Reference no: EM13788176
Berkeley Bag manufactures high end book bags. One product line is a shoulder bag designed for trade fairs and conferences that the company "seeds" with products specified by the customer. Final processing takes place in the finishing department where each item transferred in from the sewing department is thoroughly inspected and tested before high value promotional samples and products are inserted in the various special purpose pockets. The bags are then packaged in bulk for shipment to the customer.
Due to an increase in the number of contracts the company has expanded its workforce, causing an increase in spoilage due to worker inexperience combined with a more demanding production schedule. Accordingly, the company has increased the level of spoilage considered to be normal under current conditions to 10% of the production transferred from sewing to finishing.
Conversion costs are incurred (and allocated) uniformly throughout the process as are the material costs represented by the promotional items and final packaging. The company uses the weighted average process cost accounting method.
Data for the Finishing Department for the current month follow:
Beginning Work-in-Process Finishing Department is 50 units:
100% complete for sewn bags transferred in
50% complete for direct materials
50% complete for conversion costs
Transferred in costs are $7,500
Material costs are are $2000
Costs of conversion are $2,500
Current period activity:
Units transferred in 200
Spoilage detected during the month 30
Good units completed and transferred out 160
Transferred in costs $30,000
Direct material costs $4,000
Conversion costs $7,500
Ending Work-in-Process finishing department is 60 units:
2/3 complete for direct materials
2/3 complete for conversion costs
1. The equivalent units of work completed and transferred out in the current period with respect to direct materials and conversion costs are:
2. The equivalent units of work completed and transferred out in the current period with respect to transferred in costs are:
3. The costs per equivalent unit of work done in the current period for transfers-in, direct materials, and conversion costs are:
4. The end of month debit to Finished Goods reflecting the month's production is:
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