Reference no: EM133044501

Question - Weighted average process costing; analysis of equivalent units; manufacturer TeleFone Ltd assembles various components used in the telecommunication industry. The company's major product, a relay switch, is made by assembling three parts: A453, B344 and C543. The following information relates to activities in march;

i. Beginning work in process inventory: 5000 units, 60 percent complete as to conversion; cost, $250000 (direct materials, $195000, conversion cost $55000)

ii. Production starts 35000 units.

iii. Production completed 34000 units.

iv. Ending work in process inventory, 6000 units, 40 percent complete as to conversion.

v. Direct materials used; A453: $155000, B344: $375000, C543: $250000

vi. Hourly wage of direct laboured $22 , total direct labour payroll $139150.

vii. Overhead application rate $25 per direct labour hour.

All parts are introduced at the beginning of TeleFone's manufacturing process, conversion cost are incurred uniformly throughout the production process. The company uses weighted average cost to allocate costs to production.

Required -

1. Calculate the total cost of direct materials and conversion during March.

2. Determine the cost of goods completed during the month.

3. Determine the cost of the work in process inventory on 31 March.

4. With regards to the ending work in process inventory:

(a) How much direct materials cost would be added to these units in April?

(b) What percentage of conversion would be performed on these units in April?

5. Assume that the relay switch required the addition of another part (D775) at the 70 percent stage of completion. How many equivalent units with respect to part D775 would be represented in March ending work in process inventory?