Solution-Discuss what issues should the manager focus

Discuss what issues should the manager focus

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Reference no: EM131800824

Larsen Company manufactures car seats in its San Antonio plant. Each car seat passes through the assembly department and the testing department. This problem focuses on the assembly department. The process-costing system at Larsen Company 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 department finishes work on each car seat, it is immediately transferred to testing. Larsen Company uses the weighted- average method of process costing. Data for the assembly department for October 2014 are as follows:

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

a Degree of completion: direct materials,?%; conversion costs, 60%.

b Degree of completion: direct materials,?%; conversion costs, 70%.

What issues should the manager focus on when reviewing the equivalent units calculation?
Prepare a set of summarized journal entries for all October 2014 transactions affecting Work in Process- Assembly. Set up a T- account for Work in Process- Assembly and post your entries to it.

Reference no: EM131800824

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Discuss what issues should the manager focus

Reference no: EM131800824

Reference no: EM131800824

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