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PART 2 Standard Manufacturers produces steel doors for the furniture industry in a four-stage process Cutting, Moulding, Welding and Assembly. The following data relates to the Welding Department for the month of January during which 20,000 doors valued at $65.50 each were transferred from the Moulding Department to the Welding Department. Other production costs incurred during the month are summarized as follows: Direct Materials Added Direct Manufacturing Wages Manufacturing Overhead $391,600 $638,000 $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 doors are separated from good doors and sold as scrap to local furniture manufacturers at $85 each. At inspection, 2,000 doors were rejected as scrap. These units had reached the following degree of completion: Transfer from Moulding Direct material added Conversion costs 100% 40% 20% Work-in-progress at the end of January was 4,000 doors and had reached the following degree of completion: Transfer from Moulding Direct material added Conversion costs 100% 80% 50% Direct materials added and conversion costs are incurred uniformly throughout the process. Required: (a) (b) Compute the equivalent units and cost per equivalent units for direct materials (From Moulding & Direct materials added) and conversion costs. Compute the: ■ total cost of the doors completed and transferred out of the Assembly Department cost of the unexpected losses " ■ cost of ending work in process inventory in the Welding Department (c) Complete the Work in Process Inventory - Welding Process T-account, clearly showing the ending balance. (d) (e) Prepare the journal entries for the: " ▪ assignment of direct materials, direct labour incurred, and the manufacturing overhead applied to the Welding Process ■ cost of the units completed and transferred out to the Assembly Process Given that 30% of the unexpected losses were because of pilferage, prepare the abnormal loss statement, clearly showing Standard Manufacturers true loss associated with the Welding Department

PART 2 Standard Manufacturers produces steel doors for the furniture industry in a four-stage process Cutting, Moulding, Welding and Assembly. The following data relates to the Welding Department for the month of January during which 20,000 doors valued at $65.50 each were transferred from the Moulding Department to the Welding Department. Other production costs incurred during the month are summarized as follows: Direct Materials Added Direct Manufacturing Wages Manufacturing Overhead $391,600 $638,000 $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 doors are separated from good doors and sold as scrap to local furniture manufacturers at $85 each. At inspection, 2,000 doors were rejected as scrap. These units had reached the following degree of completion: Transfer from Moulding Direct material added Conversion costs 100% 40% 20% Work-in-progress at the end of January was 4,000 doors and had reached the following degree of completion: Transfer from Moulding Direct material added Conversion costs 100% 80% 50% Direct materials added and conversion costs are incurred uniformly throughout the process. Required: (a) (b) Compute the equivalent units and cost per equivalent units for direct materials (From Moulding & Direct materials added) and conversion costs. Compute the: ■ total cost of the doors completed and transferred out of the Assembly Department cost of the unexpected losses " ■ cost of ending work in process inventory in the Welding Department (c) Complete the Work in Process Inventory - Welding Process T-account, clearly showing the ending balance. (d) (e) Prepare the journal entries for the: " ▪ assignment of direct materials, direct labour incurred, and the manufacturing overhead applied to the Welding Process ■ cost of the units completed and transferred out to the Assembly Process Given that 30% of the unexpected losses were because of pilferage, prepare the abnormal loss statement, clearly showing Standard Manufacturers true loss associated with the Welding Department

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter6: Process Costing
Section: Chapter Questions
Problem 24E: Baxter Company has two processing departments: Assembly and Finishing. A predetermined overhead rate...
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PART 2 Standard Manufacturers produces steel doors for the furniture industry in a four-stage process Cutting, Moulding, Welding and Assembly. The following data relates to the Welding Department for the month of January during which 20,000 doors valued at $65.50 each were transferred from the Moulding Department to the Welding Department. Other production costs incurred during the month are summarized as follows: Direct Materials Added Direct Manufacturing Wages Manufacturing Overhead $391,600 $638,000 $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 doors are separated from good doors and sold as scrap to local furniture manufacturers at $85 each. At inspection, 2,000 doors were rejected as scrap. These units had reached the following degree of completion: Transfer from Moulding Direct material added Conversion costs 100% 40% 20% Work-in-progress at the end of January was 4,000 doors and had reached the following degree of completion: Transfer from Moulding Direct material added Conversion costs 100% 80% 50% Direct materials added and conversion costs are incurred uniformly throughout the process. Required: (a) (b) Compute the equivalent units and cost per equivalent units for direct materials (From Moulding & Direct materials added) and conversion costs. Compute the: ■ total cost of the doors completed and transferred out of the Assembly Department cost of the unexpected losses " ■ cost of ending work in process inventory in the Welding Department (c) Complete the Work in Process Inventory - Welding Process T-account, clearly showing the ending balance. (d) (e) Prepare the journal entries for the: " ▪ assignment of direct materials, direct labour incurred, and the manufacturing overhead applied to the Welding Process ■ cost of the units completed and transferred out to the Assembly Process Given that 30% of the unexpected losses were because of pilferage, prepare the abnormal loss statement, clearly showing Standard Manufacturers true loss associated with the Welding Department
Transcribed Image Text:PART 2 Standard Manufacturers produces steel doors for the furniture industry in a four-stage process Cutting, Moulding, Welding and Assembly. The following data relates to the Welding Department for the month of January during which 20,000 doors valued at $65.50 each were transferred from the Moulding Department to the Welding Department. Other production costs incurred during the month are summarized as follows: Direct Materials Added Direct Manufacturing Wages Manufacturing Overhead $391,600 $638,000 $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 doors are separated from good doors and sold as scrap to local furniture manufacturers at $85 each. At inspection, 2,000 doors were rejected as scrap. These units had reached the following degree of completion: Transfer from Moulding Direct material added Conversion costs 100% 40% 20% Work-in-progress at the end of January was 4,000 doors and had reached the following degree of completion: Transfer from Moulding Direct material added Conversion costs 100% 80% 50% Direct materials added and conversion costs are incurred uniformly throughout the process. Required: (a) (b) Compute the equivalent units and cost per equivalent units for direct materials (From Moulding & Direct materials added) and conversion costs. Compute the: ■ total cost of the doors completed and transferred out of the Assembly Department cost of the unexpected losses " ■ cost of ending work in process inventory in the Welding Department (c) Complete the Work in Process Inventory - Welding Process T-account, clearly showing the ending balance. (d) (e) Prepare the journal entries for the: " ▪ assignment of direct materials, direct labour incurred, and the manufacturing overhead applied to the Welding Process ■ cost of the units completed and transferred out to the Assembly Process Given that 30% of the unexpected losses were because of pilferage, prepare the abnormal loss statement, clearly showing Standard Manufacturers true loss associated with the Welding Department
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