. (Round unit costs to 3 decimal places, e.g. 2.257.) The assignment of costs to units transferred out and in process at the end of the accounting period. (Round answers to 0 decimal places, e.g. 2,250.)

Explanation / Answer

Equivalent units of materials 1250

Equivalent units of conversion costs 1250+600*40%=1490

(b) Determine the unit costs of production.

Unit costs of materials $2400 / 1250 = $1.92

Unit costs of conversion costs (1580+1295) / 1490 = $1.93

(c) Show the assignment of costs to units transferred out and in process.

Costs to units transferred out 26,900 x 8.9 = $239,410

Costs to units in process $32,266

Materials (7,300 x 2.5) $18,250

Conversion costs: ($6.4 x 2,190*) 14,016

Total $32,266

*(7,300 x 30%)

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