Question

In: Accounting

Kitty Inc. processes fish for various cat food distributors. Two departments are involved Department 1 and...

Kitty Inc. processes fish for various cat food distributors. Two departments are involved Department 1 and Department 2. Data relating to kilograms of Cat Food processed in Department 1 during July are presented below:

Kg. of Cat Food

Percentage Completed

WIP, May 1st

20,000

30%

Started into process during May

380,000

-

WIP, May 31st

25,000

60%

All materials are added at the beginning of processing in Department 1. Labour and overhead (conversion) costs are incurred uniformly throughout processing.

Required:

  1. Prepare quantity schedules and a computation of equivalent units for July for Department 1 according to the weighted average cost method of accounting for units.

Solutions

Expert Solution

Kitty Inc.
Production Cost Report (Extracts)
For the month ended July 31
Actual Units
Calculation of Physical UNITS:
Units in beginning inventory            20,000
Units started during the period          380,000
Units to be accounted for          400,000
Actual Units Equivalent Units
Material CONVERSION
Units Completed and Transferred          375,000          375,000          375,000
Units in ending inventory            25,000            25,000            15,000
Equivalents Units of production          400,000          400,000          390,000
Material CONVERSION
Equivalents Units of production          400,000          390,000

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