(Hybrid costing) Pat Koontz makes necklaces from glass beads, metal beads, and natural beads. After reading about hybrid costing, she realized that the different types of necklaces did not cost the same amount of money to make, even though they took the same amount of time and effort to assemble. Koontz developed the following standard costs for each type of necklace: Glass Metal Natural
Beads $24 $15 $ 7
Direct labor (1.5 hours) 15 15 15
Overhead (based on 1.5 hours) 8 8 8
Total $47 $38 $30
Koontz began 2010 with no beginning WIP Inventory after she experienced an extreme holiday rush. During January, 130 necklaces were started: 70 were glass, 25 were metal, and 35 were natural. At the end of January, 25 necklaces were not yet complete: 5 glass,13 metal, and 7 natural. The stage of completion for each cost component for the 25 unfinished necklaces was as follows:
Material 100% complete
Conversion 60% complete
a. Calculate the cost of necklaces completed during January.
b. Calculate the cost of necklaces in ending WIP Inventory.

Pat Koontz

a. The cost of necklaces completed during January =  $96.16

b. The cost of necklaces in ending WIP inventory = $24.40

Explanation:

a) Data and Calculations:

                                                 Glass    Metal    Natural   Total

Beads                                        $24        $15        $ 7       $46

Direct labor (1.5 hours)                15          15          15         45

Overhead (based on 1.5 hours)   8            8           8         24

Total cost of production           $47       $38       $30      $115

                               Glass    Metal    Natural

Units started            70         25         35             130

Ending WIP                5          13           7               25

Units completed      65         12         28             105

Equivalent units:

                                 Glass             Metal             Natural

                            Mat. Conv      Mat. Conv      Mat. Conv

Units completed  65     65         12       12           28    28

Ending WIP            5        3         13        8              7      4

Equivalent units  70      68        25      20           35    32

Cost per equivalent unit:

                                            Glass                Metal               Natural

                                        Mat.   Conv      Mat.  Conv       Mat.  Conv  Total

Cost of production         $24    $23        $15     $23      $7      $23    $115

Equivalent units                70      68          25      20       35        32

Cost per equivalent     $0.42  $0.34     $0.60  $1.15  $0.20   $0.72

                                     Glass                Metal               Natural        Total

                                   Mat.   Conv      Mat.  Conv       Mat.  Conv

Cost per equivalent $0.42  $0.34   $0.60  $1.15    $0.20   $0.72

Equivalent units of

 Units completed      65     65         12       12           28    28

Units completed    $27.3  $22.1     $7.2   $13.8      $5.6  $20.16  $96.16

                                       Glass                Metal               Natural        Total

                                  Mat.   Conv      Mat.  Conv       Mat.  Conv

Cost per equivalent $0.42  $0.34   $0.60  $1.15    $0.20   $0.72

Ending WIP (equiva.)  5        3             13        8            7      4

Total cost                 $2.1    $1.02      $7.8    $9.2     $1.4    $2.88   $24.40

answer; how many employees will be needed for jobs in the coming period;