Problem 17-7A Owen Company manufactures bicycles and tricycles. For both product
ID: 2336219 • Letter: P
Question
Problem 17-7A
Owen Company manufactures bicycles and tricycles. For both products, materials are added at the beginning of the production process, and conversion costs are incurred uniformly. Owen Company uses the FIFO method to compute equivalent units. Production and cost data for the month of March are as follows.
Production Data—Bicycles Units Percentage Complete Work in process units, March 1 190 80 % Units started into production 1,400 Work in process units, March 31 310 40 %
Cost Data—Bicycles Work in process units, March 1 $19,330 Direct materials 50,000 Direct labor 26,500 Manufacturing overhead 29,900
Production Data—Tricycles Units Percentage Complete Work in process units, March 1 140 75 % Units started into production 1,000 Work in process units, March 31 60 25 %
Cost Data—Tricycles Work in process units, March 1 $6,050 Direct materials 30,400 Direct labor 14,200 Manufacturing overhead 19,800
1. Calculate the equivalent units of production for materials and conversion costs for both the bicycles and the tricycles.
2. Calculate the unit costs of production for materials and conversion costs for both the bicycles and the tricycles.
3. Calculate the assignment of costs to units transferred out and in process at the end of the accounting period for both the bicycles and the tricycles.
4. Prepare a production cost report for the month of March for the bicycles only
Explanation / Answer
Answer 1
Particular
Material
Conversion
Equivalent Units Bycycle
1590
1442
Equivalent Units Tricycle
1140
1130
Answer 2
Particular
Material
Conversion
Bycycle
31.4
39.1
TriCycles
26.67
30.09
Answer 3
Bycycle
Tricycle
Units
Cost
Units
Cost
Completed
1280
109645.4
1080
67345.58
WIP 31 March
310
14598.4
60
2051.36
Workings:-
Bicycles
March 1 WIP (1)
190
Unit started (2)
1400
March 31 WIP (3)
310
Unit Started and completed (1+2-3)
1280
Material
Conversion
Units (1)
% completed
% completion in March (2)
Equivelent Units (1*2)
Units (1)
% completed
% completion in March (2)
Equivelent Units (1*2)
March 1 WIP
190
100%
0%
0
190
80%
20%
38
Unit started and completed
1280
0%
100%
1280
1280
0%
100%
1280
March 31 WIP
310
0%
100%
310
310
0%
40%
124
1590
1442
Cost
Material
Direct Labour
Mfg Overhead
Total
During the month (1)
50000
26500
29900
Equivalent Units (2)
1590
1442
1442
Per Unit (3)=(1/2)
31.4
18.4
20.7
Unit transfered (4)
1280.0
1280.0
1280.0
Cost of unit Transffered (5)=(3)*(4)
40251.6
23522.9
26540.9
90315.4
Openin WIP cost (6)
19330
Total cost of unit Transfered (7)=(5+6)
109645.4
Equivalent Unit in WIP March 31 (8)
310.0
124.0
124.0
Closing WIP cost (3*8)
9748.4
2278.8
2571.2
14598.4
Tricycles
March 1 WIP (1)
140
Unit started (2)
1000
March 31 WIP (3)
60
Unit Started and completed (1+2-3)
1080
Material
Conversion
Units (1)
% completed
% completion in March (2)
Equivelent Units (1*2)
Units (1)
% completed
% completion in March (2)
Equivelent Units (1*2)
March 1 WIP
140
100%
0%
0
140
75%
25%
35
Unit started and completed
1080
0%
100%
1080
1080
0%
100%
1080
March 31 WIP
60
0%
100%
60
60
0%
25%
15
1140
1130
Cost
Material
Direct Labour
Mfg Overhead
Total
During the month (1)
30400
14200
19800
Equivalent Units (2)
1140
1130
1130
Per Unit (3)=(1/2)
26.6667
12.56637168
17.52212389
Unit transfered (4)
1080
1080
1080
Cost of unit Transffered (5)=(3)*(4)
28800
13571.68142
18923.89381
61295.57522
Openin WIP cost (6)
6050
Total cost of unit Transfered (7)=(5+6)
67345.57522
Equivalent Unit in WIP March 31 (8)
60
15
15
Closing WIP cost (3*8)
1600
188.4955752
262.8318584
2051.327434
Particular
Material
Conversion
Equivalent Units Bycycle
1590
1442
Equivalent Units Tricycle
1140
1130