Ogden Office Outfitters began making high-quality office furniture in January. The companys executive desks are produced in
Question:
Ogden Office Outfitters began making high-quality office furniture in January. The company’s executive desks are produced in two departments: Cutting and Finishing. Component kits are produced in the Cutting Department and then transferred to the Finishing Department for trimming and assembly. During its first month of operations, the Cutting Department started 10,000 executive desk kits. January direct materials costs in the Cutting Department totaled $200,000, and conversion costs totaled $258,000. Ending inventory on January 31 consisted of 2,000 partially processed component kits. These units were 100 percent complete with respect to direct materials, but only 30 percent complete with respect to conversion.
a. Compute the number of component kits transferred from the Cutting Department to the Finishing Department in January.
b. Compute the equivalent units of input resources for the Cutting Department in January.
c. Compute the cost per equivalent unit of input resource for the Cutting Department in January.
d. Prepare the summary journal entry required to transfer finished component kits from the Cutting Department to the Finishing Department in January.
e. Compute the total cost assigned to the Cutting Department’s Ending inventory on January 31.
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...
Step by Step Answer:
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello