Caulfield Ltd

Essay

Caulfield Ltd. has two production departments in the manufacturing of its products. In the first department, Fabricating, component parts are manufactured. In the second department, Assembly, the components are assembled and finished. Direct materials are added at the start of production in Fabricating and at the 90% point of the process in Assembly. During July the beginning work-in-process of 50,000 units in the Fabricating Department was 40% complete with respect to conversion. The Assembly Department had 38,000 units in beginning work in process; these units were 85% complete with respect to conversion. On July 31, the ending work-in-process inventory was 20% complete in the Fabricating Department and 40% complete in the Assembly Department. Conversion costs are added evenly throughout both departments.
Beginning work-in-process in the Fabricating Department had costs assigned of $290,000 for direct materials and $52,000 for conversion. In the Assembly Department, the beginning work in process included $318,440 for transferred-in costs and $8,550 for conversion costs. Additional information about the two departments follows:
Required:
Determine the assignment of costs to units transferred-out and ending inventory , using weighted-average for the Assembly Department and FIFO for the Finishing Department.