Miller Outdoor Equipment (MOE) makes four models of tents. The model names are Rookie, Novice, Hiker, and Expert. MOE manufactures the tents in two departments: Stitching and Customizing. All four models are processed initially in Stitching where all material is assembled and sewn into a basic tent. The Rookie model is then transferred to finished goods. After processing in Stitching, the other three models are transferred to Customizing for additional add-ons, and then transferred to finished goods. There were no beginning work-in-process inventories on August 1. Data for August are shown in the following table. Ending work in process is 40 percent complete in Stitching and 45 percent complete in Customizing. Conversion costs are allocated based on the number of equivalent units processed in each department. Total Rookie Novice Hiker Expert Units started 760 490 280 240 Units completed in Stitching 705 430 220 195 Units completed in Customizing 410 190 170 Materials $ 63,660 $ 26,600 $ 16,660 $ 10,080 $ 10,320 Conversion costs: Stitching $ 55,260 Customizing 27,000 Total conversion costs $ 82,260 b. What is the balance of the Work-in-Process Inventory on August 31 for Stitching? For Customizing? Work-in-Process Inventory Stitching $11,052selected answer correct Customizing $6,983

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Miller Outdoor Equipment (MOE) makes four models of tents. The model names are Rookie, Novice, Hiker, and Expert. MOE manufactures the tents in two departments: Stitching and Customizing. All four models are processed initially in Stitching where all material is assembled and sewn into a basic tent. The Rookie model is then transferred to finished goods. After processing in Stitching, the other three models are transferred to Customizing for additional add-ons, and then transferred to finished goods.

There were no beginning work-in-process inventories on August 1. Data for August are shown in the following table. Ending work in process is 40 percent complete in Stitching and 45 percent complete in Customizing. Conversion costs are allocated based on the number of equivalent units processed in each department.

	Total	Rookie	Novice	Hiker	Expert
Units started					760		490		280		240
Units completed in Stitching					705		430		220		195
Units completed in Customizing							410		190		170
Materials	$	63,660		$	26,600	$	16,660	$	10,080	$	10,320
Conversion costs:
Stitching	$	55,260
Customizing		27,000
Total conversion costs	$	82,260