Drew Implements makes four models of utility and light construction tractors. The model names are DI-1400, DI-3800,
Question:
Drew Implements makes four models of utility and light construction tractors. The model names are DI-1400, DI-3800, DI-5000, and DI-8000. Drew manufactures the tractors in two departments—Fabrication and Detailing. All four models are processed initially in Fabrication, where all materials are assembled into the basic tractor. The DI-1400 model is then transferred to finished goods. After processing in Fabrication, the other three models are transferred to Detailing for additional work (though no new materials are added) and then transferred to finished good.
There were no beginning work-in-process inventories on February 1. Data for February are shown in the following table. Ending work in process is 90 percent complete in Fabrication and 40 percent complete in Detailing. Conversion costs are allocated based on the number of equivalent units processed in each department.
Required
a. What is the unit cost of each model transferred to finished goods in February?
b. What is the balance of the Work-in-Process Inventory on February 28 for Fabrication? For Detailing?
Step by Step Answer:
The solution to this problem is to apply process costing methods for the conversion costs and then a...View the full answer
