Question
Atlantis Handcraft is a manufacturer of picture frames for large retailers. Every picture frame passes through two departments: the assembly department and the finishing department.
Atlantis Handcraft is a manufacturer of picture frames for large retailers. Every picture frame passes through two departments: the assembly department and the finishing department. This problem focuses on the assembly department. The process-costing system at Atlantis has Assignment File 17 a single direct-cost category (direct materials) and a single indirect cost category (conversion costs). Direct materials are added when the assembly department process is 10% complete. Conversion costs are added evenly during the assembly departments process.
Atlantis uses the weighted-average method of process costing. Consider the following data for the assembly department in April 20x7
Physical unit (Frames) | Direct materials | Conversion costs | |||
Work in process, April 1a | 60 | 15300.00 | 1560.00 | ||
Started during April 20x7 | 510 | ||||
Completed during April 20x7 | 450.00 | ||||
Work in process, April 30b | 120.00 | ||||
Total costs added during April 20x7 | 178500.00 | 115440.00 | |||
a degree of completion: direct materials, 100%; conversion costs, 40% | |||||
b degree of completion: direct materials, 100%; conversion costs, 15% |
Required
a.Summarize the total assembly department costs for April 20x7, and assign them to units completed (and transferred out) and to units in ending work in process. (16 marks)
b.What issues should a manager focus on when reviewing the equivalent unit calculation? (4 marks)
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