Chapter 3, Problem 3.7AP

Determine equivalent units and unit costs and assign costs for processes; prepare production cost report. (LO 5), AP

*P3-7A Owen Company manufactures bicycles and tricycles. For both products, materials are added at the beginning of the production process, and conversion costs are incurred uniformly. Owen Company uses the FIFO method to compute equivalent units. Produc­tion and cost data for the month of March are as follows.

Production Data—Bicycles				Units				Percentage Complete
Work in process units, March 1				200				80%
Units started into production				1,000
Work in process units, March 31				300				40%
Cost Data—Bicycles
Work in process. March 1		$19,280
Direct materials		50,000
Direct labor		25,900
Manufacturing overhead		30,000
Production Data—Tricycles			Units			Percentage Complete
Work in process units, March 1			100			75%
Units started into production			1,000
Work in process units, March 31			60			25%
Cost Data—Tricycles
Work in process. March 1	$6,125
Direct materials	30,000
Direct labor	14,300
Manufacturing overhead	20,000

Instructions

(a) Calculate the following for both the bicycles and the tricycles.

(1) The equivalent units of production for materials and conversion costs

(2) The unit costs of production for materials and conversion costs.

(3) The assignment of costs to units transferred out and in process at the end of the accounting period.

(b) Prepare a production cost report for the month of March for the bicycles only.

(a) Bicycles;

(1) Materials 1,000

(2) Materials $50

(3) Transferred

out $102,380

W1P $22,800