Thompson Tools produces dampers in a continuous process through two departments: Assembly and Packaging. All direct materials are added at the beginning of the process in the Assembly

 

 

th D Â

t  rough Two

Department, whereas all direct materials are added at the end of the process in the Packaging

 

LO5

 

Departments

 

Department. Conversion costs are incurred uniformly over time in both departments. As units

are completed in the Assembly Department, they are transferred to the Packaging Department. The costs associated with the transferred units are included in the computation of the Packaging Department’s total costs. The information presented below was compiled at the end of March:

 

 

 

 

 

 

 

Beginning Inventories (on March 1):

 

Assembly       Packaging Department       Department

 

Physical units in production carried forward from February 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             5,000                  4,000 Costs:

Transferred Assembly costs carried forward from February 28 . . . . . . . . . . . . . . . . . . . . . . . . . . .                                  $ 60,000

Direct materials costs carried forward from February 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        $ 45,000                    ?

Conversion costs carried forward from February 28  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              9,000                  3,200

Current Production (in March):

Units started during March  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               80,000                   ?

Units in ending inventories as of March 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               9,000                20,000 Costs:

Assembly costs transferred to Packaging during March  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                          ?

Direct materials costs incurred in March  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         $720,000            $840,000

Conversion costs incurred in March . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          490,200              260,800

Percentage of Completion:

Inventories with respect to conversion on March 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  30%                    20%

Inventories with respect to conversion on March 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  80                       30

 

 

 

Instructions

a.      Complete the following requirements for the Assembly Department:

1.      Prepare a schedule showing units started and completed in the Assembly Department dur- ing March.

2.      Compute the equivalent units of direct materials and conversion for the Assembly Depart- ment in March.

3.      Determine the cost per equivalent unit of input resource for the Assembly Department during March.

4.      Prepare the summary journal entry required to transfer units from the Assembly Depart- ment to the Packaging Department during March.

5.      Compute the costs assigned to ending inventory in the Assembly Department on March 31.

 

 

 

 

b.       Complete the following requirements for the Packaging Department:

1.      Prepare a schedule showing units started and completed in the Packaging Department during March.

2.      Compute the equivalent units of direct materials and conversion for the Packaging Depart- ment in March. Direct materials include both those transferred in from the Assembly Department and those added by the Packaging Department.

3.      Determine the cost per equivalent unit of input resource for the Packaging Department during March.

4.      Prepare the summary journal entry required to transfer units from the Packaging Depart- ment to Finished Goods Inventory during March.

5.     Compute the costs assigned to ending inventory in the Packaging Department on March 31.