Explore BrainMass

Explore BrainMass

    Process costing

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Cassatt Ltd. uses process costing to account for the costs of manufacturing their office bookcases. The following information is available for the month of November 2009:

    Beginning WIP inventory (physical units) 8,000 75% complete for conversion
    Units started during the month 102,000
    Ending WIP inventory (physical units) 10,000 65% complete for conversion

    Costs attached to beginning WIP inventory:
    Direct material $12,000
    Conversion costs $2,500

    Costs added during the month:
    Direct material $49,500
    Conversion costs $9,500

    Conversion costs are added evenly during the process, while direct materials are added in two stages during the production process. One�half of all direct materials are added at the beginning of the process, with the remaining half added when the process is 60% complete.

    Assume that Cassatt uses the FIFO method of process costing.

    1. What is the equivalent unit cost for the month of November for direct materials (round to four
    decimal places)?
    a. $0.4670
    b. $0.4853
    c. $0.5025
    d. $0.5802
    e. $0.6029

    2. Assume now that Cassatt uses the weighted�average method of process costing, and that the total equivalent units for the month were calculated to be 110,000 for direct materials and 106,500 for conversion. What is the total dollar value of the cost of goods transferred from work in progress to finished goods? Round the equivalent unit costs to four decimal places.

    a. $53,920
    b. $61,803
    c. $67,177
    d. $68,033
    e. $68,420

    © BrainMass Inc. brainmass.com June 4, 2020, 12:02 am ad1c9bdddf

    Solution Preview

    1. Total units available are 8,000+102,000=110,000. Of this 10,000 is ending WIP and so 100,000 is completed. Of the 100,000 completed, 8,000 would be from opening WIP and ...

    Solution Summary

    The solution explains the calculation of equivalent units and cost of goods transferred