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 $391,600 Direct Manufacturing Wages $638,000 Manufacturing Overhead $307,400 Normal losses are estimated to be 2½% 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 100% Direct material added 40% Conversion costs 20% Work-in-progress at the end of January was 4,000 doors 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: 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 Complete the Work in Process Inventory – Welding Process T-account, clearly showing the ending balance. 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 s statement, clearly showing Standard Manufacturers true loss associated with the Welding Department
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 $391,600
Direct Manufacturing Wages $638,000
Manufacturing
Normal losses are estimated to be 2½% 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 100%
Direct material added 40%
Conversion costs 20%
Work-in-progress at the end of January was 4,000 doors 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:
- 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
- Complete the Work in Process Inventory – Welding Process T-account, clearly showing the ending balance.
- 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 s statement, clearly showing Standard Manufacturers true loss associated with the Welding
- assignment of direct materials, direct labour incurred, and the manufacturing overhead applied to the Welding
Department
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