Question

We produce picture frames for stores such as Michael’s and Hobby Lobby. In the assembly department, the wooden slats are added at the beginning of the process, and the glass is added when the process is 25% complete. Conversion costs are added evenly throughout the period. Here is the data related to the assembly department for November 2018:

WIP, November 1 (40% complete) 60 frames

Started in November 500 frames

WIP, November 30 (15% complete) 100 frames

Costs included in the Beginning WIP:

DM - wooden slats $ 300

DM - glass $ 180

CC $ 168

Costs added during November:

DM - wooden slats $ 2,950

DM - glass $ 1,500

CC $ 3,580

Note: When calculating equivalent units (Step 2), total costs (Step 3), and cost per equivalent unit (Step 4), you will have 3 columns - DM slats, DM glass, and CC. Therefore, when you assign costs in Step 5, you’ll assign all 3 costs for each layer

Using FIFO:

b. Prepare the 5-step Production Cost Report.

Update the T-accounts to reflect the amounts transferred out and the amounts in Ending WIP.

Answer 1

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