Preston Company manufactures car seats in its Boston plant. Each car seat passes through the assembly department
Question:
Preston Company manufactures car seats in its Boston plant. Each car seat passes through the assembly department and the testing department. This problem focuses on the assembly department. The process-costing system at Preston Company has a single direct-cost category (direct materials) and a single indirect-cost category (conversion costs). Direct materials are added at the beginning of the process. Conversion costs are added evenly during the process. When the assembly department finishes work on each car seat, it is immediately transferred to testing. Preston Company uses the weighted-average method of process costing.
1. For each cost category, compute equivalent units in the assembly department. Show physical units in the first column of your schedule.
2. What issues should the manager focus on when reviewing the equivalent-unit calculations?
3. For each cost category, summarize total assembly department costs for October 2020 and calculate cost per equivalent unit.
4. Assign costs to units completed and transferred out and to units in ending work in process
a Degree of completion: direct materials, ?%; conversion costs, 50 %.
b Degree of completion: direct materials, ?%; conversion costs, 70%.
Horngrens Cost Accounting A Managerial Emphasis
ISBN: 978-0134475585
16th edition
Authors: Srikant M. Datar, Madhav V. Rajan