Question

Wilson Dynamics makes flanges in a continuous process throughtwo departments: Forging and Assembly. All direct materials areadded at the beginning of the process in the Forging Department,whereas all direct materials are added at the end of the process inthe Assembly Department. Conversion costs are incurred uniformlyover time in both departments. As units are completed in theForging Department, they are transferred to the AssemblyDepartment. The costs associated with the transferred units areincluded in the computation of the Assembly Department’s totalcosts. The information presented as follows was compiled at the endof July.

	Forging Department			Assembly Department
Beginning Inventories(on July 1):
Physical units in productioncarried forward from June 30		5,000			4,000
Costs:
Transferred Forging costscarried forward from June 30				$	68,000
Direct materials costs carriedforward from June 30	$	45,000			?
Conversion costs carried forwardfrom June 30		16,000			3,000
Current Production (inJuly):
Units started during July		75,000			?
Units in ending inventories asof July 31		8,000			16,000
Costs:
Forging costs transferred toAssembly during July					?
Direct materials costs incurredin July	$	675,000		$	720,000
Conversion costs incurred inJuly		608,000			191,400
Percentage ofCompletion:
Inventories with respect toconversion on July 1		40	%		25	%
Inventories with respect toconversion on July 31		75			30

Required:

a. Complete the following requirements for theForging Department.

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

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

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

4. Prepare the summary journal entry required to transfer unitsfrom the Forging Department to the Assembly Department duringJuly.

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

b. Complete the following requirements for theAssembly Department.

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

2. Compute the equivalent units of direct materials andconversion for the Assembly Department in July. Direct materialsinclude both those transferred in from the Forging Department andthose added by the Assembly Department.

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

4. Prepare the summary journal entry required to transfer unitsfrom the Assembly Department to Finished Goods Inventory duringJuly.

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