Assign total costs to units completed and transferred out

Assignment Help Operation Management

Reference no: EM131306162

Be Safe, Inc. manufactures car seats in its Dallas plant. Each car seat passes through the Assembly Dept and the Testing Dept. This problem focuses on the Assembly Dept. the process-costing system at Be Safe, Inc. has a single direct-cost category (direct materials) and a single indirect-cost category (conversion costs). Direct materials are added at the beginning of the process. Conversion costs are added evenly during the process. When the Assembly Dept finished work on each car seat, it is immediately transferred to Testing.

Be Safe, Inc. uses the First In First Out Method of process costing. Data for the Assembly Dept for September 2014 is:

Physical Units Direct Conversion

(Car Seats) Materials Costs

Work-in-process, Sep 1* 5,000 $1,250,000 $402,750

Started during Sep 2014 20,000

Completed during Sep 2014 22,500

Work-in-process Sep 30** 2,500

Total costs added during

Oct 2009 $4,500,000 $2,337,500

*Degree of completion: DM ?%; CC 60%

*Degree of completion: DM ?%; CC 70%

1. For each cost category; compute equivalent units in the Assembly Dept. Show

physical units in the first column of the schedule.

2. For each cost category, summarize total Assembly Dept costs for Sep 2014 and

calculate the cost per equivalent unit.

3. Assign total costs to units completed and transferred out and to units in ending Work in Process

4. Prepare the journal entry to move costs from WIP-Assembly Dept to the WIP-

Testing Department.

Reference no: EM131306162

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