Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Thats all the information the question provided. Cook's Linen Company (CLC) manufactures designer bed linen. The company prints specially designed photographic images on quality cotton

image text in transcribed

Thats all the information the question provided.

Cook's Linen Company (CLC) manufactures designer bed linen. The company prints specially designed photographic images on quality cotton that is then manufactured into duvets. Large parts of the manufacturing process are automated. The company's production processes are split into two separate departments. The printing Department is fully automated and uses fabric cutting machines to pre-cut the fabric to the required size at the 10% point in the process) and printing machines to apply photographic patterns to the fabric, Ink is added to the printing machines at the 30% point in the process. These patterned fabric pieces are then transferred to the Assembly Department. In the Assembly Department, the duvet backing is pre-cur from fabric using another cutting machine at the 5% point in the process), and a machinists then construct the duvet from the printed and un-printed Labric pieces. At the 95% point in the process the Assembly Department packages the finished duvets for transfer to the distribution warehouse. In both departments conversion costs are added evenly through-out the production process. Currently, there are two quality inspections performed. In the Printing Department, the cotton is inspected after it has been cut and prior to adding the material to the printing machine at the 25% point in the production process). The purpose of this inspection is to identify any haws in the material that can cause the printing machine to jam. The second quality inspection is in the Assembly Department, where the finished duvets are inspected just prior to packaging (at the 90% point in the inspection process). The General Manager is concerned that currently there is a high level of spoilage being generated in the Assembly Department with normal spoilage of 10% of good units passing inspection during the month. In contrast, the level of normal sporlage in the Printing Department is only 1% of the good units passing inspection during the month. However, the Assembly Department manager has identified that a significant portion of the spoilage in that department relates lo llaws with the printed design applied by the Printing Department Spoilage identified in the Printing Department is has no scrap value and the cost of disposal is included in the overhead costs. Spoilage identified in the Assembly Department is sold as scrap to a linen clearance outlet that pays $10 per physical unit of spoilage. At the start of September 2019 the Printing Department had 200 partially finished units that were 30% complete. During the month 4.400 units were started, ending work-in-process was 250 units, 60% complete. The total spoilage for the month was 50 units. The costs for the Printing department are collated below: Costs Printing Department Opening work in process: Fabric Ink S10.000 $4.000 S25,800 Overheads Costs added during September: Fabric Ink Overheads S224.400 $85,800 S88,1600 The Assembly Department had 300 units 75% complete at the start of the September. During the month 4.100 good units were completed and transferred to finished goods, and closing work in progress was 20 units, 30% complete. A summary of the costs in the Assembly Department has been provided below: Costs Assembly Department 28.650 6.000 $5,0000 $4.000 Opening work in process: Transferred-In Costs Fabric Direct labour Overhead Costs Costs added during September Transferred-In Costs Fabric Packareine Direct lahur Overhead Costs $85,570 $8,000 $95.000 $75,000 Required: Taking the role of the management accountant for the company ) Prepare the process cost reports for the two departments using the weighted average method Include details of the total cost per good unit completed and transferred out for the two departments in your process cost reports. Assume all completed units from the Printing Department were transferred directly to the Assembly Department during September Cook's Linen Company (CLC) manufactures designer bed linen. The company prints specially designed photographic images on quality cotton that is then manufactured into duvets. Large parts of the manufacturing process are automated. The company's production processes are split into two separate departments. The printing Department is fully automated and uses fabric cutting machines to pre-cut the fabric to the required size at the 10% point in the process) and printing machines to apply photographic patterns to the fabric, Ink is added to the printing machines at the 30% point in the process. These patterned fabric pieces are then transferred to the Assembly Department. In the Assembly Department, the duvet backing is pre-cur from fabric using another cutting machine at the 5% point in the process), and a machinists then construct the duvet from the printed and un-printed Labric pieces. At the 95% point in the process the Assembly Department packages the finished duvets for transfer to the distribution warehouse. In both departments conversion costs are added evenly through-out the production process. Currently, there are two quality inspections performed. In the Printing Department, the cotton is inspected after it has been cut and prior to adding the material to the printing machine at the 25% point in the production process). The purpose of this inspection is to identify any haws in the material that can cause the printing machine to jam. The second quality inspection is in the Assembly Department, where the finished duvets are inspected just prior to packaging (at the 90% point in the inspection process). The General Manager is concerned that currently there is a high level of spoilage being generated in the Assembly Department with normal spoilage of 10% of good units passing inspection during the month. In contrast, the level of normal sporlage in the Printing Department is only 1% of the good units passing inspection during the month. However, the Assembly Department manager has identified that a significant portion of the spoilage in that department relates lo llaws with the printed design applied by the Printing Department Spoilage identified in the Printing Department is has no scrap value and the cost of disposal is included in the overhead costs. Spoilage identified in the Assembly Department is sold as scrap to a linen clearance outlet that pays $10 per physical unit of spoilage. At the start of September 2019 the Printing Department had 200 partially finished units that were 30% complete. During the month 4.400 units were started, ending work-in-process was 250 units, 60% complete. The total spoilage for the month was 50 units. The costs for the Printing department are collated below: Costs Printing Department Opening work in process: Fabric Ink S10.000 $4.000 S25,800 Overheads Costs added during September: Fabric Ink Overheads S224.400 $85,800 S88,1600 The Assembly Department had 300 units 75% complete at the start of the September. During the month 4.100 good units were completed and transferred to finished goods, and closing work in progress was 20 units, 30% complete. A summary of the costs in the Assembly Department has been provided below: Costs Assembly Department 28.650 6.000 $5,0000 $4.000 Opening work in process: Transferred-In Costs Fabric Direct labour Overhead Costs Costs added during September Transferred-In Costs Fabric Packareine Direct lahur Overhead Costs $85,570 $8,000 $95.000 $75,000 Required: Taking the role of the management accountant for the company ) Prepare the process cost reports for the two departments using the weighted average method Include details of the total cost per good unit completed and transferred out for the two departments in your process cost reports. Assume all completed units from the Printing Department were transferred directly to the Assembly Department during September

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

GAO Financial Audit Manual Volume 3 June 2018

Authors: United States Government GAO

2018 Edition

979-8733166001

More Books

Students also viewed these Accounting questions