Problem 173A Part Level Submission Thakin Industries Inc man

Problem 17-3A (Part Level Submission) 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 two products in two different manufacturing plants are as follows. Cutting Department Plant 1 T12-Tables Plant 2 C10-Chairs Production Data-Jul Work in process units, July 1 Units started into production Work in process units, July 31 Work in process percent complete 23,400 3,510 60 18,720 585 80 Cost Data-Jul Work in process, July 1 Materials Labor Overhead 444,600 274,248 121,680 $840,528 $0 336,960 128,700 122,616 $588,276 Total (a1) Your answer is correct. For each plant compute the physical units of production. T12 Tables C10 Chairs Units to be accounted for 23400 18720

Solution

Answer:-

T12 Tables

Material Cost = $ 444,600

Total Unit Started into Production = 23400 units

Therfore Per unit cost = 444600 / 23400 = Cost / Units = $19 per Unit

Closing WIP = 3510

Therefor Completed units = 23400 - 3510 = 19890 units

Now Equivalent units = Completed Units + % of Closing WIP completed

= 19890 + (3510 *60%) = 19890+ 2106 = 21996 Units

So Material cost = 21996 units * $19 = $ 417,924

and For conversion cost =

Total conversion Cost = Labour + OVerhead

= 274,248 + 121,680 = $ 395,928

Total Units Started with = 23,400

Per unit conversion cost = 395,928/23400 = $ 16.92 per unit

Equivalent unit = 21,996 units ( as computed above)

= 21996 * 16.92 = $ 372,172.30 rounded off to nearest $ = 372,172 Answer

Now for C10 Charis same process :-

Total material cost =$336,960

Total units started with = 18,720

Material cost per unit = 336960 /18720 =$18 per unit

Equivalent unit =

Total completed unit + % of WIP completed

= total completed unit = 18720 - 585= 18,135 units

% of WIP completed = 585 * 80% = 468 units

total equivalent units = 18135+468 = 18603 units

Material cost for equivalent units = 18603 * $18 =$334,854

Now for Conversion Cost =

Total conversion cost = 128700+122616

= $251316

Per unit Conversion cost = 251316 / 18720 = $ 13.425 per units

so COnversion cost for equivalent units =

$13.425 * 18,603 units ( as computed above ) = $249,745 .28

Rounded off to nearest $ = 249,745 answer.