Question

The Swivel Chair Company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 145,000 chairs. During the month, the firm completed 175,000 chairs and transferred them to the Finishing Department. The firm ended the month with 18,000 chairs in ending inventory. All direct materials costs are added at the beginning of the production cycle. Weighted-average costing is used by Swivel.

How many chairs were in inventory at the beginning of the month? Conversion costs are incurred uniformly over the production cycle.

Answer 1

To find the beginning inventory for the Swivel Chair Company, add the chairs started to the ending inventory, then subtract the chairs completed. This provides a total of 12,000 chairs in beginning inventory.

Step-by-step explanation:

To calculate the number of chairs in inventory at the beginning of the month for the Swivel Chair Company, we can use the following information: The Assembly Department started production of 145,000 chairs and completed 175,000 chairs, which were transferred to the Finishing Department. They ended the month with 18,000 chairs in ending inventory. Since all direct materials costs are added at the beginning of the production cycle and the company uses weighted-average costing, we can deduce the beginning inventory by subtracting the amount of completed chairs from the combined total of starting production and ending inventory.

Here is the step-by-step breakdown:

1. Calculate the total number of chairs accounted for during the month, which is the sum of chairs started and chairs in ending inventory: 145,000 chairs started + 18,000 chairs in ending inventory = 163,000 chairs total.
2. Determine the number of chairs in beginning inventory by subtracting the number of completed chairs from the total number of chairs accounted for: 163,000 chairs total - 175,000 completed chairs = -12,000 chairs.
3. Since a negative inventory is not possible, we infer that the calculation indicates the number of additional chairs finished more than those started and in ending inventory. Therefore, 12,000 chairs were in inventory at the beginning of the month.

Conversion costs are mentioned as incurred uniformly over the production cycle, but they are not relevant to this particular calculation as we are focused on chair counts rather than cost allocation.