Question

Marine Supply Company manufactures boat products. Its products move through two departments: development and packaging. Production and cost data for the packaging department are as follows:

Work in process inventory, March 1 (16,000 units)
Costs transferred in	$ 18,480
Materials cost	5,440
Conversion costs (30% complete)	3,584
Costs incurred in March
Transferred in (200,000 units)	$150,000
Materials cost	68,000
Conversion costs	112,000

All materials are added at the beginning of the packaging process. Ending inventory consists of 24,000 units, 100% complete as to materials and 60% complete as to conversion.

Prepare a production cost report for the packaging department for March. Use the average cost method.

(Use either format shown in Chapter 18 or in my Chapter 18 HW solution.)

Answer 1

Solution:

Production cost report-Weighted Avergae
	Physical Units	Total costs	transferred In	Materials	Conversion
Flow of Production units
Units to be accounted for:
Beginning WIP Inventory	16000
Units started this period	200000
Total Units to be accounted for	216000
Units Accounted for:
Units completed and transferred out
Total Transferred out	192000		192000	192000	192000
Units in ending WIP (100%, 90%,70%,35%)	24000		24000	24000	14400
Total units accounted for	216000		216000	216000	206400
Costs to be accounted for:
Costs in Beginning WIP inventory		$27,504	$18,480	$5,440	$3,584
Current period cost		$3,30,000	$1,50,000	$68,000	$1,12,000
Total Costs to be accounted for		$3,57,504	$1,68,480	$73,440	$1,15,584
Cost per equivalent unit:
Transferred in			$0.78
Materials				$0.34
Conversion					$0.56
Costs accounted for:
Costs assigned to the units transferred out:
Transferred in		$1,49,760	$1,49,760
Materials		$65,280		$65,280
Conversion		$1,07,520			$1,07,520
Total costs of units transferred out		$3,22,560
Costs assigned to Ending WIP Inventory:
Transferred in		$18,720	$18,720
Materials		$8,160		$8,160
Conversion		$8,064			$8,064
Total Ending WIP Inventory		$34,944
Total costs accounted for		$3,57,504	$1,68,480	$73,440	$1,15,584