A company that makes baseball gloves produces them using 2 production department

Question

A company that makes baseball gloves produces them using 2 production departments. When the gloves are produced they first go through the Fabrication Department, which produces the pieces that are later assembled into a glove. After the Fabrication Department completes its work on the glove, the glove goes to the Assembly Department to finish putting the glove together.

The following data is for the Assembly Department (the second department that works on the gloves) for the month of November:

Units in the beginning work-in-process inventory                                                9,000

Units started during the month                                                                            51,000

Units completed during the month and transferred to Finished Goods              52,000

Units in the ending work-in-process inventory                                                    8,000

Units in the ending work-in-process inventory are 75% completed in terms of direct materials and 45% completed in terms of conversion costs  

Costs in the beginning work-in-process inventory - $45,000 of costs transferred in from the Fabrication Department, $55,000 of direct materials costs, and $70,000 of conversion costs

Costs added in the month of November - $255,000 of costs transferred in from the Fabrication Department, $293,000 of direct materials costs, and $319,200 of conversion costs

Please complete the 5 steps of involved in process costing:

Account for all the units

Calculate the number of equivalent units in terms of transferred-in costs, direct materials and conversion costs

Calculate the amounts spent on transferred-in costs, direct materials and conversion costs

Calculate the cost per equivalent unit for transferred-in costs, direct materials and conversion costs

Allocate the total amount spent between the cost of goods completed (transferred to Finished Goods) and the cost assigned to the ending work-in-process inventory.

Explanation / Answer

Assembly department: Phy units Transf In D Material Conversion Total B WIP (on weighted avg. basis) 9000 9000 9000 9000 Started and completed 43000 43000 43000 43000 transf out 52000 C WIP 8000 8000 6000 3600 Equivalent units 60000 58000 55600 Total cost: B wip   45000 55000 70000 Incurred in month 255000 293000 319200 Total cost 300000 348000 389200 $1037200 Cost per Eq unit 5 6 7 Cost of Transf. out 260000 312000 364000 936000 Cost of C WIP 40000 36000 25200 101200 TOTAL COST: $1037200

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