Question

Randazzo Ltd. produces sports fan towels and uses the weighted average process costing method. All towels are cut to be the same size and from the same fabric but can be customized by adding one or more options: (1) embossed team logo, (2) streamers, and (3) a wooden handle. The following information is available for September 2013:
Towels
BI (70% complete as to conversion) ....... 15,000
Started ................. 520,000
EI (95% complete as to conversion) ....... 9,000
Cost data
Beginning inventory DM $ ......... 13,250s
Beginning inventory logos .......... 4,035
Beginning inventory conversion ....... 5,703
Current period DM ............. 468,250
Current period embossed logos ......... 298,735
Current period streamers ........... 119,977
Current period wooden handles ......... 1,312
Current period conversion .......... 282,954
At the beginning of September, 40 percent of the towels had been embossed. At the end of September, 70 percent of the towels in work in process were plain, 25 percent had been embossed, and 5 percent had streamers. Conversion is applied to all items equally. Randazzo’s production and sales for the month were as follows:


a. Determine the cost of Randazzo’s ending WIP Inventory of towels.
b. Determine the cost of Randazzo’s ending FG Inventory of towels.
c. Determine the cost of goods sold for September.
d. Should the conversion cost for all towels be the same amount?


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  • CreatedJune 03, 2014
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