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Prepare a statement of equivalent production to determine the equivalent units for direct materials (From Moulding & Direct Material Added), and conversion costs and the cost per equivalent unit for direct materials and conversion costs. (b)  Calculate the: -  Total cost of units completed and transferred to the Packaging Department -  Cost of the unexpected losses -  Cost of ending work-in-process inventory in the Polishing Departmen

Prepare a statement of equivalent production to determine the equivalent units for direct materials (From Moulding & Direct Material Added), and conversion costs and the cost per equivalent unit for direct materials and conversion costs. (b)  Calculate the: -  Total cost of units completed and transferred to the Packaging Department -  Cost of the unexpected losses -  Cost of ending work-in-process inventory in the Polishing Departmen

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter6: Process Costing
Section: Chapter Questions
Problem 42P: Larkin Company produces leather strips for western belts using three processes: cutting, design and...
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(a)  Prepare a statement of equivalent production to determine the equivalent units for direct materials (From Moulding & Direct Material Added), and conversion costs and the cost per equivalent unit for direct materials and conversion costs.

(b)  Calculate the:

  • -  Total cost of units completed and transferred to the Packaging Department

  • -  Cost of the unexpected losses

  • -  Cost of ending work-in-process inventory in the Polishing Department 

All Things Brass produces brass handles for the furniture industry in a four-stage process -Mixing, Moulding, Polishing and Packaging. Costs incurred in the Polishing Department during January are summarized as follows: WIP - Polishing Process A/C $ 0 January 1 Bal. Transfer from Moulding 20,000 1,310,000 Direct Materials Added 391,600 Direct Labour 638,000 Manufacturing Overhead 307,400 Normal losses are estimated to be 2%% of input during the period. Inspection takes place during the processing operation, at which point damaged handles are separated from good handles and sold as scrap to local furniture manufacturers at $85 each. At inspection, 2,000 handles were rejected as scrap. These units had reached the following degree of completion: Transfer from Moulding 100% Direct material added 40% Conversion costs 20% Work-in-progress at the end of January was 4,000 handles and had reached the following degree of completion: Transfer from Moulding 100% Direct material added 80% Conversion costs 50% Direct materials added and conversion costs are incurred uniformly throughout the process.
Transcribed Image Text:All Things Brass produces brass handles for the furniture industry in a four-stage process -Mixing, Moulding, Polishing and Packaging. Costs incurred in the Polishing Department during January are summarized as follows: WIP - Polishing Process A/C $ 0 January 1 Bal. Transfer from Moulding 20,000 1,310,000 Direct Materials Added 391,600 Direct Labour 638,000 Manufacturing Overhead 307,400 Normal losses are estimated to be 2%% of input during the period. Inspection takes place during the processing operation, at which point damaged handles are separated from good handles and sold as scrap to local furniture manufacturers at $85 each. At inspection, 2,000 handles were rejected as scrap. These units had reached the following degree of completion: Transfer from Moulding 100% Direct material added 40% Conversion costs 20% Work-in-progress at the end of January was 4,000 handles and had reached the following degree of completion: Transfer from Moulding 100% Direct material added 80% Conversion costs 50% Direct materials added and conversion costs are incurred uniformly throughout the process.
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