Carolina Manufacturing builds dog creates. Each dog create passes through the As
ID: 2577498 • Letter: C
Question
Carolina Manufacturing builds dog creates. Each dog create passes through the Assembly Department and the Quality Dept. You only need to look at the Assembly Department for this problem. The process accounting system at Carolina. has a single direct-cost category (direct materials) and a single indirect-cost category (conversion costs). Conversion costs are added evenly during the process. When the Assembly Dept finished work on each dog crate, it is immediately transferred to Quality.
Carolina uses the Weighted Average Cost Method of process costing. Data for the Assembly Department during July 2018 is:
Physical Units Direct Conversion
(Dog Crates) Materials Costs
Work-in-process, July 1* 7,000 $1,325,000 $505,500
Started during July 2018 25,000
Completed during July 2018 31,000
Work-in-process July 30** ?
Total costs added during
July 2018 $4,750,000 $2,678,000
*Degree of completion: DM 60%; CC 70%
**Degree of completion: DM 80%; CC 90%
You will need to complete the following:
a) Compute equivalent units in the Assembly Dept.
b) For each cost category, calculate the cost per equivalent unit.
c) Assign total costs to units completed and transferred out and to units in ending Work in Process
d) Prepare the journal entry to move costs from WIP-Assembly Department to the WIP- Quality Department
Explanation / Answer
Equivalent units Physical Units Material Conversion Units to be accounted for: Work in process, July 1 7000 Units started in July 25000 Total units to be accounted for 32000 Units accounted for: Units completed during the month 31000 31000 31000 Work in process, July 31 1000 800 900 a) Units accounted for 32000 31800 31900 Costs to be accounted for: Total costs Costs in beginning WIP $ 1,325,000 $ 505,000 $ 1,830,000 Costs added during the month $ 4,750,000 $ 2,678,000 $ 7,428,000 Total costs to be accounted for $ 6,075,000 $ 3,183,000 $ 9,258,000 Equivalent units of production 31800 31900 b) Cost per equivalent unit $ 191.04 $ 99.78 c) Costs accounted for: Units completed and transferred $ 5,922,170 $ 3,093,197 $ 9,015,367 Units in ending WIP $ 152,830 $ 89,803 $ 242,633 Costs accounted for $ 6,075,000 $ 3,183,000 $ 9,258,000 d) WIP-Quality Department $ 9,015,367 WIP-Assembly Department $ 9,015,367 (To move costs of completed units to Assembly Department)