Weighted Average Method, Physical Flow, Equivalent Units, Unit Costs, Cost Assignment, ABC

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:

1. In Cutting, all direct materials are added at the beginning of the process.
2. Beginning work in process consisted of 41,500 units, 20 percent complete with respect to direct labor and overhead. Costs in beginning inventory included direct materials, $1,205,000; direct labor, $222,800; and applied overhead, $150,000.
3. Costs added to production during the month were direct materials, $2,434,600; direct labor, $3,457,200. 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

4. At the end of the month, 121,200 units were transferred out to Welding, leaving 13,600 units in ending work in process, or 25 percent complete.

Required:

1. Prepare a physical flow schedule.

Swasey Fabrication, Inc. Physical Flow Schedule

Units to account for:
Units, beginning work in processUnits completed and transferred outUnits, ending work in processUnits, beginning work in process	Units, beginning work in process
Units completed and transferred outUnits, ending work in processUnits started (transferred in)Units started (transferred in)	Units started (transferred in)
Total units to account for	fill in the blank 08dc39050fe305d_5
Units accounted for:
Units, beginning work in processUnits completed and transferred outUnits started (transferred in)Units completed and transferred out	Units completed and transferred out
Units, beginning work in processUnits, ending work in processUnits started (transferred in)Units, ending work in process	Units, ending work in process
Total units accounted for	fill in the blank 08dc39050fe305d_10

Feedback

1. The physical flow schedule traces the units in process regardless of their stage of completion and provides the information needed for preparing the equivalent units schedule.

2. Calculate equivalent units of production for direct materials and conversion costs.

	Equivalent Units
Direct Materials
Conversion Costs

3. Compute unit cost under weighted average.

Unit direct materials cost
Unit conversion costs
Total unit cost

4. Calculate the cost of goods transferred to Welding at the end of the month. Calculate the cost of ending inventory.

Cost of goods transferred out
Ending WIP