1. Compute the total cost of units transferred out using the weighted-average method.
2. Compute the total cost of units in ending work-in-process inventory using the weighted-average method.
3. Compute the total cost of units transferred out using the FIFO method.
4. Compute the total cost of units in ending work-in-process inventory using the weighted-FIFO method.
5. Assign testing department costs to units completed and units in ending work-in-process inventory using the data from problem 33.
Weighted average method.
Larsen Company manufactures car seat 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 Dept. for October 2009 are:
|
|
|
|
Physical Units (Car Seats) |
Direct Materials |
Conversion Costs |
| Work in process October 1(a) |
|
500 |
$1,250,000 |
$402,750 |
| Started during Octover 2009 |
|
20000 |
|
|
| Completed during October 2009 |
22500 |
|
|
| Work in process October 31(b) |
|
2500 |
|
|
| Total costs added during October 2009 |
|
$4,500,000 |
$2,337,500 |
| a)degree of completion:direct materials: ?%; conversion costs 60% |
|
| b)degree od completion: direct materials ?%; conversion costs 70% |
|
FIFO Method
Do problem 30 using the FIFO method of process costing. Explain the difference between the cost per equivalent unit in the Assembly Department under the weighted average method and the FFIFO method.
Transferred in costs, weighted average method. Larsen Company as you know is a manufacturer of car seats. Each car seat passes through the Assembly department and Testing department. This problem focuses on the Testing department. Direct materials are added when the Testing department process is 90% complete. Conversion costs are added evenly during the Testing departments process. As work in Assembly is completed, each unit is immediately transferred to Testing. As each unit is completed in Testing it is immediately transferred to finished goods. Larsen Company uses the weighted average method of process costing. Data for the Testing Department for Oct 2009 are:
|
|
|
|
Physical Units (car Seats) |
Transferred in Costs |
Direct Materials |
Conversion Costs |
| Work in process, October 1(a) |
|
7500 |
$2,932,500 |
$0 |
$835,460 |
| Transferred in during Ovtober 2009 |
? |
|
|
|
| Completed diring October 2009 |
26300 |
|
|
|
| Work in process, October 31(b) |
3700 |
|
|
|
| Total costs added during Octover 2009 |
|
$7,717,500 |
$9,704,700 |
$3,955,900 |