Question
Department A: assembles frame of snowmobile Department B: mounts chassis, drive belt and drive system onto frame Department C: mounts engine onto frame, then connects
Department A: assembles frame of snowmobile
Department B: mounts chassis, drive belt and drive system onto frame
Department C: mounts engine onto frame, then connects and adjusts drive system Department
D: installs electrical system and performs functionality test on unit Department
E: mounts body panels and completes finish work (then transfers units out to finished goods warehouse to later be shipped to retail dealers)
Lets say you are the production supervisor of Department B and its currently the end of the day on October 31. You need to do a quick analysis of the production activity that recently occurred during the month of October in your department. Heres some pertinent information about production in Department B for the month of October: Number of units transferred in (these came in from Department A): 250 Number of completed units transferred out (these went out to Department C): 200 Number of WIP units on Oct 1 (i.e., at the beginning of the month in our department): 50 Number of partially completed (WIP) units as of Oct 31 still sitting in our department: 100 As the production supervisor for Department B, you know from the above data that this department finished and transferred out 200 completed units. However, youre also required to apply judgment and make an estimate regarding the percentage of completion, as of the end of October, for the partially completed units in your department. You walk through the production area and take a good look at all of the incomplete WIP units still sitting in your department (remember that there are 100 of these unfinished units in various stages of completion), and here are your estimates:
With respect to material costs: 80% complete With respect to conversion costs: 50% complete
Specifically with respect to conversion costs, how many equivalent units are in Department Bsending Work in Process (WIP) inventory for October? (Remember that WIP inventory represents just the unfinished or incomplete units still in our department)
Again with respect to conversion, what are the total equivalent units of production for Department B during October?
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