units transferred out $40,000 and ending work in process 5,000 units that are 100% complete for materials and 40% complete for conversion costs. If unit materials cost is $4 and unit conversation cost is $7, determine the costs to be assigned to the units transferred out the units in ending work in process.
BE3-7 – Production costs chargeable to the Finishing Department in June in Cascio Company are materials $16,000, labor $29,500, overhead $18,000. Equivalent units of production are materials 20,000 and conversion costs 19,000. Compute the unit costs for materials and conversion costs.
BE3-8 – Data for Cascio Company are given in BE3-7. Production records indicate that 18,000 units were transferred out, and 2,000 units in ending work in process were 50% completed as to conversion cost and 100% complete as to materials. Prepare a cost reconciliation schedule.
Exercise: E3-7
E3-7–The Sanding Department of Richards Furniture Company has the following production and manufacturing cost data for March 2014, the first month of operation.
Production: 9,000 units finished and transferred out; 3,000 units started that are 100% completed as to materials and 20% complete as to conversion cost.
Manufacturing costs: Materials $33,000; labor $24,000; overhead $36,000
Instructions
Prepare a production cost report.

Brief Exercises: BE4-2, BE4-8
BE4-2 –Finney Inc. has conducted an analysis of overhead costs related to one of its product lines using a traditional costing system (volume-based) and activity-based costing system. Here are its results.
Traditional Costing        ABC
Sales revenue                $600,000        $600,000
Overhead costs:
Product RX3                $34,000        $50,000
Product Y12                  36,000        20,000
$70,000        $70,000
Explain how a difference in the overhead costs between the two systems may have occurred.
BE4-8–Rich Novelty Company identified the following activities in its production and support operations. Classify each of these activities as either valued-added or non-value-added.
a)    Machine setup
b)    Design engineering
c)    Storing inventory
d)    Moving work in progress
e)    Inspecting and testing
f)    Painting and packing

Exercise: E4-10
E4-10 – Wilmington, Inc. manufactures five models of kitchen appliances at its Mesa plant. The company is installing activity-based costing and has identified the following activities performed at its Mesa plant.
1.    Designing new models
2.    Purchasing raw materials and parts
3.    Storing and managing inventory
4.    Receiving and inspecting raw materials and parts
5.    Interviewing and hiring new personnel.
6.    Machine forming sheet steel into appliances parts
7.    Manually assembling parts into appliances
8.    Training all employees of the company
9.    Insuring all tangible fixed assets
10.    Supervising production.
11.    Maintaining and repairing machinery and equipment.
12.    Painting and packaging finished appliances.

Having analyzed its Mesa plant operations for purposes of installing activity-based costing, Wilmington, Inc. identified its activity cost centers. It now needs to identify relevant activity cost drivers in order to assign overhead costs to its products.

Using the activities listed above; identify for each activity one or more cost drivers that might be used to assign overhead costs to its products.

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