Problem T2-10 (Part Level Submission) Bricktown Bats buys wood as a direct mater

Question

Problem T2-10 (Part Level Submission) Bricktown Bats buys wood as a direct material for its baseball bats. The Forming Department processes the baseball bats, which are then transferred to the Finishing Department, where a sealant is applied. During the month of March the Forming Department began manufacturing 10,000 "Casey Sluggers." There was no beginning inventory that month. Costs added to the Forming Department that month were as follows: Direct materials $32,000 Conversion costs 16,000 Total $48,000 A total of 7,000 bats were completed and transferred to the Finishing Department in March; the remaining 3,000 bats were still in process at the end of the month. The bats in ending inventory were 100% complete with respect to materials, but were only 20% complete with respect to conversion

Explanation / Answer

direct material conversion cost % age of completion units % age of completion units completed units 100% 7000 100% 7000 cl WIP 100% 3000 20% 600 units 10000 7600 cost 32000 16000 cost per unit 3.2 2.11 cost of Wip 9600 1263.16 cost of Wip 10863.16

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