The maximum department output is as follows: Dept.1 Dept.2 Dept.3 Dept.4 Units 7

Question

The maximum department output is as follows: Dept.1 Dept.2 Dept.3 Dept.4 Units 740 630 680 675 Which department is the most constraining? What is the maximum output for the company? If the constraining deportment's output were raised by 100 units, what would be the new maximum output? Where should inspections take place if there arc only enough inspectors to cover two departments? Compute equivalent units for each cost category of the Cutting Department of Robert's Designs for January. Units Beginning work in process 1,000 Started in production 20,000 Transferred out to next department 18,000 Ending work in process 2,500 Lost in production, normal 500 Stage of Completion of Work in Process: Beginning Ending Materials 100% 95% Labor 70 80 Overhead 85 90 Give the journal entries to record the following events for Juniper LLP. Juniper records all costs associated with by-products. A by-product with an estimated value of S370 was removed from the Cutting Department. The by-product was further processed at a cost of $210 for materials, $300 for labor, and $125 for overhead. The finished by-product was sold for $975 cash.

Explanation / Answer

2.

Equivalent units are computed by multiplying the number of physical units by the prcentage of work completed.

Percentage of work cmpleted for nits transferred out is always 100.

Since no specific method has been indicated n the question, weighted-average method has been used to compute the equivalent units.

Compute equivalent units for each cost category as follows:

Equivalen units for Materials = (18,000 x 100%) + (2,500 x 95%) = 20,375

Equivalent units for labor = (18,000 x 100%) + (2,500 x 80%) = 20,000

Equivalent units for overhead = (18,000 x 100%) + (2,500 x 90%) = 20,250

Normal wastage is not considered while computing equivalent units.

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