Problem 17-3A (Part Level Submission) Thakin Industries Inc. manufactures dorm f
ID: 2396952 • Letter: P
Question
Problem 17-3A (Part Level Submission) Thakin Industries Inc. manufactures dorm furniture in separate processes. In each process, materials are entered at the beginning, and conversion costs are incurred uniformly. Production and cost data for the first process in making two products in two different manufacturing plants are as follows. Cutting Department Plant 1 T12-Tables Plant 2 C10-Chairs Production Data-Jul Work in process units, July 1 Units started into production Work in process units, July 31 Work in process percent complete 23,400 3,510 60 18,720 585 80 Cost Data-Jul Work in process, July 1 Materials Labor Overhead 444,600 274,248 121,680 $840,528 $0 336,960 128,700 122,616 $588,276 Total (a1) Your answer is correct. For each plant compute the physical units of production. T12 Tables C10 Chairs Units to be accounted for 23400 18720Explanation / Answer
Answer:-
T12 Tables
Material Cost = $ 444,600
Total Unit Started into Production = 23400 units
Therfore Per unit cost = 444600 / 23400 = Cost / Units = $19 per Unit
Closing WIP = 3510
Therefor Completed units = 23400 - 3510 = 19890 units
Now Equivalent units = Completed Units + % of Closing WIP completed
= 19890 + (3510 *60%) = 19890+ 2106 = 21996 Units
So Material cost = 21996 units * $19 = $ 417,924
and For conversion cost =
Total conversion Cost = Labour + OVerhead
= 274,248 + 121,680 = $ 395,928
Total Units Started with = 23,400
Per unit conversion cost = 395,928/23400 = $ 16.92 per unit
Equivalent unit = 21,996 units ( as computed above)
= 21996 * 16.92 = $ 372,172.30 rounded off to nearest $ = 372,172 Answer
Now for C10 Charis same process :-
Total material cost =$336,960
Total units started with = 18,720
Material cost per unit = 336960 /18720 =$18 per unit
Equivalent unit =
Total completed unit + % of WIP completed
= total completed unit = 18720 - 585= 18,135 units
% of WIP completed = 585 * 80% = 468 units
total equivalent units = 18135+468 = 18603 units
Material cost for equivalent units = 18603 * $18 =$334,854
Now for Conversion Cost =
Total conversion cost = 128700+122616
= $251316
Per unit Conversion cost = 251316 / 18720 = $ 13.425 per units
so COnversion cost for equivalent units =
$13.425 * 18,603 units ( as computed above ) = $249,745 .28
Rounded off to nearest $ = 249,745 answer.