PART B. Problems

1. The CINEDivision of OMAR Sports Equipment Companymanufactures baseball gloves in its Milwaukee plant. Two production departments are used in sequence: the Cutting Department and the Stitching Department. In the Cutting Department, direct material consisting of imitation leather is placed into production at the beginning of the process. Direct-labor and manufacturing overhead costs are incurred uniformly throughout the process. The material is rolled to make it softer and then cut into the pieces needed to produce baseball gloves.

Below is presented a summary of the activity and costs in the Cutting Department during March. The direct-material and conversion costs listed below for the March 1 work in process consist of costs that were incurred during February. These costs were assigned to the units remaining in process at the end of February.

INFORMATION

Work in process, March 1	25,000 units
Direct material: 100% complete, cost of	$143,000
Conversion: 40% complete, cost of	474,700
Balance in work in process, March 1	$617,700
Units started during March	30,000 units
Units completed during March and transferred out of the Cutting Department	35,000 units
Work in process, March 31
Direct Material: 100% complete
Conversion: 80% complete
Costs incurred during March:
Direct material	$165,000
Conversion costs:
Direct labor	$1,000,000
Applied manufacturing overhead	1,174,000
Total conversion costs	$2,174,000

Required: Weighted Average and FIFO methods

Prepare a physical flow schedule for the month of March.

Calculate equivalent units for materials AND equivalent units for conversion.

Calculate cost per equivalent unit for materials AND cost per equivalent unit for conversion.

Calculate the value of work in process inventory on March 31 and cost of goods transferred out during March.