Question: Physical Flow, Equivalent Units, Unit Costs, No Beginning WIP Inventory, Activity-Based Costing Lacy, Inc., produces a subassembly used in the production of hydraulic cylinders. The
Physical Flow, Equivalent Units, Unit Costs, No Beginning WIP Inventory, Activity-Based Costing
Lacy, Inc., produces a subassembly used in the production of hydraulic cylinders. The subassemblies are produced in three departments: Plate Cutting, Rod Cutting, and Welding. Materials are added at the beginning of the process. Overhead is applied using the following drivers and activity rates:
| Driver |
| Rate |
| Actual Usage (by Plate Cutting) |
| Direct labor cost |
| 160% of direct labor |
| $732,000 |
| Inspection hours |
| $40 per hour |
| 7,450 hours |
| Purchase orders |
| $1,000 per order |
| 800 orders |
Other data for the Plate Cutting Department are as follows:
| Beginning work in process | |
| Units started | 750,000 |
| Direct materials cost | $7,500,000 |
| Units, ending work in process (100% materials; 64% conversion) | 50,000 |
Required:
- Prepare a physical flow schedule. If an answer is zero, enter "0".
- Calculate equivalent units of production for:
| Equivalent Units | |
| a. Direct Materials |
|
| b. Conversion Costs |
|
3. Calculate unit costs for the following. Round your answers to the nearest cent.
| a. Direct materials | $ | per unit |
| b. Conversion costs |
| per unit |
| c. Total manufacturing | $ | per unit |
4. Provide the following information: a. The total cost of units transferred out
b. The journal entry for transferring costs from Plate Cutting to Welding
c. The cost assigned to units in ending inventory.
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