Owen Company manufactures bicycles and tricycles. For both products, materials are added at the beginning of the
Question:
Owen Company manufactures bicycles and tricycles. For both products, materials are added at the beginning of the production process, and conversion costs are incurred uniformly. Owen Company uses the FIFO method to compute equivalent units. Production and cost data for the month of March are as follows.
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Instructions
(a) Calculate the following for both the bicycles and the tricycles.
(1) The equivalent units of production for materials and conversion costs.
(2) The unit costs of production for materials and conversion costs.
(3) The assignment of costs to units transferred out and in process at the end of the accounting period.
(b) Prepare a production cost report for the month of March for the bicycles only.
Step by Step Answer:
a Bicycles 1 Equivalent unitsMaterials Physical Units Materials Added This Period Equivalent Units Work in process March 1 Started and completed Work in process March 31 Total 200 700 300 1200 1000 300 0 100 100 0 700 300 1000 All materials are added at the beginning of the production process Equivalent unitsConversion costs Physical Units Conversion Added This Period Equivalent Units Work in process March 1 200 20 1 8 40 Started and completed Work in process March 31 Total 700 300 1200 1000 300 100 40 700 120 860 2 Unit costs Materials Conversion Costs Costs in March a Equivalent units b Unit costs a b 50000 1000 50 55900 860 65 Direct Labor 25900 Manufacturing Overhead 30000 3 Assignment of costs to units transferred out and in process Costs to Be Assigned Assignment of Costs Equivalent Units Unit Cost Total Costs Assigned Total mfg costs Transferred out 125180 Work in process March 1 Conversion Started and completed Total costs transferred out 40 700 65 115 19280 2600 80500 102380 Work in process March 31 Materials Conversion costs Total costs 300 120 50 65 15000 7800 22800 125180 Work in process March 1 19280 Materials 50000 Labor 25900 Overhead 30000 Tricycles 1 Equivalent unitsMaterials Physical Units Materials Added This Period Equivalent Units Work in process March 1 100 0 0 Started and completed 940 1000 60 100 940 Work in process March 31 Total 60 1100 100 60 1000 All materials are added at the beginning of the production process Equivalent unitsConversion costs Physical Units Conversion Added This Period Equivalent Units Work in process March 1 100 25 1 75 25 Started and completed 940 1000 60 100 940 Work in process March 31 Total 60 1100 25 15 980 2 Unit costs Materials Conversion Costs Costs in March a Equivalent units b Unit costs a b 30000 1000 30 ...View the full answer
Managerial Accounting Tools for Business Decision Making
ISBN: 978-1119036432
7th edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
