Weighted Average Method, Physical Flow, Equivalent Units, Unit Costs, Cost Assig

Question

Weighted Average Method, Physical Flow, Equivalent Units, Unit Costs, Cost Assignment, ABC

Swasey Fabrication, Inc., manufactures frames for bicycles. Each frame passes through three processes: Cutting, Welding, and Painting. In September, the Cutting Department of the Tulsa, Oklahoma, plant reported the following data:

In Cutting, all direct materials are added at the beginning of the process.

Beginning work in process consisted of 40,500 units, 20 percent complete with respect to direct labor and overhead. Costs in beginning inventory included direct materials, $1,215,000; direct labor, $222,600; and applied overhead, $150,000.

Costs added to production during the month were direct materials, $2,565,000; direct labor, $3,471,150. Overhead was assigned using the following information:

At the end of the month, 121,500 units were transferred out to Welding, leaving 13,500 units in ending work in process, or 25 percent complete.

Required:

1. Prepare a physical flow schedule.

   

Swasey Fabrication, Inc.

Physical Flow Schedule

Units to account for:

   

  

  

  

  

Total units to account for

  

Units accounted for:

   

  

  

  

  

Total units accounted for

  

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1. The physical flow schedule traces the units in process regardless of their stage of completion and provides the information needed for preparing the equivalent units schedule.

2. Calculate equivalent units of production for direct materials and conversion costs.

3. Compute unit cost under weighted average.

4. Calculate the cost of goods transferred to Welding at the end of the month. Calculate the cost of ending inventory.

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1. Prepare a physical flow schedule.

   

Swasey Fabrication, Inc.

Physical Flow Schedule

Units to account for:

   

  

  

  

  

Total units to account for

  

Units accounted for:

   

  

  

  

  

Total units accounted for

  

Explanation / Answer

Cutting Department Equivalent Units   $ Flow Of Units Physical Units Direct Material Conversion Cost Units to be accounted for Beginning work in process inventory 40500 Units started this period 94500 Total u nits to be accounted for 135000 Units accounnted for: Completed and transferred out (b) 121500 121500 121500 Ending work in progress inventory (c) 13500 3375 3375 Total units to be accounted for (f) 135000 124875 124875 Flow of Cost Cost in the begnning work in progress inventory 1587600 1215000 372600 Cost incurred 8436150 2565000 5871150 Total Cost to be accounted for (e) 10023750 3780000 6243750 Cost per equivalent unit (a)-   (e/f) 80.27 30.27 50.00 Cost accounted for Cost assigned to units transferred out (a*b) 9752837.84 3677837.84 6075000.00 Cost in ending work in progress inventory (a*c) 270912.16 102162.16 168750.00 Total Cost accounted for 10023750.00 3780000.00 6243750.00 Overhead=150*4000+750*1600+300*2000 2400000

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