question archive Company manufactures car seats in its plant
Company manufactures car seats in its plant
Subject:AccountingPrice:3.87 Bought7
Company manufactures car seats in its 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
Hoffman
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. Hoffman Company uses the FIFO method of process costing.
|
Physical Units |
Direct |
Conversion |
|
|
(Car Seats) |
Materials |
Costs |
|
Work in? process, October 1a |
4,000 |
$1,248,000 |
$241,650 |
|
Started during October 2017 |
22,500 |
||
|
Completed during October 2017 |
26,000 |
||
|
Work in? process, October 31b |
500 |
||
|
Total costs added during October 2017 |
$4,635,000 |
$2,575,125 |
aDegree of? completion: direct? materials, ?%; conversion?costs, 45?%.
bDegree of? completion: direct? materials, ?%; conversion?costs, 65?%.
|
Direct |
Conversion |
||
|
Materials |
Costs |
||
|
Costs incurred to date |
$5,883,000 |
$2,816,775 |
|
|
Divide by equivalent units of work done to date |
26,500 |
26,325 |
|
|
Cost per equivalent unit for work done to date |
$222 |
$107 |
|
|
Total |
Direct |
Conversion |
||
|
Production Costs |
Materials |
Costs |
||
|
Completed and transferred out |
$8,554,000 |
$5,772,000 |
$2,782,000 |
|
|
Work in process, ending |
145,775 |
111,000 |
34,775 |
|
|
Total costs accounted for |
$8,699,775 |
$5,883,000 |
$2,816,775 |
|
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