Massey Corporation Uses a Process Cost System and the Weighted-Average

question 86

Essay

Massey Corporation uses a process cost system and the weighted-average cost flow assumption. Production begins in the Fabricating Department where materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. On March 1 the beginning work in process inventory consisted of 20000 units which were 60% complete and had a cost of $175000 $145000 of which were materials costs. During March the following occurred: $$\begin{array} { l r } \text { Materials added } & \$ 305,000 \\\text { Conversion costs incurred } & \$ 120,000 \\\text { Units completed and transferred out in March } & 50,000 \\\text { Units in ending work in process March 31 (40\% complete) } & 25,000\end{array}$$ Instructions
Answer the following questions and show the computations that support your answers.
1. What are the equivalent units of production for materials and conversion costs in the Fabricating Department for the month of March?
2. What are the costs assigned to the ending work in process inventory on March 31?
3. What are the costs assigned to units completed and transferred out during March?

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Definitions:

High Switching Costs

High switching costs are barriers that prevent customers from changing products or services, due to financial, emotional, time-related, or effort-based factors.

Complex Backward Integration

A strategy where a company expands its role to fulfill tasks formerly completed by businesses up the supply chain, but with more intricate and multifaceted connections or processes.

Highly Specialized

Highly specialized refers to products, services, or roles that are focused on a narrow aspect, requiring specific knowledge or skills and catering to a particular niche or market segment.

Low Switching Costs

Low switching costs refer to the minimal barriers or expenses that consumers face when changing from one product, service, or provider to another, leading to higher competition among companies.