Arnez, Inc., produces a subassembly used in the production of hydraulic cylinders. The subassemblies are produced in three departments: Plate Cutting, Rod Cutting, and Welding. Overhead is applied using the following drivers and activity rates:

Required:
1. Prepare a physical flow schedule.
2. Calculate equivalent units of production for:

a. Direct materials

b. Conversion costs 3. Calculate unit costs for:

a. Direct materials

b. Conversion costs

c. Total manufacturing 4. Provide the following information:

a. The total cost of units transferred out

b. The journal entry for transferring costs from Plate Cutting to Welding

c. The cost assigned to units in ending inventoryLO1

Transcribed Image Text:

Driver Direct labor cost Inspection hours Purchase orders Rate 75% of direct labor $20 per hour $500 per order Other data for the Plate Cutting Department are as follows: Beginning work in process Actual Usage (by Plate Cutting) $732,000 7,450 hours 800 orders Units started 740,000 Direct materials cost $3,700,000 Units, ending work in process (100% 40,000 materials; 80% conversion)