Question
Swasey Fabrication, Inc., manufactures frames for bicycles. Each frame passes through three processes: Cutting, Welding, and Painting. In September, the Cutting Department of the Tulsa,
Swasey Fabrication, Inc., manufactures frames for bicycles. Each frame passes through three processes: Cutting, Welding, and Painting. In September, the Cutting Department of the Tulsa, Oklahoma, plant reported the following data:
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In Cutting, all direct materials are added at the beginning of the process.
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Beginning work in process consisted of 40,500 units, 20 percent complete with respect to direct labor and overhead. Costs in beginning inventory included direct materials, $1,215,000; direct labor, $222,600; and applied overhead, $150,000.
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Costs added to production during the month were direct materials, $2,565,000; direct labor, $3,471,150. Overhead was assigned using the following information:
Activity Rate Actual Driver Usage Inspection $150 per inspection hour 4,000 inspection hours Maintenance $750 per maintenance hour 1,600 maintenance hours Receiving $300 per receiving order 2,000 receiving orders -
At the end of the month, 121,500 units were transferred out to Welding, leaving 13,500 units in ending work in process, or 25 percent complete.
Required:
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Prepare a physical flow schedule.
AnswerCheck Figures: Total units accounted for = 135,000
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Calculate equivalent units of production for direct materials and conversion costs.
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Compute unit cost under weighted average.
AnswerCheck Figures: Conversion cost = $5,871,150
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Calculate the cost of goods transferred to Welding at the end of the month. Calculate the cost of ending inventory.
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Prepare the journal entry that transfers the goods from Cutting to Welding.
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