The Cutting Department of Tangu Carpet Company provides the following data for D

Question

The Cutting Department of Tangu Carpet Company provides the following data for December 2014. Assume that all materials are added at the beginning of the process.

Work in process, December 1, 9,000 units, 65% completed $95,265*     *Direct materials (9,000 × $7.40) $66,600     Conversion (9,000 × 65% × $4.90) 28,665 $95,265 Materials added during December from Weaving Department, 138,800 units $1,034,060 Direct labor for December 309,398 Factory overhead for December 378,152 Goods finished during December (includes goods in process, December 1), 140,400 units — Work in process, December 31, 7,400 units, 40% completed — Tangu Carpet Company Cost of Production Report-Cutting Department For the Month Ended December 31, 2014 Unit Information Units charged to production: Inventory in process, December 1 Received from Weaving Department Total units accounted for by the Cutting Department Units to be assigned costs: Equivalent Units Whole Units Direct Materials Conversion Inventory in process, December 1 Started and completed in December Transferred to finished goods in December Inventory in process, December 31 Total units to be assigned cost Cost Information Costs per equivalent unit: Direct Materials Conversion Total costs for December in Cutting Department Total equivalent units Cost per equivalent unit

Explanation / Answer

a.

Cost of production report-cutting Department

equivalent units

Equivalent unit

3150

(9000×(1-.65))

7,400

7,400

2,960

(7400×.40)

Costs

$1,034,060

$687,550

(309398+378152)

Cost incurred in Dec

($1,034,060+$687,550)

$15,750

(3150×5)

$15,750

$978,930

(131400×7.45)

$657,000

(131400×5)

$1,635,930

$55,130

(7400×7.45)

$14,800

(2960×5)

b.

Material:

From current period=$7.45

From beginning inventory=$7.40

Increase=$0.05

Conversion:

From current period=$5.00

From beginning inventory=$4.90

Increase=$0.10

Whole units

equivalent units

Equivalent unit

Units Direct material conversion Units charged to production: Inventory in process, Dec 1 9000 Received from weaving Department 138,800 Total units accounted for by the cutting Department 147,800 Units to be assigned cost: Inventory in process,Dec 1(65% completed) 9000 0

3150

(9000×(1-.65))

Started and completed in Dec(138,800-7400) 131,400 131,400 131,400 Transferred to finished good in Jan 140,400 131,400 134,550 Inventory in process,Dec 31(40% completed)

7,400

7,400

2,960

(7400×.40)

Total units to be assigned cost 147,800 138,800 137,510

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