Johnson, Inc. manufactures car seatsin its Houston plant. Each car seat passes through the AssemblyDept and the Testing Dept. This problem focuses on the AssemblyDept. the process-costing system at Johnson, Inc. has a singledirect-cost category (direct materials) and a single indirect-costcategory (conversion costs). Direct materials are added at thebeginning of the process. Conversion costs are added evenly duringthe process. When the Assembly Dept finished work on each car seat,it is immediately transferred to Testing.
Johnson, Inc. uses the FirstIn First Out Method of process costing.Data for the Assembly Dept for June 2016 is:
PhysicalUnits Direct Conversion
(CarSeats) Materials Costs
Work-in-process, June1* 5,000 $1,250,000 $402,750
Started during Jun2016 20,000
Completed during Jun2016 22,500
Work-in-process Jun30** 2,500
Total costs added during
June2016 $4,500,000 $2,337,500
*Degree of completion: DM ?%; CC60%
**Degree of completion: DM ?%; CC70%
- For each cost category; compute equivalent units in theAssembly Dept. Show
physical units in the first column of the schedule.
- For each cost category, summarize total Assembly Dept costs forJune 2016 and
calculate the cost per equivalent unit.
- Assign total costs to units completed and transferred out andto units in ending Work in Process
- Prepare the journal entry to move costs from WIP-Assembly Deptto theWIP-
Testing Department.
