Morgan Industries, Inc., mass-produces street light. Materials used in construct

Question

Morgan Industries, Inc., mass-produces street light. Materials used in constructing the body of the lights added at the start of the process, while the materials used in wiring the lights are added at the halfway point. All labor and overhead are added evenly throughout the manufacturing process. Morgan uses process costing and had the following unit production information available for the months of March and April: In March, the lights in beginning work in process were approximately 60 percent complete, while those in ending work in process were only 20 percent complete. In April, the units remaining in ending work in process were 70 percent complete. All lights in ending work in process are finished during the next month. For the month of March, calculate the equivalent units of production for the three major cost 8 categories-body materials, wiring materials, and labor and overhead. For the month of April, calculate the equivalent units of production for the three major cost categories-body materials, wiring materials, and labor and overhead.

Explanation / Answer

Cost of Prduction report March Equivalent Units Flow Of Units Physical Units Body Material Wiring material Labor & overhead Units to be accounted for Beginning work in process inventory 600 Units started this period 5200 Total u nits to be accounted for    5800 Units accounnted for: Completed and transferred out (b) 4200 4200 4200 4200 Ending work in progress inventory© 1600 1600 0 320 Total units to be accounted for (f)      5800 5800 4200 4520 Ans Note Body materia, is added at start so it is 100% complete. Now Wiring material will be introduced half way i.e whe it is 50% complete. But in this case ending WIP is 20% complete so no wiring material used Cost of Prduction report April Equivalent Units Flow Of Units Physical Units Body Material Wiring material Labor & overhead Units to be accounted for Beginning work in process inventory 1600 Units started this period 3100 Total u nits to be accounted for    4700 Units accounnted for: Completed and transferred out (b) 4000 4000 4000 4000 Ending work in progress inventory© 700 700 700 490 Total units to be accounted for (f)      4700 4700 4700 4490 Ans Note Body materia, is added at start so it is 100% complete. Now Wiring material will be introduced half way i.e whe it is 50% complete. in this case ending WIP is 70% complete so 100% wiring material used. Dear student if you have any doubt kindly comment on the answer.

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