Question
Part 2: Process Costing Intrepid Industries manufactures sterile parts used in medical equipment. The company uses the weighted-average process costing method to account for production
Part 2: Process Costing
Intrepid Industries manufactures sterile parts used in medical equipment. The company uses the weighted-average process costing method to account for production costs. It produces parts in three different departments: Forming, Sterilization, and Assembling.
The following information was reported for the Assembling Department for the month of June:
Beginning work-in-progress inventory on June 1 had 250,000 units made up of the following:
Amount Degree of Completion
Prior department costs transferred in from the Forming Department:
$387,600 100%
Costs added by the Sterilization Department:
Direct materials: $317,200 100%
Direct labor: $120,050 40%
Manufacturing O/H:$67,100 30%
$504,350
Work in process, June 1: $891,950
During June, 580,000 units were transferred in from the Forming Department at a cost of $1,870,000.
The Assembling Department added the following costs:
Direct Materials:$974,800.00
Direct Labor:$318,600.00
Manufacturing OH:$202,000.00
Total Costs Added:$1495,400.00
Assembling finished 480,000 units and transferred them to the Sterilization Department. At June 30, the number of units in ending work-in-progress inventory was 350,000.
The degree of completion of work-in-process inventory at June 30 was as indicated below:
Direct Materials:80%
Direct Labor:65%
Manufacturing OH:30%
QUESTION NEEDED HELP WITH:
B)Management wants to lower the costs of manufacturing the parts. It has established the following per unit targets for this product in the Assembling Department: QUESTION: Has the product achieved managements cost targets in the Assembling Department?
Write a short report to management containing your answer(s).
Materials: $1.65
Labor, $.62
Manufacturing O/H $0.48
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