South Coastal Shore Automotive Components Inc. makes a variety of industrial products. This problem has a focus
Question:
South Coastal Shore Automotive Components Inc. makes a variety of industrial products. This problem has a focus on Product ID: G88XYZ452. ?The product is sold packaged in static resistance bubble wrap due to its fragile nature. ?The products are sold for $489 each. Import duties add another $35 of taxes to the original cost when sold in Hong Kong, Indonesia, Sydney and Brazil, while shipping adds $71. Through Federal economic opportunity programs, the markets are stable and the company seeks other off shore opportunities.
The first stage in the production process is carried out in the Fabrication Department, which does the preliminary assembly and fabrication of the units. ?The production process engineer Julie Samuels is a graduate of MIT and an incredible expert in this area. ?The organization uses the weighted-average method in its process costing system, previously they used FIFO, but changed a number of years ago to better match the marketplace expectations with the nuances of the operation. ?Due to their superb manufacturing processes, there is negligible spoilage, generally less than 2.4% of new units started.
However, this month 6.6% of the beginning WIP units were scrapped in the Fabrication Department when a humidity blocking unit door was accidentally left open in the storage area one evening, generating abnormal spoilage because of high electric static in the very dry air.
The Electronic Components Departmentadds direct materials at the start of the process and continues to do so throughout the production process. Electronic Components is an extremely efficiently executed operation. ?It operates under the tutelage of Michelle Falco, a world class expert. ?Kristen Storm is a paid meteorological consultant needed to assure proper hydration of the assembly and storage areas.
Units in theElectronics Components Department | Percent CompleteDirect Labor Costs | Percent CompleteMfg. Overhead Costs | Percent CompleteDirect Material Costs | |
Work in process 10/1/19 | 3,660 | 41.512% | 26.484% | 19.708% |
Transferred into process fromFabrication and added to production | 3,860,000 | |||
Work in process 10/31/19 | 5,118 | 64.085% | 51.265% | 86.902% |
The total costs to account for during the month are $9,671,000. ?
The total value of the ending WIP is $641,700. ?
The WIP costs were 5.4% higher than forecasted due to large internal failure costs with poor quality raw material products experienced in the Fabrication department. ?Unfortunately, a machine failure allowed the relative humidity to lower dramatically causing static. ?
The company experienced a 0.0066% abnormal loss on the units transferred into the Electronic Components Department. ?
Typically, 0.0024% of units transferred into production are normal spoilage when production starts are 1,000,000. ?However, since the equipment is older and needs more maintenance to continue operations at higher rates, the normal spoilage rate rises with capacity utilization to 0.0043% for all units in excess of 1,000,000 and less than 3,000,000, and 0.0066% for all units in excess of 3,000,000 units. Complete the units EUP analysis report.
Managerial accounting
ISBN: 978-0471467854
1st edition
Authors: ramji balakrishnan, k. s i varamakrishnan, Geoffrey b. sprin