Managerial Accounting: P4-37 Plattsburg Plastics Corporation manufactures a variety

Managerial Accounting

Problem 4-37
Plattsburg Plastics Corporation manufactures a variety of plastic products, including a series of molded chairs. The three models of molded chairs, which are all variations of the same design, are Standard (can be stacked), Deluxe (with arms), and Executive (with arms and padding). The company uses batch manufacturing and has an operation-costing system. The production process includes an extrusion operation and subsequent operations to form, trim and finish the chairs.

Plastic sheets are produced by the extrusion operation, some of which are sold directly to other manufacturers. During the forming operation, the remaining plastic sheets are molded into chair seats and the legs are added; the Standard model is sold after this operation. During the trim operation, the arms are added to the Deluxe and Executive models and the chair edges are smoothed. Only the Executive model enters the finish operation where the padding is added. All of the units produced receive the same steps within each operation. The March production run had a total manufacturing cost of $1,347,000. The units of production and direct material costs incurred were as follows:
Units produced Extrusion Materials Form Materials Trim Materials Finish Materials
Plastic sheets 10,000 90,000
Standard model 12,000 108,000 36,000
Deluxe model 6,000 54,000 18,000 13,500
Executive model 4,000 36,000 12,000 9,000 18,000
Total 32,000 288,000 66,000 22,500 18,000

Manufacturing costs applied during the month of March were as follows:
Extrusion Operation Form Operation Trim Operation Finish Operation
Direct labor 228,000 90,000 45,000 27,000
Manufacturing overhead 360,000 108,000 58,500 36,000

1. For each product produced by Plattsburg Plastics Corporation during the month of March, determine the ( a ) unit cost and ( b ) total cost. Be sure to account for all costs incurred during the month.(Carry out unit costs to three decimal places, i.e., a tenth of a cent.)
2. Prepare journal entries to record the flow of production costs during March.
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