(SOLVED)- Bigears Telco Ltd assembles various components used in the telecommunication


Question Description:

$20

Bigears Telco Ltd assembles various components used in the telecommunication industry. The company’s major product, a relay switch, is made by assembling three parts: XY634, AA788 and GU321. The following information relates to activities in April:
■ Beginning work in process inventory: 4000 units, 75 per cent complete as to conversion; cost. $286,000 (direct materials, $220,000; conversion cost. 866,000)
■ Production started: 25,000 units
■ Production completed: 24,000 units
■ Ending work in process inventory: 5000 units, 40 per cent complete as to conversion
■ Direct materials used: XY634, $267,000; AA788, $689,000; GU321. $448,000
■ Hourly wage of direct labourers, $20; total direct labour payroll, $126,500
■ Overhead application rate: 860 per direct labour hour
All parts are introduced at the beginning of Bigears’ manufacturing process; conversion costs are incurred uniformly throughout the production process. The company uses weighted average cost to allocate costs to production.
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 (HH1887) at the 70 per cent stage of completion. I-low many equivalent units with respect to part HH1887 would be represented in April’s ending work in process inventory?

Answer

$20