Part 2: Process Costing Intrepid Industries manufactures sterile parts used in m
ID: 2429824 • Letter: P
Question
Part 2: Process Costing Intrepid Industries manufactures sterile parts used in medical equipment. The company uses the weighted-average process costing method to account for production costs produces parts in three different departments: Forming Sterilization, and Assembling- The following information was reported for the Assembling Department for the month of June: Beginning work-n-progress inventory on June 1 had 250,000 units made up of the following Amount Degree of Completion 100% $387,600 Prior department costs transferred in from the Forming Department Costs added by the Sterl Direct materials Direct labor 317.200 100% 120,05 40% overhead 30% $504,350 $891,950 Work in process, June 1 During June 580,000 units were transferred in from the Forming Department at a cost of $1,870,000. The Assembling Department added the following costs Direct materials Direct labor $974,800 318,600 $1.495,400 Total costs added Assembling finished 480.000 units and transferred them to the Sterilization Department. At June 30, the number degree of completion of work-in-process inventory at June 30 was as indicated below of units in ending work-in-progress Inventory was 350,000. The Direct materials Direct labor Manufacturing overhead 80% 65 30 Prepare a correctly formatted (including heading) production cost report (see Exhibit 8.11 as a example report) using the weighted-average method. A. B. Management wants to lower the costs of manufacturing the parts. It has established the following per unit targets for this product in the Assembling Department materials $1.65; labor, $.62, and manufacturing overhead $0.48. Has the product achieved management's cost targets in the Assembling Department? Write a short report to management containing your answer(s). a correctly formatted (including heading) production cost report (see S Exhibit 8.12 as a example report) using the FIFO method using the data given in Question A with one exception: the beginning direct materials costs as of June 1 listed in work-in-process should be $315,700 instead of $317,200 D. Using data from the FIFO report, write a short report to management addressing ssues raised in Question BExplanation / Answer
Short Report to the Management Direct Materials Direct Labour Mfg. OH Target Cost per eu $ 1.65 $ 0.62 $ 0.48 Cost per eu achieved $ 1.91 $ 0.52 $ 0.40 Conclusion- Whether target costs achieved or not ? Not Achieved Achieved Achieved The company has achieved target costs for Direct Labour and Manufacturing OH But, the management was unable to achieve such targets for the Direct material cost p.u