Question:
Comprehensive; weighted average) Harper Company produces brooms. Department
1 winds and cuts straw into broom heads and transfers these to Department 2 where the broom head is bound and attached to a handle. Straw is added at the beginning of the first process, and the handle is added at the endof the second process.Normal losses in Department 1 should not exceed 5 percent of the units
started; losses are determined at an inspection point at the end of the productionprocess. The AQL in Department 2 is 10 percent of the broom headstransferred in; losses are found at an inspection point located 70 percent ofthe way through the production process.The following production and cost data are available for October 2001.
|
PRODUCTION RECORD
|
|
(IN UNITS)
|
Dept. 2
|
|
Beginning inventory
|
6,000
|
3,000
|
|
Started or transferred in
|
150,000
|
?
|
|
Ending inventory
|
18,000
|
15,000
|
|
Spoiled units
|
9,000
|
6,000
|
|
Transferred out
|
?
|
111,000
|
COST RECORD
|
Beginning inventory:
|
|
|
Preceding department
|
n/a
|
$ 6,690
|
|
Material
|
$ 3,000
|
0
|
|
Conversion
|
2,334
|
504
|
|
Current period:
|
|
|
Preceding department
|
n/a
|
230,910*
|
|
Material
|
36,000
|
740
|
|
Conversion
|
208,962
|
52,920
|
The beginning and ending inventory units in Department 1 are, respectively, 10 percent and 60 percent complete as to conversion. In Department 2, the beginning and ending units are, respectively, 40 percent and 80 percent complete as to conversion. Using the weighted average method, create a cost of production report for each department for October 2001.