MacLean Handcraft is a manufacturer of picture frames for large retailers. Every picture frame passes through two departments: the assembly department and the finishing department. This problem focuses on the assembly department. The process-costing system at MacLean has a single direct-cost category (direct materials) and a single indirect-cost category (conversion costs). Direct materials are added when the assembly department process is 10% complete. Conversion costs are added evenly during the assembly department's process. MacLean uses the weighted-average method of process costing. Consider the following data for the assembly department in April 2020.
Requirement 1. Summarize total assembly department costs for April 2020, and assign them to units completed (and transferred out) and to units in ending work in process inventory.
Begin by calculating the physical units and equivalent units.
Flow of Production
Work in process, beginning
Started during current period
To account for
Completed and transferred out during current period
Work in process, ending
Accounted for
Equivalent Units
Physical
Units
Direct
Materials
Conversion
Costs
Data table
Physical Units
(Frames)
Work in process, April 1ª
90
Direct
Materials
$1,155
Conversion
Costs
$1,307
Started during April 2020
515
Completed during April 2020
465
Work in process, April 30ᵇ
140
Total costs added during April 2020
$16,995
$10,189
ªDegree of completion: direct materials, 100%; conversion costs, 40%.
ᵇDegree of completion: direct materials, 100%; conversion costs, 10%.