Global Defense manufactures the Interceptor Missile at its Camden plant. It has two departments: Assembly Department and
Question:
Global Defense manufactures the Interceptor Missile at its Camden plant. It has two departments: Assembly Department and Testing Department. This problem focuses on the Testing Department.
Direct materials are added when the Testing Department process is 90% complete. Conversion costs are added evenly during the Testing Department’s process. As work in Assembly Department is completed, each unit is immediately transferred to the Testing Department. As each unit is completed in the Testing Department, it is immediately transferred to Finished Goods.
Global Defense uses the weighted average method of process costing. Data for the Testing Department for October 2019 are:
Physical Units (Missiles) | Transferred-in Costs | Direct Materials | Conversion Costs | |
Work-in-Process, 1 October* | 30 | R985 800 | R0 | R331 800 |
Transferred-in during October | ? | |||
Completed during October | 105 | |||
Work-in-Process, 31 October** | 15 | |||
Total costs added during October | R3 192 866 | R3 885 000 | R1 581 000 |
*Degree of completion: transferred-in costs, ?%; direct materials, ?%; Conversion costs, 70%
**Degree of completion: transferred-in costs, ?%; direct materials, ?%; Conversion costs, 60%
Required:
4.1 Calculate the percentage of completion for the transferred-in costs and direct materials in the beginning WIP inventory, as well as the for the ending WIP inventory.
4.2 Prepare a production statement using the weighted average method.
4.3 Prepare a production statement using the FIFO method.
Introduction to Finance Markets Investments and Financial Management
ISBN: 978-1118492673
15th edition
Authors: Melicher Ronald, Norton Edgar