Question

Gato Industries mass produces ceramic vases to sell to flower shops around the country. They have several processing departments for their process cost system. The following information regards the Painting department during the month of August 2019:

	# Units	Materials	Conversion
Beginning Work-in-Process	6000	60%	50%
Ending Work-in-Process	4500	80%	50%
Units started during August	110,000

What are the total equivalent units of production for Material Costs for the month of August?

Corpus Corp. produces two types of handheld radio: Basic and Supreme. The following information shows the various activity levels related to the production of Basic and Supreme products:

	Basic	Supreme
Machine Hours	275,000	100,000
Equipment Setups	200	500
Customer Orders	12,000	7,500

Corpus Corp. calculated overhead rates for each of their cost pools:

• Order Size cost pool: $12 per machine hour
• Setup cost pool: $5,000 per equipment setup
• Customer Order cost pool: $23 per customer order

What is the total amount of overhead that will be allocated to the Basic radios?

Answer 1

1
To completed Beginning Work-in-Process	2400	=6000*(1-60%)
Units started and completed	105500	=110000-4500
Ending Work-in-Process	3600	=4500*80%
Equivalent units of production for Material Costs	111500
Alternatively, if weighted average method is used:
Units completed and transferred	111500	=6000+110000-4500
Ending Work-in-Process	3600	=4500*80%
Equivalent units of production for Material Costs	115100
2
Order Size cost pool	3300000	=275000*12
Setup cost pool	1000000	=200*5000
Customer Order cost pool	276000	=12000*23
Amount of overhead allocated to the Basic radios	4576000