Lacy, Inc., produces a subassembly used in the production of hydraulic cylinders. The subassemblies are produced in three departments: Plate Cutting, Rod Cutting, and Welding. Materials are added at the beginning of the process. Overhead is applied using the following drivers and activity rates:

Other data for the Plate Cutting Department are as follows:
Beginning work in process €”
Units started .......... 750,000
Direct materials cost ........ $6,000,000
Units, ending work in process (100%
materials; 64% conversion)
Required:
1. Prepare a physical flow schedule.
2. Calculate equivalent units of production for:
a. Direct materials
b. Conversion costs
3. Calculate unit costs for:
a. Direct materials
b. Conversion costs
c. Total manufacturing
4. Provide the following information:
a. The total cost of units transferred out
b. The journal entry for transferring costs from Plate Cutting to Welding
c. The cost assigned to units in ending inventory

Transcribed Image Text:

Actual Usage (by Plate Cutting) Driver Direct labor cost Inspection hours Purchase orders Rate I 50% of direct labor $40 per hour $1,000 per order 732,000 7,450 hours 800 orders