Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Textbook Question
Chapter 4, Problem 31P
Goodson Corporation assembles various components used in the telecommunications industry. The company’s major product, a relay switch, is the result of assembling three parts: XY634, AA788, and GU321. The following information relates to activities of April:
- Beginning work-in-process inventory: 4,000 units, 75 percent complete as to conversion; cost, $286,000 (direct materials, $220,000; conversion cost, $66,000).
- Production started: 25,000 units.
- Production completed: 24,000 units.
- Ending work-in-process inventory: 5,000 units, 40 percent complete as to conversion.
- Direct materials used: XY634, $267,000; AA788, $689,000; GU321, $448,000.
- Hourly wage of direct laborers, $20; total direct-labor payroll, $126,500.
Overhead application rate: $60 per direct-labor hour.
All parts are introduced at the beginning of Goodson’s manufacturing
Required:
- 1. Calculate the total cost of direct material and conversion during April.
- 2. Determine the cost of goods completed during the month.
- 3. Determine the cost of the work-in-process inventory on April 30.
- 4. With regard to the ending work-in-process inventory:
- a. How much direct-material cost would be added to these units in May?
- b. What percentage of conversion would be performed on these units in May?
- 5. Assume that the relay switch required the addition of another part (HH887) at the 70 percent stage of completion. How many equivalent units with respect to part HH887 would be represented in April’s ending work-in-process inventory?
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Chapter 4 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 4 - Explain the primary differences between job-order...Ch. 4 - List five types of manufacturing in which process...Ch. 4 - Prob. 3RQCh. 4 - What are the purposes of a product-costing system?Ch. 4 - Define the term equivalent unit and explain how...Ch. 4 - List and briefly describe the purpose of each of...Ch. 4 - Show how to prepare a journal entry to enter...Ch. 4 - Prob. 8RQCh. 4 - Prob. 9RQCh. 4 - Prob. 10RQ
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