Bicnell Corporation manufactures water skis through two processes: moulding and packaging. In the moulding department, fibre glass is heated and shaped into the form of a ski. In the packaging department, the skis are placed in cartons and sent to the finished goods warehouse. Materials are entered at the beginning of both processes. Labour and manufacturing overhead are incurred uniformly throughout each process. Production and cost data for the moulding department for January 2012 are presented below:
Production Data ..............................................January
Beginning work in process units .....................................0
Units started into production ...................................42,500
Ending work in process units .....................................2,500
Percent complete-ending inventory ............................40%
Cost Data
Materials .......................................................$510,000
Labour ............................................................96,000
Overhead .......................................................150,000
Total ...........................................................$756,000
Instructions
(a) Calculate the physical units of production.
(b) Determine the equivalent units of production for materials and conversion costs.
(c) Calculate the unit costs of production.
(d) Determine the costs to be assigned to the units transferred out and in process.
(e) Prepare a production cost report for the moulding department for the month of January.