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Tavia Limited manufactures a plastic gasket that is used in automobile engines. The gaskets go through three processing departments: Mixing, Forming, and Stamping. The companys
Tavia Limited manufactures a plastic gasket that is used in automobile engines. The gaskets go through three processing departments: Mixing, Forming, and Stamping. The companys accountant (who is very inexperienced) has prepared a summary of production and costs for the Forming Department for October, as follows: Work in process inventory, October 1 (9,600 units; $ 35,808 * materials 100% complete; conversion 7/8 complete) Costs transferred in from the Mixing Department 122,068 Material added during October (added when processing 48,140 is 50% complete in the Forming Department) Conversion costs added during October 150,464 Total departmental costs $ 356,480 Forming Department costs assigned to: Units completed and transferred to the Stamping $ 356,480 Department (110,000 units at $3.24073 each) Work in process inventory, October 31 (5,000 units, 0 conversion 2/5 complete) Total departmental costs assigned $ 356,480 *Consists of cost transferred in, $13,632; materials cost, $5,760; and conversion costs, $16,416. After mulling over the data above, Tavias president commented, I cant understand whats happening here. Despite a concentrated effort at cost reduction, our unit cost actually went up in the Forming Department last month. With that kind of performance, year-end bonuses are out of the question for the people in that department. The company uses the weighted-average method in its process costing. Required: 1. Calculate the following by preaparing a report for the Forming Department for October. (Round Cost per equivalent unit answers to 2 decimal places.) transferred in materials conversion total equ units of prod 115,000 110,000 112,000 cost/equi unit cost of ending WIP in cost of units comp and trans out
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