Lexington Company produces baseball bats and cricket paddles. It has two departm

Question

Lexington Company produces baseball bats and cricket paddles. It has two departments that process all products. During July, the beginning work in process in the cutting department was half completed as to conversion, and complete as to direct materials. The beginning inventory included $40,000 for materials and $60,000 for conversion costs. Ending work-in-process inventory in the cutting department was 40% complete. Direct materials are added at the beginning of the process. Beginning work in process in the finishing department was 80% complete as to conversion. Direct materials for finishing the units are added near the end of the process. Beginning inventories included $24,000 for transferred-in costs and $28,000 for conversion costs. Ending inventory was 30% complete. Additional information about the two departments follows: Cutting Finishing Beginning work-in-process units 20,000 24,000 Units started this period 60,000 Units transferred this period 64,000 68,000 Ending work-in-process units 20,000 Material costs added $48,000 $34,000 Conversion costs 28,000 68,500 Transferred-out cost 128,000 Using FIFO costing method for the finishing department answer the following questions. 1. What are equivalent units for conversion costs? 2. What are equivalent units for trans-in costs? 3. What is equivalent unit costs for direct materials? 4. What is equivalent unit costs for trans-in costs? 5. What is total costs assigned to transferred out units?

Explanation / Answer

Solutions: FIFO Method Flow of Production Physical Units Direct Materials Conversion Trans-In Work in process, beginning 24,000 Started during period 64,000      To account 88,000 Good units completed Beginning work in process 24,000 24,000 4,800 Started and completed 44,000 44,000 44,000 44,000 Ending work in process 20,000 0 6,000 20,000      Accounted 88,000 68,000 54,800 64,000 Cost Totals Direct Materials Conversion Trans-In WIP, beginning                        52,000.00 Costs added during period 230,500                         34,000.00             68,500.00        128,000.00 Total costs to account for                      282,500.00                         34,000.00             68,500.00        128,000.00 Divided by equivalent units 68,000 54,800 64,000 Equivalent-unit costs                                   3.75                                    0.50                        1.25                     2.00 Assignment of cost Work in process, beginning                         52,000.00 Completion of beginning:      Direct Materials (24,000 x 0.50)                        12,000.00      Conversion (4,800 x 1.25)                          6,000.00                         18,000.00 Total Beginning Inventory                         70,000.00 Started and Completed (44,000 x 3.75)                       165,000.00 Total costs transferred out                       235,000.00 Work in process ending:      Transferred-in (20,000 x 2.00)                        40,000.00      Conversion (20,000 x 1.25 x 0.30)                          7,500.00                         47,500.00 Costs accounted                       282,500.00

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.