Larsen Company is a manufacturer of car seats. Each car seatpasses through 1st the assembly department and 2nd testingdepartment. This problem focuses on the testing department. Directmaterials are added when the testing department process is 90%complete. Conversion costs are added evenly during the testingdepartment’s process. As work in assembly is completed, each unitis immediately transferred to testing. As each unit is completed intesting, it is immediately transferred to Finished Goods. Supposethat Larsen Company uses FIFO in all of its departments. Data forthe testing department for October 2014 are as follows:
Physical Transferred- Direct Conversion
units In Costs Materials Costs
Beg. work in processa 7,500 $2,800,000 $0 $835,460
Transferred in currently ? =_____ <------ question
Units Completed [UC] 26,300
End. work in process b 3,700
Total costs addedcurrently - - - - - -- $7,735,250 $9,704,700 $3,955,900
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aDegree of completion:transferred-in,?____%; direct materials,0%;conversion, 70%.
bDegree of completion: transferred-in costs,100%;direct materials,0%; conversion costs, 60%.
[And answer Question 1-5 step by step]
Required: Fill in the blanks ABOVE and below. Grading will NOTconsider your format and step-by-stepsolution:
1.a. Are the %s on Beg. Inventory REQUIRED for YOU to computethe equivalent units in the Required Item 1 below? Y/N? ____.
1.b. Compute the Current-period’s equivalent units in theTESTING department:
For the Transferred-in ______________, Direct Material________________, and Conversion _____________________.
2. Is the total equivalent units the total of OUTPUT or INPUTdone? My answer is it’s ________.
4. Calculate the Current-period’s Cost per equivalent unitfor:
the Transferred-in ______________, Direct Material________________, and
Conversion _______________.
5. Assign costs to the units completed and transferred out:$___________________;
and to those in ending work in process:$___________________.
