Porter Handcrart s a manutecturer at pichure trames tor large retailers. Every p
ID: 2394971 • Letter: P
Question
Porter Handcrart s a manutecturer at pichure trames tor large retailers. Every picture trame passes through two departments: the assembly department and the hnishing deparment This problem tocuses on the sssembly department The process-coshng system at Porter has a single direct cost category direct materials and a single indirect cost category conversion costs Drec mater als ere added when the assembly department process is 10% complete. Conversion costs are added evenly dunng the assembly deparient's process Porler uses Uhe FIFO ielhod of picess costing. Corisider the following dala for e asseribly deparmerit in April 2014 (Click the icon to view the data ) ? Click the icon to view the total costs assigned under the weighted average method.) 1 Summarizc tolal asscmbly deparlment costs for April 2014, and assign total costs to units complted (and transferred out) and to units in cnding work in process 2. Explain any difference between the cost of work completed ?nd trans er ed out ?nd he cost o ending work in process in the assembly depart ent under he weighted average method and the FIFO method. Should Porter's managers choose e weighled-ave' ago: 'relhod u' th?FIFO melhod? Explain briefly. Production Costs Materials Costs Work in process, beginning Cosls added in uurrenl period Total costs to account for Next calculate coet per equivalent un or direct materias and onversion costs 3349 S 28.900 32 249 S 2,110 S 19.240 21,350S 1,239 9,660 Direct Materials Costs Divide by Cost per equivakent unil Physical Units Direct Conversion (Frames) Materials S2,110 Costs Total Direct Converslon 90 S1,239 Deginning work in prooess, (April Started dunng Apnil 2014 Compktod duing April 2014 Ending work in process, (April 30 lotal costs added aDegree of completion. drectraler s. 100%, conversion costs, 40%. Production Costs Materials Costs Completed and transt Work in process, ending Total costs accounted for 6,320 6,450 S 5929 $ 470 140 870 1 009 4 900 $19,24D 02,249 S 21,350 10,000Explanation / Answer
Material Conversion Costs incurredn during April 19240 9660 Equivalent units 520 483 Cost per equivalent unit $37.00 $20.00 Account Work-in-process - Sifting Department Account No. Balance Date Debit Credit Debit 04/01/2014 Bal., 90 units, 40% complete 0 3349 04/30/2014 Direct Material, 520 units 19240 22589 04/30/2014 Conversion cost 9660 32249 04/30/2014 Finished goods 26089 6160 04/30/2014 Bal.140 units , 35% completed 6160 PORTER HADCRAFT Cost of Production Report Calculation of equivalent units Whole Equivalent Units Units Material Conversion Units charged into production Inventory in process, beginning (40% complete) 90 Started production 520 Total units accounted for by the Sifting Department 610 Units to be assigned costs: Beginning inventory 90 0 54 Started and finished 380 380 380 Inventory in process , Ending (35% complete) 140 140 49 Total units to be assigned costs 610 520 483 Costs Material Conversion Total Costs Cost per equivalent unit Total costs for April 19240 9660 28900 Total equivalent units 520 483 Cost per equivalent unit $37.00 $20.00 Costs charged to production: Inventory in process , Beginning 3349 Costs incurred in April 28900 Total costs accounted for in April 32249 Cost allocated to completed and partially completed units Beginning inventory 2110 1239 3349 Cost added to beginning inventory 0 1080 1080 Cost added to started and finished inventory 14060 7600 21660 Transferred to finished goods in April 16170 9919 26089 Inventory in process , Ending 5180 980 6160 Total costs assigned in April 32249