NO Chart was provided. Spectre Chemicals produces Canovic in a two-department pr
ID: 2404058 • Letter: N
Question
NO Chart was provided.
Spectre Chemicals produces Canovic in a two-department process. Information on the two departments for March and April 2016 are as follows:
MARCH 2016:
Department 1: The Company had beginning inventory of 6,000 units, 40% completed with a cost of $45,000. During the month, the department transferred in 22,000 units of the direct materials with a cost of $10 per unit. Ending inventory was 7,000 units, 30% completed. Direct labor is $310,500 and factory overhead is $103,500.
Department 2: The Company had beginning inventory of 5,000 units, 70% completed with a cost of $80,000. During the month, direct labor was $175,000 and factory overhead was $87,500. Ending inventory was 10,000 units, 50% completed.
APRIL 2016:
Department 1: During the month, the department transferred in 20,000 units of the direct materials with a cost of $11 per unit. Direct labor is $209,000 and factory overhead is $104,500. Ending inventory is 10,000 units 60% completed.
Department 2: During the month, direct labor is $175,000 and factory overhead is $87,500. The company had ending inventory of 5,000 units, 70% completed with a cost of $80,000. Required:
-Compute the Equivalent Units of Production, Material costs, and Conversion costs for each department for March and April 2014.
-Complete the attached chart – one for each department and each month.
-Prepare a cost of production report for March and April 2014.
Explanation / Answer
Solution:
Spectre Chemicals Department 1 - For the month of March Computation of Equivalent unit (FIFO) Particulars Physical units Material Conversion Units to be accounted for: Beginning WIP Inventory 6000 Units started this period 22000 Total unit to be accounted for 28000 Units Accounted for: Units completed and transferred out From beginning inventoryMaterial - 0%
Conversion - 60% 6000 0 3600 Started and completed currently 15000 15000 15000 Units in ending WIP
Material - 100%
Conversion - 30% 7000 7000 2100 Total units accounted for 28000 22000 20700
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