IFO Method, Physical Flow, Equivalent Units, Unit Costs, Cost Assignment Swasey Fabrication, Inc., manufactures frames for bicycles. Each frame passes through three processes: Cutting, Welding, and Painting. In September, the Cutting Department of the Tulsa, Oklahoma, plant reported the following data: In Cutting, all direct materials are added at the beginning of the process. Beginning work in process consisted of 41,000 units, 20 percent complete with respect to direct labor and overhead. Costs in beginning inventory included direct materials, $1,215,000; direct labor, $223,000; and applied overhead, $150,000. Costs added to production during the month were direct materials, $2,565,000; direct labor, $3,471,050. Overhead was assigned using the following information: Activity Rate Actual Driver Usage Inspection $150 per inspection hour 4,000 inspection hours Maintenance $750 per maintenance hour 1,600 maintenance hours Receiving $300 per receiving order 2,000 receiving orders At the end of the month, 122,000 units were transferred out to Welding, leaving 13,000 units in ending work in process, or 25 percent complete. Assume that the FIFO method is used. Required: 1. Prepare a physical flow schedule. Swasey Fabrication, Inc. Physical Flow Schedule Units to account for: Total units to account for Units accounted for: Total units accounted for 2. Calculate equivalent units of production for direct materials and conversion costs. Equivalent Units Direct Materials Conversion Costs 3. Compute unit cost. Round unit costs & final answer to three decimal places. $ per unit 4. Calculate the cost of goods transferred to Painting at the end of the month. In your calculations, round unit costs to three decimal places. Round your final answer to the nearest dollar. $ Calculate the cost of ending inventory. In your calculations, round unit costs to three decimal places. Round your final answer to the nearest dollar. $
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
FIFO Method, Physical Flow, Equivalent Units, Unit Costs, Cost Assignment
Swasey Fabrication, Inc., manufactures frames for bicycles. Each frame passes through three processes: Cutting, Welding, and Painting. In September, the Cutting Department of the Tulsa, Oklahoma, plant reported the following data:
- In Cutting, all direct materials are added at the beginning of the process.
- Beginning work in process consisted of 41,000 units, 20 percent complete with respect to direct labor and overhead. Costs in beginning inventory included direct materials, $1,215,000; direct labor, $223,000; and applied overhead, $150,000.
- Costs added to production during the month were direct materials, $2,565,000; direct labor, $3,471,050. Overhead was assigned using the following information:
Activity Rate Actual Driver Usage Inspection $150 per inspection hour 4,000 inspection hours Maintenance $750 per maintenance hour 1,600 maintenance hours Receiving $300 per receiving order 2,000 receiving orders - At the end of the month, 122,000 units were transferred out to Welding, leaving 13,000 units in ending work in process, or 25 percent complete.
Assume that the FIFO method is used.
Required:
1. Prepare a physical flow schedule.
| Swasey Fabrication, Inc. | |
| Physical Flow Schedule | |
| Units to account for: | |
| Total units to account for | |
| Units accounted for: | |
| Total units accounted for |
2. Calculate equivalent units of production for direct materials and conversion costs.
| Equivalent Units | |
| Direct Materials | |
| Conversion Costs |
3. Compute unit cost. Round unit costs & final answer to three decimal places.
$ per unit
4. Calculate the cost of goods transferred to Painting at the end of the month. In your calculations, round unit costs to three decimal places. Round your final answer to the nearest dollar.
$
Calculate the cost of ending inventory. In your calculations, round unit costs to three decimal places. Round your final answer to the nearest dollar.
$
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