fro Old Victrola, Inc. produces top-quality stereos and uses process costing. Th
ID: 2557288 • Letter: F
Question
fro Old Victrola, Inc. produces top-quality stereos and uses process costing. The manufacture of stereos is such that direct materials, labor, and overhead are all added evenly throughout the production process. Due to the smooth production process, only one cost category-manufacturing costs-is used for equivalent unit calculations. Old Victrola had the following cost and production information available for the months of March and April. March April $ 978,460 $1,168,310 2,562,260 3,041,940 3,438,640 3,571,030 $6,979,360 $7,781,280 4,800 23,300 6,400 Direct materials costs Direct labor costs Manufacturing overhead applied Total manufacturing costs Units in beginning work in process Units transferred to finished goods Units in ending work in process 8,700 19,700 4,800 Beginning work in process was 30 percent complete in March and 60 percent complete in April. Ending work in process was 60 percent complete in March and 35 percent complete in April. a. For each of the two months, calculate the equivalent units of production. b-1. For each of the two months, calculate the manufacturing cost per equivalent unit. b-2. Based on equivalent units produced, did total manufacturing costs per unit increase or decrease between March and April? c-1. For each of the two months, calculate the direct materials cost per equivalent unit. c-2.Did the direct materials cost per equivalent unit increase or decrease between March and April? Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Req C1 Req C2 For each of the two months, calculate the equivalent units of production. March AprilExplanation / Answer
a1.
Note 1 - Total units transferred to finished goods also include the begining WIP which has been converted into Finished goods .So the goods which are proceesed completely and sent to Finished goods are 11000 (19700-8700) & 18500 (23300-4800) for march and april respectively.
b1
Manufacturing cost per equivalent unit = total manufacturing cost/total equivalent units
For march = 6979360/19970
=349.49
For april =7781280/22660=343.39
b2
Based on the claculation mentioned in part b1 we can say that manufacturing cost per equivalent unit in march is higher by $6.1
C1
Direct material cost per equivalent unit = Direct material cost / equivalent units
for march = 978460/19970=49
For april = 1168310/22660=51.55
C2
Based on the claculation mentioned in part c1 we can say that direct material cost per equivalent unit in april is higher by $2.55
Statement of Equivalent units for march opening WIP 8700 X.7 6090 ADD: Produced during march 11000(note 1 ) 11000 ADD: Closing WIP 4800x.6 2880 Total equivant units 19970 Statement of Equivalent units for april opening WIP 4800x.4 1920 ADD: Produced during april 18500(note 1) 18500 ADD: Closing WIP 6400x.35 2240 Total equivant units 22660Related Questions
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