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Father Vidal Clock Shop
Father Vidal Clock Shop manufactures clocks on a highly automated assembly line. Its costing system utilizes two cost categories; direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Weighted-average costing is used by Father Vidal Clock Shop.
Data for the Assembly Department for June 19x1 are: Work in Process units: Beginning 250 50.00% complete for conversion costs Started in the month 800 Work in Process units: Ending 150 75.00% complete for conversion costs
Costs for June 19x1: Work in Process units: Beginning Cost of materials $ 18, Conversion costs $ 27, Total for work in process $ 45, Materials added in the month $ 100, Conversion costs incurred in the month $ 100, Total $ 245,
Questions 1 What are the equivalent units for direct materials and conversion costs, respectively? 2 What is the total amount debited to the work-in-process account DURING the month of June? 3 What is the direct materials cost per equivalent unit DURING June? 4 What is the conversion cost per equivalent unit in June? 5 What amount of conversion costs are assigned to ending work-in-process for June? 6 Answer questions 1 - 6 assuming the company uses the FIFO method.
Father Vidal Clock Shop Solution Weighted-average method Step 1: Flow of production Summarize Direct Conversion Units Physical Units Materials Costs Beginning work in process 50% 250 Started during current period 800 To account for 1, l1 Total Completed and transferred out 900 900 900 l2 Work in process, ending 75% 150 150 113 Accounted for 1, l3 Q1 Work done to date 1,050 1,
Direct Conversion Costs Totals Materials Costs Work in process beginning $ 45,000 $ 18,000 $ 27, Q2 Added during current period $200,000 $ 100,000 $ 100, (Step 3) Total costs to account for $245,000 $118,000 $127,
Divide by equivalent units in l3 ÷ 1,050 1,
l4 (Step 4) Equivalent unit costs $237.81 ‹ $112.38 + $125. Q3, Q (Step 5) Application of costs
[l1xl4] Completed and transferred out $214,032 ‹ 900 × $237.
[l2xl4] Work in process, ending 150 113
× $ 112.38 × $125.
Q5 $30,968 ‹ $16,857 + $14,
Total costs to account for $245,
FIFO Method Step 1: Step 2: Equivalent units Units Flow of production Summarize Direct Conversion Physical Units Materials Costs Completed and transferred out during current period l5 From beginning inventory 50% 250 125 l6 Started and completed 650 650 650 l7 Work in process, ending 75% 150 150 113 Accounted for 1, l8 Work done in current period only 800 888
Direct Conversion Costs Totals Materials Costs (Step 3) Added during current period $200,000 $100,000 $100,
Divide by equivalent units in l8 ÷ 800 888
l9 (Step 4) Equivalent unit costs $237.68 ‹ $125.00 + $112.
(Step 5) Assignment of costs Completed and transferred out Work in process beginning $45,000 given l5 0 125
l9 × $125.00 × $112.
[l5xl9] Added during current period $14,085 ‹ $0 = $14, Total for beginning inventory $59,
[l6xl9] Started and completed $154,489 ‹ 650 × $237.
Total costs transferred out $213, l7 150 113
l9 × $125.00 × $112.
[l7xl9] Work in process, ending $31,426 ‹ $18,750 + $12, Total costs to account for $245,
Plastic Molding, Inc. Solution Weighted-average method Step 1: Flow of production Summarize Direct Conversion Units Physical Units Materials Costs Beginning work in process 40% 400 Started during current period 1, To account for 1, l1 Total Completed and transferred out 1,400 1,400 1, l2 Work in process, ending 0% 200 200 0 Accounted for 1, l3 Q1 Work done to date 1,600 1,
Direct Conversion Costs Totals Materials Costs Work in process beginning $ 40,000 $ 20,000 $ 20, Q2 Added during current period $450,000 $ 200,000 $ 250, (Step 3) Total costs to account for $490,000 $220,000 $270,
Divide by equivalent units in l3 ÷ 1,600 1,
l4 (Step 4) Equivalent unit costs $330.36 ‹ $137.50 + $192. Q3, Q (Step 5) Application of costs
[l1xl4] Completed and transferred out $462,500 ‹ 1,400 × $330.
[l2xl4] Work in process, ending 200 0
× $ 137.50 × $192.
Q5 $27,500 ‹ $27,500 + $
Total costs to account for $490,
FIFO Method Step 1: Step 2: Equivalent units Units Flow of production Summarize Direct Conversion Physical Units Materials Costs Completed and transferred out during current period l5 From beginning inventory 40% 400 240 l6 Started and completed 1,000 1,000 1, l7 Work in process, ending 0% 200 200 0 Accounted for 1, l8 Work done in current period only 1,200 1,
Direct Conversion Costs Totals Materials Costs (Step 3) Added during current period $450,000 $200,000 $250,
Divide by equivalent units in l8 ÷ 1,200 1,
l9 (Step 4) Equivalent unit costs $368.28 ‹ $166.67 + $201.
(Step 5) Assignment of costs Completed and transferred out Work in process beginning $40,000 given l5 0 240
l9 × $166.67 × $201.
[l5xl9] Added during current period $48,387 ‹ $0 = $48, Total for beginning inventory $88,
[l6xl9] Started and completed $368,280 ‹ 1,000 × $368.
Total costs transferred out $456, l7 200 0
l9 × $166.67 × $201.
[l7xl9] Work in process, ending $33,333 ‹ $33,333 + $ Total costs to account for $490,
