P17-36 (similar to) Question Help Mundy Handcraft is a manufacturer of picture f
ID: 2394139 • Letter: P
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P17-36 (similar to) Question Help Mundy Handcraft is a manufacturer of picture frames for large retailers. Every picture trame passos through two departments: the asscmbly department and the finishing department This problem focuses on the asscmbly department. The procoss-costing system at Mund has a sin le direc cost cate o direct ma nals a si e in ce cate o convers on sts Direct materia are ed when the as emb de a ment process s 0% complete onw rsion ts are added even dunng the assembly department's process Mundy uses the weighted-average method of process costing. Consider the tollowing data for the assembly department in April 2014: ?(Click the icon to view the data.) Requirements 1Surnarice tolal assembly deparlmen costs Apil 2014, ad assign tolal osls lo unils npleled (arid transfered oul ard lo urils in en 2. Wnat issues should a mansger tocis on when rewewing the equvelent units calculation? To accounl fo ng work in process. Data Table 455 455 455 Completed and transferred out during current period Work in process, ending Actounted or Equivalenl uniits of work dorne lo dale Now summarize the total costs to account for 130 130 39 Physical Units Direct Conversion 585 494 (Frames) Materials Costs 1 «i $9H8 Work in process, April 1 Started during April 2014 Completed during April 2014 Total Conversion wark in prncess, Aprl 30 lotal costs added during April 2014 ? Degree of completion: direct materials 100%; conversion costs, 40% h Degree of completion: direct meterials. 100%, conversion costs, 30%. Production Costs Materials Costs $17 640 $11856 Work in process, beginn Work in process, endin Iotal cosis to account tor Print Done Choose from any list or enter any number in the input fields and then click Check AnswerExplanation / Answer
UNITS TO ACCOUNT FOR: Beginning Work in Process units 95 Add: Units Started in Process 490 Total Units to account for: 585 UNITS TO BE ACCOUNTED FOR: Units started and completed 455 Ending Work in Process 130 Total Units to be accounted for: 585 Equivalent Units: Material Cost Conversion % Completion Units % Completion Units Units started and completed 100% 455 100% 455 Ending Work in Process 100% 130 30% 39 Total Equivalent units 585 494 TOTAL COST TO ACCOUNT FOR: Material Conversion Beginning work in Process 1,665 988 Cost Added during May 17,640 11,856 Total Cost to account for: 19,305 12,844 Total Cost to account for: 32,149 COST PER EQUIVALENT UNIT: Material Conversion Total cost added during the year 19,305 12,844 Equivalent Units 585 494 Cost per Equivalent unit 33 26 TOTAL COST ACCOUNTED FOR: Units started and Transferred out (455 units) Equivalent unit Cost per EU Total Cost Material 455 33 15015 Conversion Cost 455 26 11830 Total Cost of Units completed and transferred out: 26845 Ending Work in process (130 units) Equivalent unit Cost per EU Total Cost Material 130 33 4290 Conversison Cost 39 26 1014 Total cost of Ending Work in process: 5,304 The major issue faced by the manager while making analysis is the accuracy of finiding the degree of completion of work in process with regard to all element of cost. With the minor inaccuracies, the cost of product will fluctuate a lot which will provide incorrect profit or lead to wrong computation of selling price.
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