Reconditioning Service; Weighted-Average Method Golf World, Inc. (GWI) sells productsand services for the sport of golf. One of its key business units specializes in the repair and reconditioning of golf carts. GWI enters into contracts with a number of golf clubs throughout the U.S. inwhich the clubs send their carts to GWI for a complete reconditioning: motor, frame repair where necessary, and replacement of seat covers and canvas tops. The clubs usually will cycle 10–15% of theircarts through this process each year. Because GWI’s business has been growing steadily, it is veryimportant to complete the reconditioning of the carts within a budgeted time and cost. The firm usesweighted-average process costing to keep track of the costs incurred in the reconditioning process.GWI’s golf cart repair and reconditioning unit has the following information for the month ofNovember, in which 1,200 carts were started for reconditioning:[LO 6-2, 6-3, 6-4]Number of UnitsWork-in-Process, July 1, 50% complete for conversion costs 4,000Transferred in during July 28,000Completed during July 27,000Work-in-Process, July 31, 50% complete for conversion costs 5,000CostsWork-in-Process, July 1 (transferred-in costs, $50,000;conversion costs, $30,125)$ 80,125Transferred in from assembly department during July 150,000Direct materials added during July 60,750Conversion added during July 110,000Total to account for $400,875Beginning WIP: 150 units, 50% complete for materials ($16,600) and 30% complete forconversion ($20,150)Current costs:Direct Materials: $200,000Conversion: $385,000 (conversion costs for GWI usually average about $250 to $320 per unit,based on an average of 1,000–1,300 units completed each month)Ending WIP: 300 units, 30% complete for direct materials and 20% complete for conversionWork-in-Process Inventory, February 1 4,000 trussesDirect materials: 100% complete $10,480Conversion: 20% complete $15,258Units started during February 18,000 trussesUnits completed during February and transferred out 17,000 trussesWork-in-Process Inventory, February 29Direct materials: 100% completeConversion cost: 40% completeCosts incurred during FebruaryDirect materials $ 59,040Conversion $ 92,092Required1. Complete the production cost report for the month of November.2. GWI is scheduled to start another batch of 1,500 carts for reconditioning in December. Comment on theinformation the cost report contains regarding planning for December’s work
Reconditioning Service; Weighted-Average Method Golf World, Inc. (GWI) sells products
and services for the sport of golf. One of its key business units specializes in the repair and reconditioning of golf carts. GWI enters into contracts with a number of golf clubs throughout the U.S. in
which the clubs send their carts to GWI for a complete reconditioning: motor, frame repair where necessary, and replacement of seat covers and canvas tops. The clubs usually will cycle 10–15% of their
carts through this process each year. Because GWI’s business has been growing steadily, it is very
important to complete the reconditioning of the carts within a budgeted time and cost. The firm uses
weighted-average
GWI’s golf cart repair and reconditioning unit has the following information for the month of
November, in which 1,200 carts were started for reconditioning:
[LO 6-2, 6-3, 6-4]
Number of Units
Work-in-Process, July 1, 50% complete for conversion costs 4,000
Transferred in during July 28,000
Completed during July 27,000
Work-in-Process, July 31, 50% complete for conversion costs 5,000
Costs
Work-in-Process, July 1 (transferred-in costs, $50,000;
conversion costs, $30,125)
$ 80,125
Transferred in from assembly department during July 150,000
Direct materials added during July 60,750
Conversion added during July 110,000
Total to account for $400,875
Beginning WIP: 150 units, 50% complete for materials ($16,600) and 30% complete for
conversion ($20,150)
Current costs:
Direct Materials: $200,000
Conversion: $385,000 (conversion costs for GWI usually average about $250 to $320 per unit,
based on an average of 1,000–1,300 units completed each month)
Ending WIP: 300 units, 30% complete for direct materials and 20% complete for conversion
Work-in-Process Inventory, February 1 4,000 trusses
Direct materials: 100% complete $10,480
Conversion: 20% complete $15,258
Units started during February 18,000 trusses
Units completed during February and transferred out 17,000 trusses
Work-in-Process Inventory, February 29
Direct materials: 100% complete
Conversion cost: 40% complete
Costs incurred during February
Direct materials $ 59,040
Conversion $ 92,092
Required
1. Complete the production cost report for the month of November.
2. GWI is scheduled to start another batch of 1,500 carts for reconditioning in December. Comment on the
information the cost report contains regarding planning for December’s work
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