Sign It! makes outdoor advertising signs which it sells to advertising companies. The company uses operation costing and manufactures their outdoor signs in four operations. In the Cutting operation, the signs are cut into the correct size from large, unfinished sheets they acquire from an outside supplier. In Finishing, the edges are smoothed and a magnetic metal surface is added. In Framing, the signs are inserted into a metal frame and stand. In Packaging, the signs are inspected and packaged. Not all signs are framed as some customers prefer to insert the sign into their own frames.

During January of the current year, the following conversion costs will be incurred by the company:

Cutting	Finishing	Framing	Packaging
$280,000	$130,200	$84,000	$56,000

Sign It! computes conversion cost rates per unit each month. In January, the company will manufacture 70,000 signs, 20,000 of which will NOT be framed.

Details of two work orders for January are as follows:

	W.O. #85	W.O. #86
Number of Signs Direct Materials costs Framed?	4,000 $ 96,000 No	6,000 $ 152,000 Yes

REQUIRED:

1. Compute the Conversion Cost allocation rates per unit for
2. Calculate the total costs and the costs per sign for each of the two work
3. Journalize W/O #86 from start to finish. Assume all direct materials are added at the start of the Cutting

Answer rating: 100% (QA)

complete s... View the full answer