Chap004 (dragged) 47 - belt incurred in October, $13.00....

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McGraw-Hill/Irwin ¤ 2005 The McGraw-Hill Companies, Inc. 4 - 48 Solutions Manual CASE 4-43 (45 MINUTES) 1. Equivalent units of material. .......................................................................... 8,500 E q u i v a l e n t u n i t s of conversion . .................................................................... 8,260 2. Cost per equivalent unit of material . ............................................................ $6.00 C o s t p e r e q u i v a l e n t unit of conversion. ....................................................... $7.00 3. October 31 work-in-process inventory. ........................................................ $3,520 C o s t o f g o o d s c o m p l e ted and transferred out . ........................................... $105,300 4. Weighted-average unit cost of completed leather belts. ............................ $13.00 These answers are supported by the following process-costing schedules. The firm's cost per belt used for planning and control, $11.50, is substantially lower than the actual cost per
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Unformatted text preview: belt incurred in October, $13.00. Management should investigate this situation to determine whether production costs can be reduced. If not, then the cost used for planning and control purposes should be changed to reflect the firm's actual experience. CALCULATION OF EQUIVALENT UNITS: LYCOMING LEATHER CO. - HARRISBURG PLANT Weighted-Average Method Equivalent Units Physical Units Percentage of Completion with Respect to Conversion Direct Material Conversion Work in process, October 1. ............ 500 30% Units started during October. .......... 8,000 Total units to account for . ............... 8,500 Units completed and transferred out during October. ........................ 8,100 100% 8,100 8,100 Work in process, October 31. .......... 400 40% 400 1 6 Total units accounted for. ................ 8,500 Total equivalent units. ...................... 8 , 5 8 , 2 6...
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