Question 1: Funtime Inc. makes small toys in a one-department production process.
Beginning Inventory: 15,000 toys (60% complete to labor; 75% complete as to overhead)
Started into production: plastic for 620,000 toys
Ending WIP Inventory: 25,400 toys (35% complete as to labor; 60% complete as to overhead)
a) Compute the EUP for direct material; direct labor; and overhead using weighted average process costing.
b) Compute the EUP for direct material; direct labor & overhead using FIFO process cost.
c) Reconcile the calculations in parts (a) and (b)
Question 2: lilliputian inc. produces dog food. All direct material is entered at the beginning of the process. some shrinkage occurs during the production process, but management considers any shrinkage of less than 8% to be normal. October 2010 data are as follows:
beginning wip inventory (45% complete as to conversion) 36,000 pounds
started during the month 120,000 pounds
transferred to fg inventory 126,000 pounds
ending wip inventory (15% complete as to conversion) 21,600 pounds
loss ? pounds
The following costs are associated with October production:
beginning wip inventory:
material 14,000
conversion 10,800 24,800
current period:
material 39,060
conversion 33,912 72,972
total cost to account for 97,772
Prepare an October 2010 cost of production report for lillputian inc. using FIFO process costing.
Question 3: Ro-Day-O Inc. manufactures belt buckles in a single-step production process. The following information is available for June 2010:
Whole Units Cost of Material Cost of Labor
Beginning WIP 200,000 $1,200,000 $1,728,000
Units started during period 1,000,000 7,800,000 9,612,000
Units in ending inventory 300,000
Beginning inventory units were 100 percent complete as to material and 80 percent complete as to labor. The ending inventory units were 100 percent complete as to material and 50 percent complete as to labor. Overhead is applied to production at the rate of 60 percent of direct labor cost.
a. Prepare a schedule to compute equivalent units of production by cost component assuming the weighted average method.
b. Determine the unit production costs for material and conversion.
c. Calculate the costs assigned to completed units and ending inventory for August 2010.