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Assembly Dept of Webster Manufacturing cost report

Problem 1 Study guide

The Assembly Department of Webster Manufacturing uses a process cost accounting system and a weighted-average cost flow assumption. The department adds materials at the beginning of the process and incurs conversion costs uniformly throughout the process. During July, $190,000 of materials costs and $135,000 in conversion costs were charged to the department. The beginning work in process inventory was $103,000 on July 1, comprised of $80,000 of materials costs and $23,000 of conversion costs.

Other data for the month of July are as follows:
Beginning work in process inventory, 7/1 25,000 units (40% complete for conversion costs)
Units completed and transferred out 70,000 units
Ending work in process inventory, 7/31 30,000 units
(30% complete for conversion costs)

Required: Prepare the July production cost report for the assembly department.

Problem 2
Angara Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system:
Activity Cost Pools (and Activity Measures) Estimated
Overhead Cost
Machine related (machine-hours) $137,600
Batch setup (setups) $532,800
General factory (direct labor-hours) $105,300

Expected Activity
Activity Cost Pools Total Product X Product Y
Machine related 8,000 1,000 7,000
Batch setup 8,000 3,000 5,000
General factory 9,000 7,000 2,000

Required: Determine the amount of overhead to be allocated to each of the two products under activity-based costing.


Solution Summary

Assembly Dept of Webster manufacturing cost reports are examined.