Managerial Accounting
Managerial Accounting
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The following information concerns production in the Forging Department for September. All direct materials are placed into the process at the beginning of production, and conversion costs are incurred evenly throughout the process. The beginning inventory consists of $110,970 of direct materials.
| ACCOUNT Work in Process—Forging Department | ACCOUNT NO. | ||||||||
| Date | Item | Debit | Credit | Balance | |||||
| Debit | Credit | ||||||||
| Sept. | 1 | Bal., 8,100 units, 30% completed | 119,232 | ||||||
| 30 | Direct materials, 74,000 units | 999,000 | 1,118,232 | ||||||
| 30 | Direct labor | 115,200 | 1,233,432 | ||||||
| 30 | Factory overhead | 159,095 | ? | 1,392,527 | |||||
| 30 | Goods finished, ? units | ? | |||||||
| 30 | Bal., 6,500 units, 80% completed | ? | |||||||
Based on the above data, determine each of the following amounts.
If required, round your interim calculations to two decimal places. Round final answers (a-c) to the nearest dollar.
- Cost of beginning work in process inventory completed in September.
$
- Cost of units transferred to the next department during September.
$
- Cost of ending work in process inventory on September 30.
$
- Costs per equivalent unit of direct materials and conversion included in the September 1 beginning work in process. If required, round your answers to two decimal places.
| Direct materials cost per equivalent unit | $ |
| Conversion cost per equivalent unit | $ |
- The September increase or decrease in costs per equivalent unit for direct materials and conversion from the previous month. If required, round your answers to two decimal places.
| Increase or Decrease | Amount | |
| Change in direct materials cost per equivalent unit | $ | |
| Change in conversion cost per equivalent unit | $ |
Problem 2
Four Finger Appliance Company manufactures small kitchen appliances. The product line consists of blenders and toaster ovens. Four Finger Appliance presently uses the multiple production department factory overhead rate method. The factory overhead is as follows:
| 1 | Assembly Department | $158,760.00 |
| 2 | Test and Pack Department | 113,925.00 |
| 3 | Total | $272,685.00 |
The direct labor information for the production of 8,160 units of each product is as follows:
| Department | ||
| Assembly | Test and Pack | |
| Blender | 675 dlh | 2,440 dlh |
| Toaster oven | 2,265 | 815 |
| Total | 2,940 dlh | 3,255 dlh |
Four Finger Appliance used direct labor hours (dlh) to allocate production department factory overhead to products.
Complete the Multiple-Department Overhead Table for blenders.
|
||||||||||
| Blenders | ||||||||||
| Activity | Allocation- | |||||||||
| Base | Activity | Activity | ||||||||
| Usage | X | Rate | = | Cost | ||||||
| Assembly Department | dlh | /dlh | ||||||||
| Test and Pack Department | dlh | /dlh | ||||||||
| Total | ||||||||||
| ÷ Units | ÷ | |||||||||
| Factory overhead cost per unit | ||||||||||
Complete the Multiple-Department Overhead Table for toaster ovens.
|
||||||
| Toaster Ovens | ||||||
| Activity | Allocation- | |||||
| Base | Activity | Activity | ||||
| Usage | X | Rate | = | Cost | ||
| Assembly Department | dlh | /dlh | ||||
| Test and Pack Department | dlh | /dlh | ||||
| Total | ||||||
| ÷ Units | ÷ | |||||
| Factory overhead cost per unit | ||||||
