Fen Furnishings produces brass handles for the furniture industry in a four-stage process -Mixing, Moulding, Polishing and Packaging. Costs incurred in the Polishing Department during January are summarized as follows: WIP - Polishing Process A/C January 1 Bal. Transfer from Moulding 20,000 1,310,000 Direct Materials Added 391,600 Direct Labour 638,000 307,400 Manufacturing Overhead Normal losses are estimated to be 2%% of input during the period. Inspection takes place during the processing operation, at which point damaged handles are separated from good handles and sold as scrap to local furniture manufacturers at $85 each. At inspection, 2,000 handles were rejected as scrap. These units had reached the following degree of completion: Transfer from Moulding Direct material added 100% 40% Conversion costs 20% Work-in-progress at the end of January was 4,000 handles and had reached the following degree of completion: Transfer from Moulding 100% Direct material added 80% Conversion costs 50% Direct materials added and conversion costs are incurred uniformly throughout the process. Required: (a) Compute the equivalent units and cost per equivalent units for direct materials (From Moulding & Direct materials added) and conversion costs.
Fen Furnishings produces brass handles for the furniture industry in a four-stage process -Mixing, Moulding, Polishing and Packaging. Costs incurred in the Polishing Department during January are summarized as follows: WIP - Polishing Process A/C January 1 Bal. Transfer from Moulding 20,000 1,310,000 Direct Materials Added 391,600 Direct Labour 638,000 307,400 Manufacturing Overhead Normal losses are estimated to be 2%% of input during the period. Inspection takes place during the processing operation, at which point damaged handles are separated from good handles and sold as scrap to local furniture manufacturers at $85 each. At inspection, 2,000 handles were rejected as scrap. These units had reached the following degree of completion: Transfer from Moulding Direct material added 100% 40% Conversion costs 20% Work-in-progress at the end of January was 4,000 handles and had reached the following degree of completion: Transfer from Moulding 100% Direct material added 80% Conversion costs 50% Direct materials added and conversion costs are incurred uniformly throughout the process. Required: (a) Compute the equivalent units and cost per equivalent units for direct materials (From Moulding & Direct materials added) and conversion costs.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Fen Furnishings produces brass handles for the furniture industry in a four-stage process -Mixing, Moulding,
Polishing and Packaging. Costs incurred in the Polishing Department during January are summarized as follows:
WIP - Polishing Process A/C
January 1 Bal.
Transfer from Moulding
20,000
1,310,000
Direct Materials Added
391,600
638,000
Direct Labour
Manufacturing Overhead
307,400
Normal losses are estimated to be 2%% of input during the period. Inspection takes place during the processing
operation, at which point damaged handles are separated from good handles and sold as scrap to local furniture
manufacturers at $85 each.
At inspection, 2,000 handles were rejected as scrap. These units had reached the following degree of completion:
Transfer from Moulding
100%
Direct material added
40%
Conversion costs
20%
Work-in-progress at the end of January was 4,000 handles and had reached the following degree of completion:
Transfer from Moulding
100%
Direct material added
80%
Conversion costs
50%
Direct materials added and conversion costs are incurred uniformly throughout the process.
Required:
(a)
Compute the equivalent units and cost per equivalent units for direct materials (From Moulding &
Direct materials added) and conversion costs.
Transcribed Image Text:a) Statement of Equivalent Units Polishing Process
Units To
Units
Transfer
Direct
Асcount
Accounted
From
Materials
Conversion
For
For
Moulding
Added
Costs
Beginning WIP
Equivalent Units
Calculating Cost Per Equivalent Unit
Transfer from Moulding
Direct Materials Added
Conversion Costs
Total Cost per Completed Unit
I| || || ||
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