Exercise 176 Part Level Submission The Cutting Department of

Exercise 17-6 (Part Level Submission) The Cutting Department of Cassel Company has the following production and cost data for July. Production Costs Beginning work in process Materials Labor Manufacturing overhead $0 67,200 15,614 20,400 1. Transferred out 12,600 units. 2. Started 3,400 units that are 60% complete as to conversion costs and 100% complete as to materials at July 31. Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process. Your answer is correct. Determine the equivalent units of production for (1) materials and (2) conversion costs. Materials Conversion Costs Total equivalent units of production T 16000 14640

Solution

Solution a:

Equivalent units of production for material = 12600 + 3400*100% = 16000 units

Equivalent units of production for conversion= 12600 + 3400*60% = 14640 units

Solution b1:

Unit cost for materials = Material Cost / Equivalent units of production for material  = $67200 / 16000 = $4.20

Unit cost for conversion costs = (Labor cost + manufacturing overhead) / Equivalent units of production for conversion = ($15614 +$20400) / 14640 = $2.46