ABC Industries manufactures specialized plastic boxes in two processes: Assembly
ID: 2339873 • Letter: A
Question
ABC Industries manufactures specialized plastic boxes in two processes: Assembly and Finishing. In the Finishing Department, materials are added at the end of the process. The following data pertaining to the Finishing Department are given: Units Transferred-in Direct Material:s $0 Conversion Costs $12,750 Costs | 10,000| SII,650 Work in process, July 1 Transferred-in Work in process, July 31 Costs added during July 60,000 12,000 $69,900 $35,200 $81,600 The conversion process on the beginning inventory is 30% complete and the ending inventory is one third complete. Weighted average method is used. (1) Determine the equivalent units for transferred-in, direct materials and conversion costs. (2) Determine the unit cost for transferred-in, the unit cost for direct materials and the unit cost for conversion costs (3) Determine the cost of goods transferred out.Explanation / Answer
a) Unit transferred out = 10000+60000-12000 = 58000
Equivalent unit of transferred in cost = 58000+(12000*100%) = 70000
Equivalent unit of material = 58000+(12000*100%) = 70000
Equivalent unit of conversion = 58000+(12000/3) = 62000
2) Unit cost for transferred int = (11650+69900)/70000 = 1.165
Unit cost for material = 35200/70000 = 0.503
Unit cost for conversion = (12750+81600)/62000 = 1.522
3) Cost of goods transferred out = (1.165+0.503+1.522)*58000 = $185020