Requirement 1. Summarize total assembly department costs for April 2017 and assign total costs to units completed (and transferred out, and to units in ending work in process Begin by calculating the physical units and equivalent units. Equivalent Units Physical Direct Conversion Flow of Production Units Materials Costs Work in process, beginning Started during current period To account for Completed and transferred out during current period Work in process, ending Accounted for Equivalent units of work done to date Now summarize the total costs to account for Total Production Costs Direct Materials Conversion Costs (1) (2) Total costs to account for Next calculate cost per equivalent unit for direct materials and conversion costs. Direct Materials Conversion Costs (3) Divide by (4) Cost per equivalent unit Finally assign total costs to units completed (and transferred out) and to units in ending work in process Total Direct Conversion Production Costs Materials Costs Completed and transferred out Work in process, ending Total costs accounted for Requirement 2. What issues should a manager focus on when reviewing the equivalent units calculation? To show better performance, a department supervisor might report a (5). degree of completion resulting in (6) and (7) operating income. In other words, estimates of degree of completion can help (8) 19) supervisors specific questions about the process they followed Top management should always emphasize (10) throughout the organization cost per equivalent unit managers should ask This emphasis drives (11) 1: Data Table Physical Units Direct Conversion (Frames) Materials Costs Work in process, April 1a 60 $1,530 $156 Started during April 2017 510 Completed during April 2017 450 Work in process, April 300 120 Total costs added during April 2017 $17.850 S11,544 Degree of completion direct materials, 100% conversion costs, 40% Degree of completion direct materials, 100%, conversion costs 15% 2: Requirements 1. Summarize total assembly department costs for April 2017, and assign them to units completed (and transferred out) and to units in ending work in process 2. What issues should a manager focus on when reviewing the equivalent units calculation? (1) Equivalent units of work done to date Completed and transferred out Work in process, beginning Costs added in current period o Work in process, ending Costs incurred to date Equivalent units of work done to date Completed and transferred out Work in process, beginning Costs added in current period o Work in process, ending Costs incurred to date Equivalent units of work done to date Completed and transferred out Work in process, beginning Costs added in current period o Work in process, ending Costs incurred to date (2) OOOO (3 OOOO (4) (6) O overstated understated 0 000 Equivalent units of work done to date (5) higher Completed and transferred out Work in process, beginning lower Costs added in current period Work in process, ending Costs incurred to date overstated (8) controlling the production cost understated increase the produciton efficiency resulting in less waste to smooth earnings from one period to the next () (7) OO (9) To encourage cost savings, To encourage increased productivity To guard against the possibility of bias (10) obtaining the correct answer, regardless of how it affects reported performance achieving the highest reported performance regardless of the method used (11) O ethical actions O teamwork
