Tavia Limited manufactures a plastic gasket that is used in automobile engines. The gaskets go through Mixing, Forming, and Stamping. The company's accountant (who is very inexperienced) has prepared a costs for the Forming Department for October, as follows: Work in process inventory, October 1 (10,500 units; materials 100% complete; conversion 7/8 complete) Costs transferred in from the Mixing Department Material added during October (added when processing is 50% complete in the Forming Department) Conversion costs added during October Total departmental costs Forming Department costs assigned to: Units completed and transferred to the Stamping Department (120,000 units at $3.81451 each) Work in process inventory, October 31 (5,500 units, conversion 2/5 complete) Total departmental costs assigned $ 45,045* 148,130 56,880 207,686 $457,741 $457,741 $457,741 *Consists of cost transferred in, $16,275; materials cost, $6,720; and conversion costs, $22,050. After mulling over the data above, Tavia's president commented, "I can't understand what's happening he effort at cost reduction, our unit cost actually went up in the Forming Department last month. With that kim bonuses are out of the question for the people in that department." The company uses the weighted-average method in its process costing. Required:
Tavia Limited manufactures a plastic gasket that is used in automobile engines. The gaskets go through Mixing, Forming, and Stamping. The company's accountant (who is very inexperienced) has prepared a costs for the Forming Department for October, as follows: Work in process inventory, October 1 (10,500 units; materials 100% complete; conversion 7/8 complete) Costs transferred in from the Mixing Department Material added during October (added when processing is 50% complete in the Forming Department) Conversion costs added during October Total departmental costs Forming Department costs assigned to: Units completed and transferred to the Stamping Department (120,000 units at $3.81451 each) Work in process inventory, October 31 (5,500 units, conversion 2/5 complete) Total departmental costs assigned $ 45,045* 148,130 56,880 207,686 $457,741 $457,741 $457,741 *Consists of cost transferred in, $16,275; materials cost, $6,720; and conversion costs, $22,050. After mulling over the data above, Tavia's president commented, "I can't understand what's happening he effort at cost reduction, our unit cost actually went up in the Forming Department last month. With that kim bonuses are out of the question for the people in that department." The company uses the weighted-average method in its process costing. Required:
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter10: Accounting Systems For Manufacturing Operations
Section: Chapter Questions
Problem 10.4.2C: Factory overhead rate Fabricator Inc., a specialized equipment manufacturer, uses a job order cost...
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