Berrian Company manufactures car seats in its Tulsa plant. Each car seat passes through the assembly department and the testing department. This problem focuses on the assembly department. Data for the assembly department for October 2017 are as follows: Read the requirements3. Requirement 1. For each cost category, compute equivalent units in the assembly department. Show physical units in the first column of your schedule. Equivalent Units Physical Direct Conversion Flow of Production Units Materials Costs Work in process beginning Started during current period To account for Completed and transferred out during current period Work in process, ending Accounted for Work done to date Requirement 2. What issues should the manager focus on when reviewing the equivalent-unit calculations? To show better performance, a department supervisor might report a (1) degree of completion resulting in (2) cost per equivalent unit and (3) operating income. In other words, estimates of degree of completion can help (4) (5) managers should ask supervisors specific questions about the process they followed. Top management should always emphasize (6) This emphasis drives (7) throughout the organization. Requirement 3. For each cost category, summarize total assembly department costs for October 2017 and calculate the cost per equivalent unit. Begin by summarizing the total assembly department costs for October 2017. Total Direct Conversion Production Costs Materials Costs (8) (9) Total costs to account for Now calculate the cost per equivalent unit for each cost category. Direct Conversion Materials Costs (10) Divide by (11) Cost per equivalent unit Requirement 4. Assign costs to units completed and transferred out and to units in ending work in process. Total Direct Conversion Production Costs Materials Costs Completed and transferred out Work in process, ending Total costs accounted for 1: More Info The process-costing system at Berrian Company has a single direct-cost category (direct materials) and a single indirect-cost category (conversion costs). Direct materials are added at the beginning of the process. Conversion costs are added evenly during the process. When the assembly department finishes work on each car seat, it is immediately transferred to testing. Berrian Company uses the weighted-average method of process costing. 2: Data Table Physical Units Direct Conversion (Car Seats) Materials Costs Work in process, October 1a 5,100 $1,489,200 $684,675 Started during October 2017 19,500 Completed during October 2017 22,500 Work in process, October 31b 2,100 Total costs added during October 2017 $4,095,000 $1,891,350 aDegree of completion: direct materials, ?%; conversion costs, 60%. bDegree of completion: direct materials, ?%; conversion costs, 75%. 3: Requirements 1. For each cost category, compute equivalent units in the assembly department. Show physical units in the first column of your schedule. 2. What issues should the manager focus on when reviewing the equivalent-unit calculations? 3. For each cost category, summarize total assembly department costs for October 2017 and calculate the cost per equivalent unit. 4. Assign costs to units completed and transferred out and to units in ending work in process.

Berrian Company manufactures car seats in its Tulsa plant. Each car seat passes through the assembly department and the testing department. This problem focuses on the assembly department. Data for the assembly department for October 2017 are as follows: Read the requirements3. Requirement 1. For each cost category, compute equivalent units in the assembly department. Show physical units in the first column of your schedule. Equivalent Units Physical Direct Conversion Flow of Production Units Materials Costs Work in process beginning Started during current period To account for Completed and transferred out during current period Work in process, ending Accounted for Work done to date Requirement 2. What issues should the manager focus on when reviewing the equivalent-unit calculations? To show better performance, a department supervisor might report a (1) degree of completion resulting in (2) cost per equivalent unit and (3) operating income. In other words, estimates of degree of completion can help (4) (5) managers should ask supervisors specific questions about the process they followed. Top management should always emphasize (6) This emphasis drives (7) throughout the organization. Requirement 3. For each cost category, summarize total assembly department costs for October 2017 and calculate the cost per equivalent unit. Begin by summarizing the total assembly department costs for October 2017. Total Direct Conversion Production Costs Materials Costs (8) (9) Total costs to account for Now calculate the cost per equivalent unit for each cost category. Direct Conversion Materials Costs (10) Divide by (11) Cost per equivalent unit Requirement 4. Assign costs to units completed and transferred out and to units in ending work in process. Total Direct Conversion Production Costs Materials Costs Completed and transferred out Work in process, ending Total costs accounted for 1: More Info The process-costing system at Berrian Company has a single direct-cost category (direct materials) and a single indirect-cost category (conversion costs). Direct materials are added at the beginning of the process. Conversion costs are added evenly during the process. When the assembly department finishes work on each car seat, it is immediately transferred to testing. Berrian Company uses the weighted-average method of process costing. 2: Data Table Physical Units Direct Conversion (Car Seats) Materials Costs Work in process, October 1a 5,100 $1,489,200 $684,675 Started during October 2017 19,500 Completed during October 2017 22,500 Work in process, October 31b 2,100 Total costs added during October 2017 $4,095,000 $1,891,350 aDegree of completion: direct materials, ?%; conversion costs, 60%. bDegree of completion: direct materials, ?%; conversion costs, 75%. 3: Requirements 1. For each cost category, compute equivalent units in the assembly department. Show physical units in the first column of your schedule. 2. What issues should the manager focus on when reviewing the equivalent-unit calculations? 3. For each cost category, summarize total assembly department costs for October 2017 and calculate the cost per equivalent unit. 4. Assign costs to units completed and transferred out and to units in ending work in process.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter6: Process Costing

Section: Chapter Questions

Problem 65P: Seacrest Company uses a process-costing system. The company manufactures a product that is processed...

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Berrian Company manufactures car seats in its Tulsa plant. Each car seat passes through the assembly department and the testing department. This problem focuses on the assembly department.

Data for the assembly department for October

2017

are as follows:

Read the requirements3.

Requirement 1. For each cost category, compute equivalent units in the assembly department. Show physical units in the first column of your schedule.

		Equivalent Units
	Physical	Direct	Conversion
Flow of Production	Units	Materials	Costs
Work in process beginning
Started during current period
To account for
Completed and transferred out during current period
Work in process, ending
Accounted for
Work done to date

Requirement 2. What issues should the manager focus on when reviewing the equivalent-unit calculations?

To show better performance, a department supervisor might report a

(1)

degree of completion resulting in

(2)

cost per equivalent unit and

(3)

operating income. In other words, estimates of degree of completion can help

(4)

(5)

managers should ask supervisors specific questions about the process they followed. Top management should always emphasize

(6)

This emphasis drives

(7)

throughout the organization.

Requirement 3. For each cost category, summarize total assembly department costs for October

2017

and calculate the cost per equivalent unit.

Begin by summarizing the total assembly department costs for October

2017.

	Total	Direct	Conversion
	Production Costs	Materials	Costs
(8)
(9)
Total costs to account for

Now calculate the cost per equivalent unit for each cost category.

		Direct	Conversion
		Materials	Costs
(10)
Divide by	(11)
Cost per equivalent unit

Requirement 4. Assign costs to units completed and transferred out and to units in ending work in process.

	Total	Direct	Conversion
	Production Costs	Materials	Costs
Completed and transferred out
Work in process, ending
Total costs accounted for

1: More Info

The process-costing system at Berrian Company has a single direct-cost category (direct materials) and a single indirect-cost category (conversion costs). Direct materials are added at the beginning of the process. Conversion costs are added evenly during the process. When the assembly department finishes work on each car seat, it is immediately transferred to testing. Berrian Company uses the weighted-average method of process costing.

2: Data Table

	Physical Units	Direct	Conversion
	(Car Seats)	Materials	Costs

Work in process, October 1a	5,100	$1,489,200	$684,675
Started during October 2017	19,500
Completed during October 2017	22,500
Work in process, October 31b	2,100
Total costs added during October 2017		$4,095,000	$1,891,350

aDegree of completion: direct materials, ?%; conversion costs, 60%.

bDegree of completion: direct materials, ?%; conversion costs, 75%.

3: Requirements

1.	For each cost category, compute equivalent units in the assembly department. Show physical units in the first column of your schedule.
2.	What issues should the manager focus on when reviewing the equivalent-unit calculations?
3.	For each cost category, summarize total assembly department costs for October 2017 and calculate the cost per equivalent unit.
4.	Assign costs to units completed and transferred out and to units in ending work in process.

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