Exercise 1611 Part Level Submission The Polishing Department

Exercise 16-11 (Part Level Submission)

The Polishing Department of Major Company has the following production and manufacturing cost data for September. Materials are entered at the beginning of the process.

Production: Beginning inventory 1,680 units that are 100% complete as to materials and 30% complete as to conversion costs; units started during the period are 47,000; ending inventory of 5,700 units 10% complete as to conversion costs.

Manufacturing costs: Beginning inventory costs, comprised of $21,700 of materials and $76,790 of conversion costs; materials costs added in Polishing during the month, $235,817; labor and overhead applied in Polishing during the month, $127,100 and $257,740, respectively.

(a)

Materials

Conversion Costs

Open Show Work

Exercise 16-11 (Part Level Submission) The Polishing Department of Major Company has the following production and manufacturing cost data for September. Materials are entered at the beginning of the process. Production: Beginning inventory 1,680 units that are 100% complete as to materials and 30% complete as to conversion costs; units started during the period are 47,000; ending inventory of 5,700 units 10% complete as to conversion costs. Manufacturing costs: Beginning inventory costs, comprised of $21,700 of materials and $76,790 of conversion costs; materials costs added in Polishing during the month, $235,817; labor and overhead applied in Polishing during the month, $127,100 and $257,740, respectively.

Solution

Computation of equivalent units of production for materials and conversion costs for the month of September Using FIFO method Physical Units % Complete with respect to material cost Equivalent units for material cost % Complete with respect to Conversion cost Equivalent units for conversion cost Unit completed out of beginning inventory 1680 0% 0 70% 1176 Units started and completed 41300 100% 41300 100% 41300 Units in ending inventory 5700 100% 5700 10% 570 Equivalent units of production 47000 43046 Uisng weighted average method Physical Units % Complete with respect to material cost Equivalent units for material cost % Complete with respect to Conversion cost Equivalent units for conversion cost Units completed 42980 100% 42980 100% 42980 Units in ending inventory 5700 100% 5700 10% 570 Equivalent units of production 48680 43550 The equivalent units of production Materials Conversion FIFO method 47000 43046 Weighted average method 48680 43550 Working Calculation of completed units during september Beginning Inventory 1680 Add : Units started 47000 Less : Ending Inventory 5700 Completed units 42980