Wilson Company manufactures its product on an assembly line. The firm began production in year…

Wilson Company manufactures its product on an assembly line. The firm began production in year one. During the year, work was begun on 45,000 units. The assembly line has 1,000 “slots,” so at the end of year one, WIP ending consisted of 1,000 units 50% complete. In year two, the firm started 50,000 units and ended the year with a full assembly line estimated to be 50% complete. A slowdown occurred during year three, so the firm started only 25,000 units. Nonetheless, year three ended with the assembly line full, and the units were estimated to be 50% complete. Direct materials are added at the beginning of the process, and conversion costs are incurred evenly throughout production.

 

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