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Belt Buckle Production Cost Analysis

Ro-Day-O Inc. manufactures belt buckles using a single-step production process. The company began August with 200,000 units in work-in-process that were 80% complete for labor, started 1,000,000 new units, and ended with 300,000 units in inventory that were 50% complete for labor. Schedules were prepared to calculate equivalent units and unit production costs for material and labor, which were then used to determine the costs assigned to completed units and ending inventory.

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479 views6 pages

Belt Buckle Production Cost Analysis

Ro-Day-O Inc. manufactures belt buckles using a single-step production process. The company began August with 200,000 units in work-in-process that were 80% complete for labor, started 1,000,000 new units, and ended with 300,000 units in inventory that were 50% complete for labor. Schedules were prepared to calculate equivalent units and unit production costs for material and labor, which were then used to determine the costs assigned to completed units and ending inventory.

Uploaded by

mohitgaba19
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as XLSX, PDF, TXT or read online on Scribd
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(WA EUP & cost assignment) Ro-Day-O Inc. manufactures belt buckles in a single-step production process.

The following in

Whole Units
Beginning work in process 200,000
Units started during period 1,000,000
Units in ending inventory 300,000
Beginning inventory units were 100 percent complete as to material and 80 percent complete as to labor. The ending inve
a. Prepare a schedule to compute equivalent units of production by cost component assuming the weighted average met
b. Determine the unit production costs for material and conversion.
c. Calculate the costs assigned to completed units and ending inventory for August2010.

Whole Units
Beginning work in process 200,000
Units started during period 1,000,000
Total Units 1,200,000
Answer A
Equivalent Units
Units
Finished Units 900,000
(Beginning work in process add Units started less ending work in process)
Units in ending inventory 300,000

Equivalent Units 1,200,000

Answer B
Material
Beginning work in process $ 1,200,000
add: costs incurred during the period $ 7,800,000
Total costs $ 9,000,000
divide by equivalent units 1,200,000
Cost per equivlent unit $ 7.50

Answer C
Cost of finished units
Material
Units 900,000
multiply by cost per equivalent unit $ 7.50
Total Value $ 6,750,000

Cost of ending work in process


Material
Units 300,000
multiply by cost per equivalent unit $ 7.50
Total Value $ 2,250,000
single-step production process. The following information is available for June2010:
Cost of
Material Cost of Labor
$1,200,000 $1,728,000
7,800,000 9,612,000

0 percent complete as to labor. The ending inventory units were 100 percent complete as to material and 50 percent complete as to la
mponent assuming the weighted average method.

August2010.

Material Labor
900,000 900,000
(900,000 * 100 % complete) (900,000 * 100 % complete)
300,000 150,000
(300,000 * 100 % complete) (300,000 * 50 % complete)
1,200,000 1,050,000

Labor Total
$ 1,728,000 $ 2,928,000
$ 9,612,000 $ 17,412,000
$ 11,340,000 $ 20,340,000
1,050,000
$ 10.80

Labor Total
900,000
$ 10.80
$ 9,720,000 $ 16,470,000

Labor Total
150,000
$ 10.80
$ 1,620,000 $ 3,870,000 $ 20,340,000.00
and 50 percent complete as to labor. Overhead is applied to production at the rate of 60 percent of direct labor cost.
ct labor cost.

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