Problem 3

Jules Fashions has three departments: Cutting, Sewing and Finishing. Direct materials are added at the of the beginning of the Cutting process (lumber) and at the end of the Finishing process (packaging). Conversion costs are added evenly throughout each process. The company uses the weighted-average method. Data from the month of January for the Cutting Department are:

Yard of fabric

Beginning work-in-process inventory 50,000 yards

Started in production 100,000 yards

Completed and transferred to the Packaging Department 120,000 yards

Ending work-in-process inventory (79% completed) 30,000 yards

Costs

Beginning work-in-process inventory:

Direct materials $ 45,000

Direct labor $ 20,000

Manufacturing overhead allocated 4,960

Costs added during March:

Direct materials $90,000

Direct labor 60,000

Manufacturing overhead allocated 30,000

Total costs added during January $180,000

Required:

1. Compute the Cutting Department's equivalent units of production for direct materials and for conversion costs
2. Compute the total costs of the units (yards).
   1. Completed and transferred out to the Sewing Department
   2. In the Cutting Department ending Work-in-Process Inventory