Syed & Zhang Customized Manufacturing Ltd. produces severaldifferent alternators for over 10 different auto manufacturers thatcurrently have manufacturing operations located in SouthwesternOntario. Each one of these customers have very differentspecifications.
Syed & Zhang also has several departments. The first is themoulding department, followed by the customization department andthen finally the finishing department. In the first department thatbeing the moulding department they create a very specific templatefor the alternators. This component is called an AltitudeAlternator which is the starting point for all the different typesof alternators that are manufactured at Syed & Zhang. Thefollowing relates to the production of these alternators during themonth of June in the moulding department:
Please keep in mind that their previous controller recommendedthey use process costing. Base your calculations on the assumptionthat Syed & Zhang continue to use process costing forallocating and tracking costs.
| |
| Work-in-process inventory, June 1 | | 4,300 | alternators |
| Direct materials: 100% complete | $ | 10,780 | |
| Conversion: 30% complete | $ | 15,558 | |
| Units started during June | | 18,300 | trusses |
| Units completed during June and transferred out | | 17,300 | trusses |
| Work-in-process inventory, June 30 | | | |
| Direct materials: 100% complete | | | |
| Conversion: 30% complete | | | |
| Costs incurred during June | | | |
| Direct materials | $ | 59,340 | |
| Conversion | $ | 92,392 | |
|
Required
Using the weighted-average method, calculate the following:
1-a. Costs per equivalent unit. (Roundyour answers to 4 decimal places.)
1-b. Cost of goods completed and transferred out. (Round"Cost per EU" to 4 decimal places. Round final answer to nearestwhole dollars.)
1-c. Costs remaining in the Work-in-Process Inventory account.(Round "Cost per EU" to 4 decimal places. Do not roundother intermediate calculations. Round final answer to nearestwhole dollars.)
2. Assume that you are the company’s controller. The productiondepartment’s June equivalent unit cost is higher than expected. Ifthe manager of the first department asks you to do him a favor byincreasing the ending inventory completion percentage from 30 to50% to lower the unit costs, how much would unit cost be affectedby this request? (Round your answer to 4 decimalplaces.)
