Group Project $2$ Chapter $18$

$$I am astounded that we cannot find the cost records for the month of July $2021$ said Greg Andrews, plant manager of Detroit Component Works $($DCW$).$ I have a division meeting to attend where I will be asked about the plant$$s July performance compared to June. All I have now are the weighted average cost figures, but those numbers are hardly helpful in answering the question of whether we have improved the efficiency of our performance this month compared to the previous months. I think we have improved the efficiency of our operations. so I was expecting to report some good news at the division meeting. I need those July numbers now.$$ DCW makes complex aircraft engine components in one operation which combines $$machining and assembly. After the units are completed they are transferred to cost of goods sold.

The following is a summary of the Assembly operations in July of $2021.$

Physical Direct Conversion

Units Materials Cost

W$-$in$-$P$,7/1*120$ $$15,000$ $$8,325$

Cost Added

during July $200$

Completed

during July $220$

W$-$in$-$P$,7/31**100$

Cost Added

during July $??$

Weighted average cost

Per equivalent unit $$131\mathrm{.}25$ $$114$

$*$ Degree of Completion: Direct Materials, $100\%$; Conversion Cost, $62\mathrm{.}5\%$

$**$Degree of Completion: Direct Materials, $100\%,$ Conversion Cost, $80\%.$

For each cost element $($Direct Materials and Conversion Cost$),$ calculate the cost per equivalent unit of work performed in the current period only. $($FIFO$).$ These are the numbers that Greg Andrews wants for the division meeting.

Prepare a brief description comparing and commenting on the cost per equivalent unit of work done in the current period $($FIFO$)$ with cost per equivalent unit using the weighted average method. Which method would yield the highest income, the Fifo Method or the Weighted average method? Why?$-$I am astounded that we cannot find the cost records for the month of July ${2021}^{-}$sand

Greg Andrews, plant manager of Detroit Component Works $($DCW$).$ "I have a division

meeting to attend where I will be asked about the plant's July performance compared to

June. All I have now are the weighted average cost figures, but those numbers are hardly

helpful in answering the question of whether we have improved the efficiency of our

performance this month compared to the previous months. I think we have improved the

efficiency of our operations. so I was expecting to report some good news at the division

meeting. I need those July numbers now." DCW makes complex aircraft engine

components in one operation which combines $-$ machining and assembly. After the units

are completed they are transferred to cost of goods sold.

The following is a summary of the Assembly operations in July of $2021.$

Degree of Completion: Direct Materials, $100\%$; Conversion Cost, $62\mathrm{.}5\%$

${?}^{****}$ Degree of Completion: Direct Materials, $100\%,$ Conversion Cost, $80\%.$

For each cost element $($Direct Materials and Conversion Cost$),$ calculate the

cost per equivalent unit of work performed in the current period only.

$($FIFO$).$ These are the numbers that Greg Andrews wants for the division

meeting.

Prepare a brief description comparing and commenting on the cost per

equivalent unit of work done in the current period $($FIFO$)$ with cost per

equivalent unit using the weighted average method. Which method would

yield the highest income, the Fifo Method or the Weighted average method?

Whv$?$