Please work step by step ACCT 320: Cost Accounting Mid-Term Exam Spring 2018 Pro
ID: 2548655 • Letter: P
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ACCT 320: Cost Accounting Mid-Term Exam Spring 2018 Problem #01: (50 points) Swasey Fabrication, Inc. of Tulsa, Oklahoma, manufactures frames for motorcycles. Each frame passes through three process departme) Cuting,() WeldingandG) Painting. In February 2018, the Cutting Department reported the following data: a) In cutting, all direct materials are added at the beginning of the production process b) Beginning Work in Process consisted of 40,000 units, 20% complete with respect to conversion costs. Costs in the Beginning Work in Process included direct materials for 500,000; direct labor for $300,000; and applied factory overhead for $156,000. c) Costs added to production during the month of February 2018 were direct materials for $2,565,000; direct labor for $3,471,150; overhead was assigned to production based on activity-based costing using the following information: Activity Driver Usage 5,000 inspection hours Activity Rate Activity Inspection Maintenance Receiving $750 per maintenance hour $300 per receiving order 3,000 maintenance hours 2,000 receiving orders Welding Department, leaving 14,000 units in the ending Work in Process, completed up to 25%. d) At the end of the month, 122,000 units were finished and transferred out to the Required: Prepare Swasey February production report using the FIFO method (pleas show clearly all calculations; round unit costs to closest two decimals).Explanation / Answer
beginning inventory
40000 units
% completed
20%
equivalent units completed
8000
=40000*0.2
beginning cost of work in progress
direct material
$ 500,000
Direct Labour
$ 300,000
Applied Factory Overheads
$ 156,000
$ 956,000
Production Costs
direct material
$ 2,565,000
Direct Labour
$ 3,471,150
Applied Factory Overheads
Inspection Cost
$ 750,000
=5000*150
Maintenance Cost
$ 2,250,000
=750*3000
Receiving Costs
$ 600,000
=300*2000
$ 9,636,150
Ending Work in Progress
14000 units
% completed
25%
equivalent units completed
3500
=14000*0.25
Goods Finished and Transferred
122000
Goods Finished from the opening inventory
8000
Goods Finished from the closing inventory
3500
Goods Finished during the month
117500
=122000-8000+3500
Cost per unit of production
$ 82.01
=9636150/117500
February Production Report
Opening Inventory
$ 956,000
Costs of production during the month
$ 9,636,150
Less: Goods finished and transferred out to the welding Department
$ 10,005,194
=122000*82.01
Closing inventory
$ 586,956
beginning inventory
40000 units
% completed
20%
equivalent units completed
8000
=40000*0.2
beginning cost of work in progress
direct material
$ 500,000
Direct Labour
$ 300,000
Applied Factory Overheads
$ 156,000
$ 956,000
Production Costs
direct material
$ 2,565,000
Direct Labour
$ 3,471,150
Applied Factory Overheads
Inspection Cost
$ 750,000
=5000*150
Maintenance Cost
$ 2,250,000
=750*3000
Receiving Costs
$ 600,000
=300*2000
$ 9,636,150
Ending Work in Progress
14000 units
% completed
25%
equivalent units completed
3500
=14000*0.25
Goods Finished and Transferred
122000
Goods Finished from the opening inventory
8000
Goods Finished from the closing inventory
3500
Goods Finished during the month
117500
=122000-8000+3500
Cost per unit of production
$ 82.01
=9636150/117500
February Production Report
Opening Inventory
$ 956,000
Costs of production during the month
$ 9,636,150
Less: Goods finished and transferred out to the welding Department
$ 10,005,194
=122000*82.01
Closing inventory
$ 586,956