Problem:
(Comprehensive; two departments) Safe-N-Sound makes a backyard fencing system for pet owners in a two-stage production system. In Process 1, wood is cut and assembled into six-foot fence sections. In Process 2, the sections are pressure treated to resist the effects of weather and then coated with a wood preservative. The following production and cost data are available for March 2001 (units are six-foot fence sections):
|
Units
|
Cutting Process
|
Pressure Process
|
|
Beginning WIP Inventory (March 1)
|
1,300
|
900
|
|
Complete as to material
|
80%
|
0%
|
|
Complete as to conversion
|
75%
|
60%
|
|
Units started in March
|
4,800
|
?
|
|
Units completed in March
|
?
|
4,500
|
|
Ending WIP Inventory (March 31)
|
1,100
|
?
|
|
Complete as to material
|
40%
|
0%
|
|
Complete as to conversion
|
20%
|
40%
|
|
Costs
|
|
|
|
Beginning WIP Inventory
|
|
Transferred-in
|
$ 4,725
|
|
Material
|
$ 2,130
|
0
|
|
Conversion
|
3,175
|
1,674
|
|
Current
|
|
|
|
Transferred-in
|
$ ?
|
|
Material
|
$ 8,800
|
4,995
|
|
Conversion
|
12,735
|
13,560
|
a.Prepare EUP schedules for both the cutting and pressure processes. Use the FIFO method.
b.Determine the cost per equivalent unit for the cutting process assuming a FIFO method.
c.Assign costs to goods transferred and to inventory in the cutting process on a FIFO basis.
d.Transfer the FIFO costs to the pressure process. Determine cost per EUP on a modified FIFO basis. (See footnote 8, page 233.)
e.Assign costs to goods transferred and to inventory in the pressure process on a modified FIFO basis.
f.Assuming there was no beginning or ending inventory of Finished Goods Inventory for March, what was Cost of Goods Sold for March?