| APCO Company manufactures various lines of bicycles. Because of the high volume of each line, the company employs a process cost system using the weighted-average method to determine unit costs. Bicycle parts are manufactured in the molding department and then are consolidated into a single bike unit in the molding department and transferred to the assembly department where they are partially assembled. After assembly, the bicycle is sent to the packing department. |
| | please fill in the question marks and explain formulas | | | | | | | | | | | | |
| Cost per unit data for the 20-inch dirt bike have been completed through the molding department. Annual cost and production figures for the assembly department are presented in the schedules that follow. |
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| | | | | | Assembly Department Cost Data | | |
| | | | | | Transferred in | | | | Assembly | | Total Cost of | | |
| | | | | | From Molding | | Assembly | | Conversion | | Dirt Bike through | | |
| | | | | | Department | | Materials | | Cost | | Assembly | | |
| | Prior period costs | $90,450 | | $7,363 | | $12,621 | | $110,434 | | |
| | Current period costs | $1,318,320 | | $100,530 | | $279,014 | | $1,697,864 | | |
| | Total costs | $1,408,770 | | $107,893 | | $291,635 | | $1,808,298 | | |
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| | | | | | Assembly Department Production Data | | |
| | | | | | | | Percentage Complete | | | | | |
| | | | | | | | Assembly | | | | | | |
| | | | | | Bicycles | | Transferred-in | | Materials | | Conversion | | |
| | Beginning inventory | 3,400 | | 100% | | 100% | | 87% | | |
| | Transferred in from molding during year | 49,800 | | 100% | | | | | | |
| | Transferred out to packing during year | 43,000 | | 100% | | 100% | | 100% | | |
| | Ending inventory | 4,600 | | 100% | | 54% | | 87% | | |
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| Defective bicycles are identified at the inspection point when the assembly labor process is 94 percent complete; all assembly materials have been added at this point. The normal rejection for defective bicycles is 6 percent of the bicycles reaching the inspection point. Any defective bicycles above the 6 percent quota are considered to be abnormal. All defective bikes are removed from the production process and destroyed. |
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| Required: |
| 1. Compute the number of defective, or spoiled, bikes that are considered to be: |
| a. Normal |
| b. Abnormal |
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| | a. Normal amount of defective or spoiled bikes |
| | | | | | | | | | | | | ? | |
| | Bikes passing through assembly department | | | |
| | Less: | | | | | | | | | | | | |
| | Bikes not inspected during current year |
| | Inspection point | 94% | % Completed | Units | Not Inspected This Year | | | | |
| | Beginning work-in-process inventory |
| | (The opening balance of work-in-process inspected this year) | 87% | 3,400 | ? | | | | |
| | Ending work-in-process inventory |
| | (Reached inspection point, therefore inspected this year or next) | 87% | 4,600 | ? | | | | |
| | Bikes that reached inspection point | | | |
| | Normal defective/spoiled rate | | | |
| | Normal amount of defective/spoiled bikes | | | |
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| | b. Abnormal amount of defective/spoiled bikes |
| | Total bikes lost | | | |
| | Normal amount of defective/spoiled bikes | 0 | | |
| | Abnormal amount of defective/spoiled bikes | | | |
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| 2. Compute the equivalent units of production for the year for: |
| a. Bicycles transferred in from the molding department |
| b. Bicycles produced, with regard to assembly material. |
| c. Bicycles produced, with regard to assembly conversion. |
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| | Process Cost Report | | | | | | | | | | |
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| | Inspection Point | | ? | | | | | | | | | |
| | | | | Whole | | --Percent Complete-- |
| | | | | Units | | Transferred-in Costs | | Materials | | Conversion | | | |
| | Beginning WIP | 3,400 | | | | | | | | | |
| | Units started or Trans-in | 49,800 | | | | | | | | | |
| | Total to account for | 53,200 | | | | | | | | | |
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| | Units Finished or Trans-out | 43,000 | | 100% | | 100% | | 100% | | | |
| | Normal spoilage | 0 | | ? | | ? | | ? | | | |
| | Abnormal spoilage | 0 | | ? | | ? | | ? | | | |
| | Ending WIP | 4,600 | | 100% | | 54% | | 87% | | | |
| | Total accounted for | | | | | | | | | | |
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| | EQUIVALENT UNITS: Wtd Avg Method (no. of completed units + equiv units lost + equiv units in ending WIP inv) |
| | Transferred In | ? | | | | | | | |
| | Materials ? | | | | | | |
| | Conversion ? | | | | |
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| 3. Compute the cost per equivalent unit for the fully assembled dirt bike. |
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| | Calculating Equivalent Unit Costs: | Added by Assembly Department |
| | | | | Trans-in | | Materials | | Conversion | | Total | | | |
| | Beginning WIP | $90,450 | | $7,363 | | $12,621 | | $110,434 | | | |
| | Current Costs | $1,318,320 | | $100,530 | | $279,014 | | $1,697,864 | | | |
| | TOTAL | | | $1,408,770 | | $107,893 | | $291,635 | | $1,808,298 | | | |
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| | WTAVG | Cost per EU | ? | | ? | | ? | | ? | | | |
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| 4. Compute the amount of the total production cost of $1,808,298 that will be associated with the following items: |
| a. Normal spoiled units. |
| b. Abnormal spoiled units. |
| c. Good units completed in the assembly department. |
| d. Ending WIP inventory in the assembly department. |
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| | COST SUMMARY - WEIGHTED AVERAGE |
| | Finished Goods | 43,000 | units | | | | | | | |
| | Good production | ? | | | | | | | | |
| | Normal spoilage | ? | | | | | | | | |
| | TOTAL ? | | | | | | | |
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| | Abnormal Spoilage | ? | units | ? | | | | | | |
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| | Ending WIP | 4,600 | units | | | | | | | |
| | Transferred-in | ? | | | | | | | | |
| | Materials | ? | | | | | | | | |
| | Conversion | ? | ? | | | | | | | |
| | Total Costs Accounted For ? | | | | | | | |
