Physical Flow, Equivalent Units, Unit Costs, No Beginning WIP Inventory, Activity$-$Based Costing, DBC

McKay, Inc., produces a subassembly used in the production of hydraulic cylinders. The subassemblies are produced in three departments: Plate Cutting, Rod Cutting, and Welding. Materials are added at the beginning of the process. Overhead is applied using the following drivers and activity rates:

Driver Rate Actual Usage

$($by Plate Cutting$)$

Direct labor cost $120\%$ of direct labor $$330,000$

Inspection hours $$40$ per hour $4,002$ hours

Number of moves $$100$ per move $1,680$ moves

During the first quarter, the Plate Cutting Department used $20,000$ hours $($direct$,$ indirect, and machine hours$)$ to produce the quarter's output. Other quarterly data for the Plate Cutting Department are as follows:

Beginning work in process, January $1$

Units started $90,000$

Direct materials cost $$720,000$

Units, ending work in process $(100\%$

materials; $64\%$ conversion$),$ March $316,000$

Required:

Question Content Area

$1.$ Prepare a physical flow schedule. If an answer is zero, enter $"0".$

blank

McKay, Inc.

Physical flow schedule

Units to account for: blank

Units, beginning WIP

Units, beginning WIP

$0$

Units started

Units started

$90,000$

Total units to account for fill in the blank $05$b$66401$d$05607$b$\_5$

$90,000$

Units accounted for: blank

Units completed

Units completed

$84,000$

Units, ending WIP

Units, ending WIP

$6,000$

Total units accounted for fill in the blank $05$b$66401$d$05607$b$\_10$

$90,000$

Feedback Area

Feedback

$1.$ A physical flow schedule shows the units to account for and what happened to them.

Question Content Area

$2.$ Calculate equivalent units of production for:

Equivalent Units

a$.$ Direct Materials fill in the blank $6$ff$6$cd$07706$e$00$e$\_1$

$90,000$

b$.$ Conversion Costs fill in the blank $6$ff$6$cd$07706$e$00$e$\_2$

$87,840$

$3.$ Calculate unit costs for the following.

a$.$ Direct materials $fill in the blank $6$ff$6$cd$07706$e$00$e$\_3$

$8$

per unit

b$.$ Conversion costs fill in the blank $6$ff$6$cd$07706$e$00$e$\_4$

$12$

per unit

c$.$ Total manufacturing $fill in the blank $6$ff$6$cd$07706$e$00$e$\_5$

$20$

per unit

$4.$ Provide the following information:

a$.$ The total cost of units transferred out

$fill in the blank $6$ff$6$cd$07706$e$00$e$\_6$

$1,680,000$

Question Content Area

b$.$ The journal entry for transferring costs from Plate Cutting to Welding

blank

Work in Process$-$Welding

$1,680,000$

Work in Process$-$Plate Cutting

$1,680,000$

Question Content Area

c$.$ The cost assigned to units in ending inventory.

$fill in the blank bc$935$b$01305$d$02$f$\_1$

$94,080$

Question Content Area

$5.$ Suppose the plant manager asked the following questions:

a$.$ What is the actual cycle time for the conversion cost output for the plate subassembly $($round to four decimal places$)?$

b$.$ What is the conversion cost rate for the first quarter, using total conversion costs and total time $($round to the nearest cent$)?$

c$.$ What is the conversion cost per unit, using duration$-$based costing $($round to the nearest cent$)?$

d$.$ According to production engineering, if efficiency were increased to an ideal level, then the cycle time should be $0\mathrm{.}20$ hours. If this were to occur, what would the cost per plate be$?($round to the nearest cent$)?$