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TAO CORPORATION

The TAO CORPORATION manufactures chairs that must go through one department.

Direct materials are added at the beginning of the process. Conversion costs are added evenly during the process. The accounting records for February provide the following information:

Conversion

Physical Units Materials Costs

Beginning inventory

Work in Process 20 $460,000 $120,000

Started during February 80

Completed in February 90

Ending inventory

Work in Process ?

February costs $2,000,000 $927,600

Note: The beginning inventory is 60% complete as to conversion costs, and the ending inventory is 70% complete as to conversion costs. TAO uses the weighted average method.

REQUIRED:

Determine the equivalent units for February.

Compute the costs per equivalent unit for February.

Determine the total cost of the units transferred out and the ending work in process inventory.

Prepare all regular journal entries for February.

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Jamar Ferry
Jamar FerryLv2
28 Sep 2019

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PAN CORPORATION

PAN CORPORATION produces toy chairs for young children. Plastic pieces are molded in the plastics department. These pieces are transferred to the assembly department, where additional work is done. Units completed in the Assembly Department are transferred to Finished Goods.

Plastics Department

The direct materials are added in the plastics department at the beginning of the process. In the month of February beginning inventory is 80% complete as to conversion costs and ending inventory is 25% complete as to conversion costs. Following are data for February:

Beginning inventory costs for the plastics department:

Direct materials $2,000

Conversion costs 1,600

Total $3,600

Costs incurred in the plastics department during February:

Direct materials $18,000

Conversion costs 16,000

Total $34,000

Physical units in the plastics department

Units in beginning inventory 2,000

Units transferred-in during August 18,000

Total units transferred out 15,000

Units in ending inventory ?

The company uses weighted average.

Required:

What is the difference between job order costing and process costing?

All questions below relate to the Plastics Department:

Compute the equivalent units and the cost per equivalent unit for February.

If materials are added at the end of the period, compute the equivalent units and costs per equivalent unit for February.

If materials are added at the 20% point, compute the equivalent units.

Why is that direct labor and overhead are combined into conversion costs in this problem?

Data for department A for February 2012 are:
Work in process beginning inventory, 40% converted-----200units
Units started during February ----------------------------------600units
Work in process ending inventory
30% complete as to conversion costs
100% complete as to materials
Costs for the department A for February 2012 are:
Work in process beginning inventory
Direct materials---------------------------------------------200,000
Conversioncosts---------------------------------------------200,000
Direct materials costs added duringFeb----------------------2,000,000
Conversion costs added duringFeb----------------------------2,500,000

What were the equivalent units of direct materials and conversioncosts, respectively, at the end of February? Assume DustinPlastics, Inc., uses the weighted-average process costingmethod.

Data Beginning work in process inventory: Units in process 200 Completion with respect to materials 100% Completion with respect to conversion 40% Costs in the beginning work in process inventory: Materials cost $2,000 Conversion cost $800 Units started into production during the period 1,800 Costs added to production during the period: Materials cost $18,400 Conversion cost $38,765 Ending work in process inventory: Units in process 100 Completion with respect to materials 100% Completion with respect to conversion 30% Enter a formula into each of the cells marked with a ? below Weighted Average method: Equivalent Units of Production Materials Conversion Units transferred to the next department ? ? Ending work in process inventory: Materials ? Conversion ? Equivalent units of production ? ? Costs per Equivalent Unit Materials Conversion Cost of beginning work in process inventory ? ? Costs added during the period ? ? Total cost ? ? Equivalent units of production ? ? Cost per equivalent unit ? ? Costs of Ending Work in Process Inventory and the Units Transferred Out Materials Conversion Total Ending work in process inventory: Equivalent units of production ? ? Cost per equivalent unit ? ? Cost of ending work in process inventory ? ? ? Units completed and transferred out: Units transferred to the next department ? ? Cost per equivalent unit ? ? Cost of units transferred out ? ? ? Cost Reconciliation Costs to be accounted for: Cost of beginning work in process inventory ? Costs added to production during the period ? Total cost to be accounted for ? Costs accounted for as follows: Cost of ending work in process inventory ? Cost of units transferred out ? Total cost accounted for ?

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