Equivalent Units of Production – Cutting & Coating Department

Accessory World makes floor mats for the automobile industry. Finished sets of mats must pass
through two departments: Cutting and Coating. Large sheets of synthetic material are cut to size in
the Cutting Department and then transferred to the Coating Department, where each set is sprayed
with a chemical coating for improved durability. The following information pertains to May activity
in the Cutting Department:

Cost data:
Total cost of beginning inventory on May 1 . . . . . . . . . . . . . . . . . . . . . . . . . $ 44,800
Direct materials costs incurred in May. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000
Conversion costs incurred in May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,200
Physical units data:
Units in process, May 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000 sets
Units started in May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000 sets
Units in process, May 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000 sets
Percentage of completion data:
Direct materials, May 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100%
Conversion, May 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Direct materials, May 31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100%
Conversion, May 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

a. Prepare a schedule showing: (1) the number of mat sets transferred from the Cutting Department
to the Coating Department in May, and (2) the number of mat sets started and completed
by the Cutting Department in May.

b. Compute the equivalent units of input resources for the Cutting Department in May.

c. Compute the cost per equivalent unit of input resource for the Cutting Department in May.

d. Prepare the summary journal entry required to transfer the cost of completed mat sets from the
Cutting Department to the Coating Department in May.

e. Compute the total cost assigned to the Cutting Department’s ending inventory on May 31.

E18.11

Exercise 18.11 is an extension of Exercise 18.10.
The following information pertains to May activity in Accessory World’s Coating Department:

Cost data:
Total cost of beginning inventory on May 1 . . . . . . . . . . . . . . . . . . . . . . . . . $45,300
Direct materials costs incurred in May. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,925
Conversion costs incurred in May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,525
Cut sets transferred in during May. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ?
Physical units data:
Units in process, May 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000 sets
Units started in May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ? sets
Units in process, May 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000 sets
Percentage of completion data:
Direct materials, May 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60%
Conversion, May 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Cut sets transferred in, May 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ?
Direct materials, May 31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70%
Conversion, May 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Cut sets transferred in, May 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ?

a. Compute how many cut mat sets were started in the Coating Department during May.

b. Prepare a schedule showing: (1) the number of mat sets transferred out of the Coating Department
in May, and (2) the number of mat sets started and completed by the Coating Department
in May.

c. Compute the equivalent units of input resources for the Coating Department in May.

d. Compute the cost per equivalent unit of input resource for the Coating Department in May.

e. Prepare the summary journal entry required to transfer the cost of finished mat sets from the
Coating Department’s Work in Process Inventory to the company’s Finished Goods Inventory in
May.

f. Compute the total cost assigned to the Coating Department’s ending inventory in process on
May 31.