The new manager of the cpu assembly department was asked to

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Reference no: EM13484275

Bell Computers, Ltd., located in Liverpool, England, assembles a standardized personal computer from parts it purchases from various suppliers. The production process consists of several steps, starting with assembly of the "mother" circuit board, which contains the central processing unit. This assembly takes place in the CPU Assembly Department. The company recently hired a new accountant who prepared the following report for the department for May using the weighted-average method:



Units to be accounted for:
Work in process, May 1: materials 90%
complete; conversion 80% complete
8,700   
Started into production 37,600   


Total units 46,300   



Units accounted for as follows:
Transferred to next department 37,100   
Work in process, May 31: materials 75%
 complete; conversion 50% complete
9,200   


  Total units 46,300   




 Cost Reconciliation

 Cost to be accounted for:

 Work in process, May 1 £ 24,534  
Cost added in the department
115,404  



 Total cost to be accounted for £ 139,938  





 Cost accounted for as follows:

 Work in process, May 31 £ 19,734  
 Transferred to next department
120,204  



Total cost accounted for £ 139,938  






The company's management would like some additional information about May's operation in the CPU Assembly Department. (The currency in England is the pound, which is denoted by the symbol £.)

Required:
1. How many units were started and completed during May?
 Units started and completed during May   
2. What were the equivalent units for May for materials and conversion costs?

Materials Conversion
 Equivalent units of production

3.

What were the costs per equivalent unit for May? The following additional data are available concerning the department's costs: (Omit the "£" sign in your response)


Materials Conversion Total
 Work in process, May 1 £ 16,530   £ 8,004     £ 24,534   
 Costs added during May £ 75,870   £ 39,534     £ 115,404   


Materials Conversion
 Cost per equivalent unit £ £

4.

Calculate the material cost and the conversion cost of the ending work in process. (Omit the "£" sign in your response.)


     Materials      Conversion   Total
  Ending work in process inventory:


     Equivalent units of production        
     Cost per equivalent unit £     £    
     Cost of ending work in process inventory £     £     £   

5.

The new manager of the CPU Assembly Department was asked to estimate the incremental cost of processing an additional 1,000 units through the department. He took the unit cost for an equivalent whole unit you computed in (3) above and multiplied this figure by 1,000. Will this method yield a valid estimate of incremental cost?





Yes

No

Reference no: EM13484275

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