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		180% of direct labor		$87,840
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 28,600 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	$900,000
Units, ending work in process (100% materials; 64% conversion), March 31	6,000

Required:

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

Units to account for:	blank
Units, beginning WIPUnits completedUnits, ending WIPUnits, beginning WIP	Units, beginning WIP
Units completedUnits, ending WIPUnits startedUnits started	Units started
Total units to account for	fill in the blank 48e225fc2f9cf9f_5
Units accounted for:	blank
Units, beginning WIPUnits completedUnits startedUnits completed	Units completed
Units, beginning WIPUnits, ending WIPUnits startedUnits, ending WIP	Units, ending WIP
Total units accounted for	fill in the blank 48e225fc2f9cf9f_10

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

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2. Calculate equivalent units of production for:

	Equivalent Units
a. Direct Materials	fill in the blank c0c5c7fd0fe302b_1
b. Conversion Costs	fill in the blank c0c5c7fd0fe302b_2

3. Calculate unit costs for the following. Round your answers to the nearest cent.

a. Direct materials	$fill in the blank c0c5c7fd0fe302b_3	per unit
b. Conversion costs	fill in the blank c0c5c7fd0fe302b_4	per unit
c. Total manufacturing	$fill in the blank c0c5c7fd0fe302b_5	per unit

4. Provide the following information: a. The total cost of units transferred out $fill in the blank c0c5c7fd0fe302b_6

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2. The equivalent units schedule measures the output of the period. A fully completed unit is counted as a unit of output. Output for a unit in ending work in process is counted by its degree of completion.

3. Unit cost = Costs of the period Output of the period

4 a. The cost of goods (services) transferred out is the unit cost multiplied by the units completed. The cost of EWIP is the unit cost multiplied by the equivalent units found in EWIP. The partially completed units and all their associated costs are transferred to the next process (department) by debiting the WIP account of the process (department) receiving the unit and crediting the WIP account of the transferring process (department).

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

blank	CashMaterialsOverheadWork in Process-Plate CuttingWork in Process-Rod CuttingWork in Process-Welding	- Select -
	CashMaterialsOverheadWork in Process-Plate CuttingWork in Process-Rod Cutting		- Select -

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4 b. Unit cost = Costs of the period Output of the period

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c. The cost assigned to units in ending inventory. Round your answers to the nearest cent. $fill in the blank 8da759ff1facfa2_1

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4 c. The cost of goods (services) transferred out is the unit cost multiplied by the units completed. The cost of EWIP is the unit cost multiplied by the equivalent units found in EWIP. The partially completed units and all their associated costs are transferred to the next process (department) by debiting the WIP account of the process (department) receiving the unit and crediting the WIP account of the transferring process (department).

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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)? $fill in the blank 0644e4f4d013035_1 hours per unit

b. What is the conversion cost rate for the first quarter, using total conversion costs and total time (round to the nearest cent)? $fill in the blank 0644e4f4d013035_2 per hour

c. What is the conversion cost per unit, using duration-based costing (round to the nearest cent)? $fill in the blank 0644e4f4d013035_3

d. According to production engineering, if efficiency were increased to an ideal level, then the cycle time should be 0.20 hours. If this were to occur, what would the cost per plate be? (round to the nearest cent)? $fill in the blank 0644e4f4d013035_4

Identify the data analytic types (descriptive, diagnostic, predictive, or prescriptive) that apply to parts a. through d. (see Exhibit 2.5 and Exhibit 2.6 for a review of data analytic metrics). Note: More than one data analytic type might apply.

The first three calculations are

descriptivediagnosticpredictiveprescriptive

in nature. The last calculation has elements of

descriptivediagnosticpredictiveprescriptivedescriptive and diagnosticpredictive and prescriptive

.