Alvis Construction Supply Company has a department that manufactures wood trusses (wood frames used in the construction industry). The following information is for the production of these trusses for the month of February: Work-in-process inventory, February 1 Direct materiale: 100% complete Conversion: 20% complete Units started during February Units completed during February and transferred out Work-in-process inventory, February 29 Direct materials: 100% complete Conversion: 40% complete Costs incurred during February Direct materials Conversion Required Using the FIFO method, calculate the following: 1-a. Cost per EU 1-b. Cost of goods completed and transferred out 1-c. Costs remaining in the WIP Inventory account The weighted average cost per equivalent unit 3,100 trusses 1-a. Costs per equivalent unit. (Round your answers to 4 decimal places.) 1-b. Cost of goods completed and transferred out. (Do no round your intermediate calculations. Round your final answer to the nearest whole dollar.) Direct Materials $ 10,580 $ 15,358 1-c. Costs remaining in the Work-in-Process Inventory account. (Do no round your intermediate calculations. Round your final answer to the nearest whole dollar) Conversion 18,100 trusses 17,100 trusses 2. Assume that you are the company's controller. The production department's February equivalent unit cost is higher than expected. If the manager of the first department asks you to do him a favor by increasing the ending inventory completion percentage from 40 to 60% to lower the unit costs, how much would unit cost be affected by this request? (Round your answer to 4 decimal places.) by $ 59,140 $ 92,192
Alvis Construction Supply Company has a department that manufactures wood trusses (wood frames used in the construction industry). The following information is for the production of these trusses for the month of February: Work-in-process inventory, February 1 Direct materiale: 100% complete Conversion: 20% complete Units started during February Units completed during February and transferred out Work-in-process inventory, February 29 Direct materials: 100% complete Conversion: 40% complete Costs incurred during February Direct materials Conversion Required Using the FIFO method, calculate the following: 1-a. Cost per EU 1-b. Cost of goods completed and transferred out 1-c. Costs remaining in the WIP Inventory account The weighted average cost per equivalent unit 3,100 trusses 1-a. Costs per equivalent unit. (Round your answers to 4 decimal places.) 1-b. Cost of goods completed and transferred out. (Do no round your intermediate calculations. Round your final answer to the nearest whole dollar.) Direct Materials $ 10,580 $ 15,358 1-c. Costs remaining in the Work-in-Process Inventory account. (Do no round your intermediate calculations. Round your final answer to the nearest whole dollar) Conversion 18,100 trusses 17,100 trusses 2. Assume that you are the company's controller. The production department's February equivalent unit cost is higher than expected. If the manager of the first department asks you to do him a favor by increasing the ending inventory completion percentage from 40 to 60% to lower the unit costs, how much would unit cost be affected by this request? (Round your answer to 4 decimal places.) by $ 59,140 $ 92,192
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Alvis Construction Supply Company has a department that manufactures wood trusses (wood frames used in the construction
industry). The following information is for the production of these trusses for the month of February:
Work-in-process inventory, February 1
Direct materiale: 100% complete
Conversion: 20% complete
Units started during February
Units completed during February and transferred out
Work-in-process inventory, February 29
Direct materials: 100% complete
Conversion: 40% complete
Costs incurred during February
Direct materials
Conversion
Required
Using the FIFO method, calculate the following:
1-a. Cost per EU
1-b. Cost of goods completed and transferred out
1-c. Costs remaining in the WIP Inventory account
The weighted-average cost per equivalent unit
3,100 trusses
1-a. Costs per equivalent unit. (Round your answers to 4 decimal places.)
1-b. Cost of goods completed and transferred out. (Do no round your intermediate calculations. Round your final answer to the
nearest whole dollar.)
Direct Materials
$ 10,580
$ 15,358
1-c. Costs remaining in the Work-in-Process Inventory account. (Do no round your intermediate calculations. Round your final answer
to the nearest whole dollar.)
Conversion
18,100 trusses
17,100 trusses
2. Assume that you are the company's controller. The production department's February equivalent unit cost is higher than expected. If
the manager of the first department asks you to do a favor by increasing the ending inventory completion percentage from 40 to
60% to lower the unit costs, how much would unit cost be affected by this request? (Round your answer to 4 decimal places.)
by
$ 59,140
$ 92,192
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