Question

BDB Company manufactures its one product by a process that requires two departments. The production starts in Department A and is completed in Department B. Direct materials are added at the beginning of the process in Department A. Additional direct materials are added when the process is 50% complete in Department B. Conversion costs are incurred proportionally throughout the production processes in both departments. On April 1, Department A had 500 units in Work-in-Process estimated to be 30% complete for conversion; Department B had 300 units in Work-in-Process estimated to be 40% complete for conversion. During April, Department A started 2,000 units and completed 2,100 units; Department B completed 2,000 units. The ending Work-in-Process Inventory on April 30 in Department A is estimated to be 50% complete for conversion, and the ending Work-in-Process Inventory in Department B is estimated to be 70% complete for conversion. The cost sheet for Department A shows that the units in the beginning Work-in-Process Inventory had $3,740 in direct materials costs and $1,728 in conversion costs. The production costs incurred in April were $19,260 for direct materials and $23,250 for conversion. Department B’s beginning Work-in-Process Inventory on April 1 was $4,588, of which $2,850 was transferred-in costs; it incurred $40,080 in direct materials costs and $25,622 in conversion costs in April. BDB Company uses the weighted-average method for Departments A and B.

Required:

1. Prepare a production cost report for Department A.

2. Prepare a production cost report for Department B

Answer 1

DEPARTMENT A
UNITS TO ACCOUNT FOR:
Beginning Work in Process units				500
Add: Units Started in Process				2,000
Total Units to account for:				2,500
UNITS TO BE ACCOUNTED FOR:
Units started and completed				2,100
Ending Work in Process				400
Total Units to be accounted for:				2,500
Equivalent Units:
			Material Cost		Conversion
			% Completion	Units	% Completion	Units
Units started and completed			100%	2,100	100%	2,100
Ending Work in Process			100%	400	50%	200
Total Equivalent units				2,500		2,300
TOTAL COST TO ACCOUNT FOR:
			Material		Conversion
Beginning work in Process			3,740		1,728
Cost Added during May			19,260		23,250
Total Cost to account for:			23,000		24,978
Total Cost to account for:					47,978
COST PER EQUIVALENT UNIT:
			Material		Conversion
Total cost added during the year			23,000		24,978
Equivalent Units			2,500		2,300
Cost per Equivalent unit			9.2		10.86
TOTAL COST ACCOUNTED FOR:
Units started and Transferred out (2,100 units)
			Equivalent unit	Cost per EU	Total Cost
Material			2,100	9.2	19320
Conversion Cost			2,100	10.86	22806
Total Cost of Units completed and transferred out:					42126
Ending Work in process (400 units)
			Equivalent unit	Cost per EU	Total Cost
Material			400	9.2	3680
Conversison Cost			200	10.86	2172
Total cost of Ending Work in process:					5,852
Department-B
UNITS TO ACCOUNT FOR:
Beginning Work in Process units				300
Add: Units Started in Process				2,100
Total Units to account for:				2,400
UNITS TO BE ACCOUNTED FOR:
Units started and completed				2,000
Ending Work in Process				400
Total Units to be accounted for:				2,400
Equivalent Units:
			Material Cost		Conversion
			% Completion	Units	% Completion	Units
Units started and completed			100%	2,000	100%	2,000
Ending Work in Process			100%	400	70%	280
Total Equivalent units				2,400		2,280
TOTAL COST TO ACCOUNT FOR:
			Material		Conversion
Beginning work in Process			1,738		2,850
Cost Added during May			40,080		25,622
Total Cost to account for:			41,818		28,472
Total Cost to account for:					70,290
COST PER EQUIVALENT UNIT:
			Material		Conversion
Total cost added during the year			41,818		28,472
Equivalent Units			2,400		2,280
Cost per Equivalent unit			17.424		12.49
TOTAL COST ACCOUNTED FOR:
Units started and Transferred out (2,000 units)
			Equivalent unit	Cost per EU	Total Cost
Material			2,000	17.424	34848
Conversion Cost			2,000	12.49	24980
Total Cost of Units completed and transferred out:					59828
Ending Work in process (400 units)
			Equivalent unit	Cost per EU	Total Cost
Material			400	17.424	6969.6
Conversison Cost			280	12.49	3497.2
Total cost of Ending Work in process:					10,467