Burleson Company manufactures car seats in its Denver plant. Each car seat passes through the assembly department and the testing department. This problem focuses on the assembly department. A (Click the icon to view information about Burleson Company's process-costing system.) Data for the assembly department for October 2017 are as follows: (Click the icon to view the assembly department data.) (Click the icon to view the weighted average cost per equivalent unit data and total costs accounted for.) i More Info - X Read the requirements. ent. Show physical Data Table - X be appropriate cell.) The process-costing system at Burleson Company has a single direct-cost category (direct materials) and a single indirect-cost category (conversion costs). Direct materials are added at the beginning of the process. Conversion costs are added evenly during the process. When the assembly department finishes work on each car seat, it is immediately transferred to testing. Burleson Company uses the EIE method of process costina Conversion Costs $602,700 i Reference Physical Units Direct (Car Seats) Materials Work in process, October 18 5,600 $1,590,400 Started during October 2017 24,000 Completed during October 2017 26,500 Work in process, October 31b 3,100 Total costs added during October 2017 $5,040,000 a Degree of completion: direct materials, ?%, conversion costs, 70%. Degree of completion direct materials, ?%, conversion costs, 80%. $2,556,120 i Requirements - X Print Done Direct Conversion Materials Costs Costs incurred to date $ 6,630,400 $ 3,158,820 Divide by equivalent units of work done to date 29,600 28,980 $ 224 $ Cost per equivalent unit for work done to date 109 Total Direct Conversion Production Costs Materials Costs Completed and transferred out $ 8,824,500 $ 5,936,000 $ 2,888,500 Work in process, ending 964,720 694,400 2 70.320 Total costs accounted for 9,789,220 $ 6,630,400 $ 3,158,820 1. For each cost category, compute equivalent units in the assembly department. Show physical units in the first column of your schedule. 2. For each cost category, summarize total assembly department costs for October 2017 and calculate the cost per equivalent unit. 3. Assign total costs to units completed and transferred out and to units in ending work in process. 4. Explain any difference between the cost per equivalent unit in the assembly department under the weighted average method and the FIFO method. 5. Should Burleson's managers choose the weighted average method or the FIFO method? Explain briefly. Print Done Clear All Requirement 1. For each cost category, compute equivalent units in the assembly department. Show physical units in the first column of your schedule. (For amounts with a 0 balance, make sure to enter "0" in the appropriate cell.) Physical Units Equivalent Units Direct Conversion Materials Costs Flow of Production Work in process beginning Started during current period To account for Completed and transferred out during current period: From beginning work in process Started and completed Work in process, ending Accounted for Equivalent units of work done in current period only Requirement 2. For each cost category, summarize total assembly department costs for October 2017 and calculate the cost per equivalent unit. Begin by summarizing the total costs to account for. Total Direct Conversion Production Costs Materials Costs Work in process, beginning Costs added in current period EA A Total costs to account for This question is complete. Move your cursor over or tap on the red arrows to see incorrect answers. Direct Materials Conversion Costs Costs added in current period Divide by equivalent units of work done in current period - Cost per equivalent unit for work done in current period Requirement 3. Assign total costs to units completed and transferred out and to units in ending work in process. Begin by calculating the total from beginning inventory, then calculate the total costs accounted for. (Abbreviation used; WIP = work in process. For amounts with a $0 balance, make sure to enter "0" in the appropriate cell.) Total Direct Materials Conversion Costs Production Costs Completed and transferred out: Work in process, beginning Costs added to beginning WIP in current period Total from beginning inventory Started and completed Total costs of units completed and transferred out Work in process, ending Total costs accounted for Requirement 4. Explain any difference between the cost per equivalent unit in the assembly department under the weighted-average method and the FIFO method. The cost per equivalent unit differs between the two methods because each method uses different costs as the numerator of the calculation. The FIFO method uses only the costs added during the current period costs from the beginning work-in-process as well as costs added during the current period. Both methods use different equivalent units in the denominator. Requirement 5. Should Berrian's managers choose the weighted average method or the FIFO method? Explain briefly. Begin by completing the table below that summarizes the costs assigned to units completed and those still in process under the weighted average and FIFO process-costing methods. Weighted average FIFO Difference Cost of units completed and transferred out Work in process, ending Total costs accounted for Berrian's managers should consider the FIFO method because even though it shows lower operating income and higher cost of goods sold, it lower taxes. Managers may have an incentive, however, to use the weighted-average method and show higher income if the managers' compensation increases with higher operating income or if there are debt covenants that would be violated by showing lower income. Another advantage of the FIFO method is that it provides better information for managing the business because it keeps separate the costs of the current period from costs incurred in previous periods