One department of Dallas Instruments Company manufactures basic handheld calculators. Several materials are added at various stages of the process. The outer front shell and the carrying case, which represent 10% of the total materials cost, are added at the final step of the assembly process. All other materials are considered to be “in process” by the time the calculator reaches a 50% stage of completion.
During 20X0, 74,000 calculators were started in production. At year-end, 6,000 calculators were in various stages of completion, but all of them were beyond the 50% stage and, on the average, they were regarded as being 70% completed.
The following costs were incurred during the year: direct materials, $205,520; conversion costs, $397,100. There was no beginning WIP inventory.
1. Prepare a schedule of physical units and equivalent units.
2. Tabulate the unit costs, cost of goods completed, and cost of ending work in process.