Question

Thakin Industries Inc. manufactures dorm furniture in separate processes. In each process, materials are entered at the beginning, and conversion costs are incurred uniformly. Production and cost data for the first process in making a product are as follows.

		Cutting Department
Production Data—July		T12-Tables
Work in process units, July 1		0
Units started into production		22,400
Work in process units, July 31		3,360
Work in process percent complete		60
Cost Data—July
Work in process, July 1		$0
Materials		425,600
Labor		262,528
Overhead		116,480
Total		$804,608

Part 1

Compute the physical units of production.

		T12 Tables
Units to be accounted for

Part 2

Compute equivalent units of production for materials and for conversion costs.

		Materials		Conversion Costs
T12 Tables

Part 3

Determine the unit costs of production.

		Materials		Conversion Costs		Total Costs
Unit costs-T12 Tables		$		$		$

Part 4

Show the assignment of costs to units transferred out and in process.

T12 Tables
Costs accounted for:
Transferred out		$
Work in process
Materials	$
Conversion costs
Total costs		$

Answer 1

Part 1

Compute the physical units of production.

		T12 Tables
Units to be accounted for		22400

Part 2

Compute equivalent units of production for materials and for conversion costs.

		Materials		Conversion Costs
T12 Tables		22400		19040+(3360*60%) = 21056

Part 3

Determine the unit costs of production.

		Materials		Conversion Costs		Total Costs
Unit costs-T12 Tables		$425600/22400 = 19		$379008/21056 = 18		$37

Part 4

Show the assignment of costs to units transferred out and in process.

T12 Tables
Costs accounted for:
Transferred out		$704480
Work in process
Materials	$63840
Conversion costs	36288	100128
Total costs		$804608