Kasten Company manufactures bowling balls through two processes: Molding and Packaging

Problem 3-1A (P3-1A) Kasten Company manufactures bowling balls through two processes: Molding and Packaging. In the Molding Department, the urethane, rubber, plastics, and other materials are molded into bowling balls. In the Packaging Department, the balls are placed in cartons and sent to the finished goods warehouse. All materials are entered at the beginning of each process. Labor and manufacturing overhead are incurred uniformly throughout each process. Production and cost data for the Molding Department during June 2008 are presented below.

Production Data June
Beginning work in process units –0–
Units started into production 20,000
Ending work in process units 2,000
Percent complete—ending inventory 60%
Cost Data
Materials $198,000
Labor 50,400
Overhead 112,800
Total $361,200

Hint:
Complete four steps necessary to prepare a production cost report.

Instructions
(a) Prepare a schedule showing physical units of production.
(b) Determine the equivalent units of production for materials and conversion costs.
(c) Compute the unit costs of production.
(d) Determine the costs to be assigned to the units transferred and in process for June.
(e) Prepare a production cost report for the Molding Department for the month of June.

Check:
(c) Materials $9.90; CC $8.50
(d) Transferred out $331,200; WIP $30,000

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Ortega Industries Inc. manufactures in separate processes furniture for homes

Problem 3-2A (P3-2A) Ortega Industries Inc. manufactures in separate processes furniture for homes. In each process, materials are entered at the beginning, and conversion costs are incurred uniformly. Production and cost data for the first process in making two products in two different manufacturing plants are as follows.

Cutting Department
Plant 1 Plant 2
Production Data—July T12-Tables C10-Chairs
Work in process units, July 1 –0– –0–
Units started into production 20,000 16,000
Work in process units, July 31 3,000 500
Work in process percent complete 60 80
Cost Data—July
Work in process, July 1 $ –0– $ –0–
Materials 380,000 288,000
Labor 234,400 125,900
Overhead 104,000 96,700
Total $718,400 $510,600

Hint:
Complete four steps necessary to prepare a production cost report.

Instructions
(a) For each plant:

1. Compute the physical units of production.
2. Compute equivalent units of production for materials and for conversion costs.
3. Determine the unit costs of production.
4. Show the assignment of costs to units transferred out and in process.

Check:
(a) (1) T12: Transferred out 17,000 units; WIP 3,000 units
(2) T12: Materials 20,000 e.u.; CC 18,800 e.u.
(3) T12: Materials $19; CC $18
(4) T12: Transferred out $629,000; WIP $89,400

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