Calculate the equivalent units for direct materials costs

Assignment Help Accounting Basics

Reference no: EM131900520

Problem

Larsen Company manufactures car seats in its Riyadh plant. Each car seat passes through the assembly department and the testing department. Management want to focus on the assembly department. The process-costing system at Larsen Company has a single direct-cost category (direct material) and single a single indirect-cost (conversion cost). Direct materials are added the beginning of the process. Conversion costs are added evenly during the process. When the assembly department finishes work on each car seat, the seat is immediately transferred to testing.

Larsen Company uses the Weighted-Average method of process costing. Data for the Assemble Department for October 2012 are as follows:

	Physical Units (Car seats)	Direct Materials	Conversion Costs
Work in Process, October 1, 2012 (a)	5,000	$1,250,000	$402,750
Started during October 2012	20,000
Completed During October 2012	22,500
Work in Process, October 31, 2012 (b)	2,500
Total costs added during October 2012		$4,500,000	$2,337,500

a Degree of completion: Direct materials, ?%, Conversion costs, 60%
b Degree of completion: Direct materials, ?%, Conversion costs, 70%

Required:

1. Calculate the equivalent units for Direct Materials and Conversion Costs.

2. For Direct Materials and Conversion Costs summarize the total Assembly Department Costs for October 2012 and calculate the Cost Per Equivalent Units.

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

Reference no: EM131900520

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