Sounds Great Speaker, Inc makes stereo speakers for home use The process involves work in two departments ^. Assembly, where the speakers arc assembled, and Packaging, where the speakers are packed and prepared for shipment.

In the Assembly Department, Direct Material is added at the beginning of the process, Conversion Costs arc added evenly throughout the process, and Inspection is performed at the end of the process (Normal Spoilage is 6% of good units). In the Packaging Department, Direct Material is added at the beginning of the process, Conversion Costs are added evenly throughout the process, no inspection is made in this department. The FIFO method of process costing is used. (Round cost per equivalent unit to 4 decimal places where necessary.)

You have been hired by the company and begin work at the end of February. You are to complete the production cost worksheets for both departments for the months of January and February. You arc also asked to make the end-of-the month journal entry for each department for each month and to summarize the activity in each WIP account over the two-month period using T-accounts. (Round to whole dollars in the Assignment of Costs section.) Assume that the regular day-to-day entries for the requisition of DM and the application of CC have already been made by an accounting staff member.

Assembly Department, - january

B1....................................1,200 units (cc=35%)

Started ...........................3,300 units

Completed &

Trans Out................... 3,500 units

El ........................................800 units (cc=55%)

Costs:

B1 DM......................... $28,200

CC ..........................$3,360

Current

DM................................. $75,900

CC................................... $31,620

Assembly Department - February

BI

Started............... 3,900 units

Completed &

El....................................1,175 units (ec=50%)

Costs

BI-

Current

DM.................................$88,725

CC..................................$31,164