Question
Larsen Company manufactures car seats in its San Antonio plant. Each car seat passes through the assembly department and the testing department. This problem focuses
Larsen Company manufactures car seats in its San Antonio plant. Each car seat passes through the assembly department and the testing department. This problem focuses on the assembly department. The process-costing system at Larsen Company has a single direct-cost category (direct materials) and a single indirectcost category (conversion costs). Direct materials are introduced at the beginning of the process, and conversion costs are incurred evenly throughout the manufacturing process. Once each unit is completed, it is transferred to testing department. Data for the month of March are as follows:
Beginning WIP (30% complete): Direct material Conversion costs TotalWIP Beginning inventory Units started during March Units completed and transferred out during March Ending WIP inventory (50% completed) Direct material cost added during March Conversion costs added during March
$ 25 000 3000 $ 28 000 20 000 80 000 units 88 000 units 12 000 units $ 220 000 $ 74 000
Required (a) Prepare a process cost report using the weighted average method. (4 points) (b) Prepare a process cost report using the FIFO method. (4 points) (c) What factors might affect the cost accountant's choice of process costing method? Explain. (2 points)
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