Wilson Dynamics makes flanges in a continuous process through two departments: F

Question

Wilson Dynamics makes flanges in a continuous process through two departments: Forging and Assembly. All direct materials are added at the beginning of the process in the Forging Department, whereas all direct materials are added at the end of the process in the Assembly Department. Conversion costs are incurred uniformly over time in both departments. As units are completed in the Forging Department, they are transferred to the Assembly Department. The costs associated with the transferred units are included in the computation of the Assembly Department’s total costs. The information presented as follows was compiled at the end of July.

Required:

a. Complete the following requirements for the Forging Department.

1. Prepare a schedule showing units started and completed in the Forging Department during July.

2. Compute the equivalent units of direct materials and conversion for the Forging Department in July.

3. Determine the cost per equivalent unit of input resource for the Forging Department ­during July.

4. Prepare the summary journal entry required to transfer units from the Forging Department to the Assembly Department during July.

5. Compute the costs assigned to ending inventory in the Forging Department on July 31.

b. Complete the following requirements for the Assembly Department.

1. Prepare a schedule showing units started and completed in the Assembly Department during July.

2. Compute the equivalent units of direct materials and conversion for the Assembly Department in July. Direct materials include both those transferred in from the Forging Department and those added by the Assembly Department.

3. Determine the cost per equivalent unit of input resource for the Assembly Department during July.

4. Prepare the summary journal entry required to transfer units from the Assembly Department to Finished Goods Inventory during July.

5. Compute the costs assigned to ending inventory in the Assembly Department on July 31.

Forging
Department Assembly
Department Beginning Inventories (on July 1): Physical units in production carried forward from June 30 5,000 4,000 Costs: Transferred Forging costs carried forward from June 30 $ 68,000 Direct materials costs carried forward from June 30 $ 45,000 ? Conversion costs carried forward from June 30 16,000 3,000 Current Production (in July): Units started during July 75,000 ? Units in ending inventories as of July 31 8,000 16,000 Costs: Forging costs transferred to Assembly during July ? Direct materials costs incurred in July $ 675,000 $ 720,000 Conversion costs incurred in July 608,000 191,400 Percentage of Completion: Inventories with respect to conversion on July 1 40 % 25 % Inventories with respect to conversion on July 31 75 30

Explanation / Answer

If any doubt please comment.

ans a Cost of Prduction report (weighted avg method) ForgingDepartment Equivalent Units Flow Of Units Physical Units Transferred In Direct material Conversion Cost Units to be accounted for answer a1 Beginning work in process inventory 5000 Units started this period 75000 Total u nits to be accounted for    80000 Units accounnted for: Units transferred out (b) 72000 72000 72000 Ending work in progress inventory c (100% material and 75% conversion) 8000 8000 6000 Total units to be accounted for (f)      80000 answer a2 80000 78000 Flow of Cost Cost in the begnning work in progress inventory 61000 45000 16000 cost added to process 1283000 $675,000 $608,000 Total Cost to be accounted for (e)     1344000 720000 624000 Cost per equivalent unit (a)     answer a3 9.00 8.00 Cost accounted for Cost assigned to units transferred out (a*b) 1224000 ans a4 648000 576000 Cost in ending work in progress inventory (a*c)     120000 answer a5 72000 48000 Total Cost accounted for    1344000 720000 624000 Answer 2 Cost of Prduction report (weighted avg method) ForgingDepartment Equivalent Units Flow Of Units Physical Units Transferred In Direct material Conversion Cost Units to be accounted for answer b1 Beginning work in process inventory 4000 Units transferred in from forging department 72000 Total u nits to be accounted for    76000 Units accounnted for: Units transferred out (b) 60000 60000 60000 60000 Ending work in progress inventory c (100% transferred in, 0% material and 30% conversion) 16000 16000 0 4800 Total units to be accounted for (f)      76000 76000 60000 64800 answer b2 Flow of Cost Cost in the begnning work in progress inventory 71000 68000 0 3000 cost added to process 2135400 1224000 $720,000 $191,400 Total Cost to be accounted for (e)     2206400 1292000 720000 194400 Cost per equivalent unit (a)     17.00 12.00 3.00 answer b3 Cost accounted for Cost assigned to units transferred out (a*b) 1920000 1020000 720000 180000 answer b4 Cost in ending work in progress inventory (a*c)     286400 272000 0 14400 answer b5 Total Cost accounted for    2206400 1292000 720000 194400

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