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:

river		Rate		Actual Usage (by Plate Cutting)
Direct labor cost		170% 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	$5,250,000
Units, ending work in process (100% materials; 64% conversion)	50,000

1. Prepare a physical flow schedule. If an answer is zero, enter "0".

2. 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

The journal entry for transferring costs from Plate Cutting to Welding

	Work in Process-Welding ________
	Work in Process-Plate Cutting _______

c. The cost assigned to units in ending inventory.