Wilson Dynamics Makes Flanges in a Continuous Process Through Two Departments

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Wilson Dynamics makes flanges in a continuous process through two departments: Forging and...

Wilson Dynamics makes flanges in a continuous process through two departments: Forging and Assembly. All direct materials are added at the beginning of the process in the Forging Department, whereas all direct materials are added at the end of the process in the Assembly Department. Conversion costs are incurred uniformly over time in both departments. As units are completed in the Forging Department they are transferred to the Assembly Department. The costs associated with the transferred units are included in the computation of the Assembly Department's total costs. The information presented below was compiled at the end of July:

Instructions

a.       Complete the following requirements for the Forging Department:

1.       Prepare a schedule showing units started and completed in the Forging Department during July.

2.       Compute the equivalent units of direct materials and conversion for the Forging Department in July.

3.       Determine the cost per equivalent unit of input resource for the Forging Department during July.

4.        Prepare the summary journal entry required to transfer units from the Forging Department to the Assembly Department during July.

5.       Compute the costs assigned to ending inventory in the Forging Department on July 31.

b.      Complete the following requirements for the Assembly Department:

1.       Prepare a schedule showing units started and completed in the Assembly Department during July.

2.        Compute the equivalent units of direct materials and conversion for the Assembly Department in July. Direct materials include both those transferred in from the Forging Department and those added by the Assembly Department.

3.       Determine the cost per equivalent unit of input resource for the Assembly Department during July.

4.       Prepare the summary journal entry required to transfer units from the Assembly Department to Finished Goods Inventory during July.

5.        Compute the costs assigned to ending inventory in the Assembly Department on July 31

Feb 06 2021| 06:45 AM | Solved

Magnus Robel Verified Expert

8 Votes

1652 Answers

a.	Requirements for the Assembly Department in July
1.	Flow of physical units: Forging Department
	Units in beginning inventory, July 1			5,000
	Units started in July			75,000
	Units in process during July			80,000
	Units in ending inventory, July 31			(8,000)
	Units transferred to Assembly Department in July			72,000
	Units in beginning inventory, July 1			(5,000)
	Unitsstarted and completedin July			67,000
2.				Direct
	Input resources			Materials	Conversion
	Tofinishunits in process on July 1:
		Direct materials (5,000 units require 0% to complete)		0
		Conversion (5,000 units require 60% to complete)			3,000
	Tostart and complete67,000 units in July			67,000	67,000
	Tostartunits in process on July 31:
		Direct materials (8,000 units 100% complete)		8,000
		Conversion (8,000 units 75% complete)			6,000
	Equivalent units of resources in July			75,000	76,000
3.				Direct
	Cost per equivalent unit in July			Materials	Conversion
	Costs incurred by Forging Department in July			$ 675,000	$ 608,000
	Equivalent units in July [see part(2)]			÷ 75,000	÷ 76,000
	Cost per equivalent unit in July			$ 9	$ 8
4.	Work in Process: Assembly Department			1,224,000
		Work in Process: Forging Department			1,224,000
	To record the transfer of 72,000 units to the Assembly
	Department in July:
		Cost of beginning inventory, July 1 ($45,000 + $16,000)		$ 61,000
		July direct materials (67,000 equivalent units × $9)		603,000
		July conversion (70,000 equivalent units × $8)		560,000
		Total cost of units transferred		$ 1,224,000
5.	Work in Process: Forging Department, July 31
	Direct materials (8,000 equivalent units × $9)			$ 72,000
	Conversion (6,000 equivalent units × $8)			48,000
	Ending inventory in process, July 31			$ 120,000

b.	Requirements for the Forging Dept. in July
(1)	Flow of physical units: Assembly Department
	Units in beginning inventory, July 1		4,000
	Units started in July [see parta (1)]		72,000
	Units in process during July		76,000
	Units in ending inventory, July 31		(16,000)
	Units transferred to Finished Goods in July		60,000
	Units in beginning inventory, July 1		(4,000)
	Unitsstarted and completedin July		56,000
(2)			Forging	Direct
	Input resources		Materials	Materials	Conversion
	Tofinishunits in process on July 1:
		Forging materials
		(4,000 units require 0% to complete)	0
		Direct materials
		(4,000 units require 100% to complete)		4,000
		Conversion
		(4,000 units require 75% to complete)			3,000
	Tostart and complete56,000 units in July		56,000	56,000	56,000
	Tostartunits in process on July 31:
		Forging materials (16,000 units 100% complete)	16,000
		Direct materials (16,000 units 0% complete)		0
		Conversion (16,000 units 30% complete)			4,800
	Equivalent units of resources in July		72,000	60,000	63,800
(3)			Forging	Direct
	Cost per equivalent unit in July		Materials	Materials	Conversion
	Costs charged to Assembly Department in July*		$ 1,224,000	$ 720,000	$ 191,400
	Equivalent units consumed in July [see part(2)]		÷ 72,000	÷ 60,000	÷ 63,800
	Cost per equivalent unit in July		$ 17	$ 12	$ 3
*Forging Department costs totaling $1,224,000 were transferred to the Assembly Department in July [see parta (4)].

(4)	Finished Goods Inventory			1,920,000
		Work in Process: Assembly			1,920,000
	To record the transfer of 60,000 units to the Finished Goods
	Inventory in July:
		Beginning inventory, July 1 ($68,000 + $3,000)		71,000
		July forging materials (56,000 equivalent units × $17)		952,000
		July direct materials (60,000 equivalent units × $12)		720,000
		July conversion (59,000 equivalent units × $3)		177,000
		Total cost of units transferred		$ 1,920,000
(5)	Work in Process: Finishing Department, July 31
	Forging materials (16,000 equivalent units × $17)			$ 272,000
	Direct materials (none)			0
	Conversion (4,800 equivalent units × $3)			14,400
	Ending inventory in process, July 31			$ 286,400

a.	Requirements for the Assembly Department in July
1.	Flow of physical units: Forging Department
	Units in beginning inventory, July 1			5,000
	Units started in July			75,000
	Units in process during July			80,000
	Units in ending inventory, July 31			(8,000)
	Units transferred to Assembly Department in July			72,000
	Units in beginning inventory, July 1			(5,000)
	Unitsstarted and completedin July			67,000
2.				Direct
	Input resources			Materials	Conversion
	Tofinishunits in process on July 1:
		Direct materials (5,000 units require 0% to complete)		0
		Conversion (5,000 units require 60% to complete)			3,000
	Tostart and complete67,000 units in July			67,000	67,000
	Tostartunits in process on July 31:
		Direct materials (8,000 units 100% complete)		8,000
		Conversion (8,000 units 75% complete)			6,000
	Equivalent units of resources in July			75,000	76,000
3.				Direct
	Cost per equivalent unit in July			Materials	Conversion
	Costs incurred by Forging Department in July			$ 675,000	$ 608,000
	Equivalent units in July [see part(2)]			÷ 75,000	÷ 76,000
	Cost per equivalent unit in July			$ 9	$ 8
4.	Work in Process: Assembly Department			1,224,000
		Work in Process: Forging Department			1,224,000
	To record the transfer of 72,000 units to the Assembly
	Department in July:
		Cost of beginning inventory, July 1 ($45,000 + $16,000)		$ 61,000
		July direct materials (67,000 equivalent units × $9)		603,000
		July conversion (70,000 equivalent units × $8)		560,000
		Total cost of units transferred		$ 1,224,000
5.	Work in Process: Forging Department, July 31
	Direct materials (8,000 equivalent units × $9)			$ 72,000
	Conversion (6,000 equivalent units × $8)			48,000
	Ending inventory in process, July 31			$ 120,000

b.	Requirements for the Forging Dept. in July
(1)	Flow of physical units: Assembly Department
	Units in beginning inventory, July 1		4,000
	Units started in July [see parta (1)]		72,000
	Units in process during July		76,000
	Units in ending inventory, July 31		(16,000)
	Units transferred to Finished Goods in July		60,000
	Units in beginning inventory, July 1		(4,000)
	Unitsstarted and completedin July		56,000
(2)			Forging	Direct
	Input resources		Materials	Materials	Conversion
	Tofinishunits in process on July 1:
		Forging materials
		(4,000 units require 0% to complete)	0
		Direct materials
		(4,000 units require 100% to complete)		4,000
		Conversion
		(4,000 units require 75% to complete)			3,000
	Tostart and complete56,000 units in July		56,000	56,000	56,000
	Tostartunits in process on July 31:
		Forging materials (16,000 units 100% complete)	16,000
		Direct materials (16,000 units 0% complete)		0
		Conversion (16,000 units 30% complete)			4,800
	Equivalent units of resources in July		72,000	60,000	63,800
(3)			Forging	Direct
	Cost per equivalent unit in July		Materials	Materials	Conversion
	Costs charged to Assembly Department in July*		$ 1,224,000	$ 720,000	$ 191,400
	Equivalent units consumed in July [see part(2)]		÷ 72,000	÷ 60,000	÷ 63,800
	Cost per equivalent unit in July		$ 17	$ 12	$ 3
*Forging Department costs totaling $1,224,000 were transferred to the Assembly Department in July [see parta (4)].

(4)	Finished Goods Inventory			1,920,000
		Work in Process: Assembly			1,920,000
	To record the transfer of 60,000 units to the Finished Goods
	Inventory in July:
		Beginning inventory, July 1 ($68,000 + $3,000)		71,000
		July forging materials (56,000 equivalent units × $17)		952,000
		July direct materials (60,000 equivalent units × $12)		720,000
		July conversion (59,000 equivalent units × $3)		177,000
		Total cost of units transferred		$ 1,920,000
(5)	Work in Process: Finishing Department, July 31
	Forging materials (16,000 equivalent units × $17)			$ 272,000
	Direct materials (none)			0
	Conversion (4,800 equivalent units × $3)			14,400
	Ending inventory in process, July 31			$ 286,400

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