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Gianna's Office Supplies manufactures desk organizers in its Production Department. Direct materials are added at the...

Gianna's Office Supplies manufactures desk organizers in its Production Department. Direct materials are added at the beginning of the process and conversion costs are incurred evenly throughout the production cycle. Inspection takes place at the end of the process and spoiled units generally constitute 4% of the good units.

Data provided for April are as follows:

WIP, beginning inventory April 1 25,000 units

Direct materials (100% complete)

Conversion costs (50% complete)

Started during April 82,000 units

Completed and transferred out 81,000 units

WIP, ending inventory April 30 15,000 units

Direct materials (100% complete)

Conversion costs (25% complete)

Costs:

WIP, beginning inventory:

Direct materials $150,000

Conversion costs 44,000

Direct materials added 209,916

Conversion costs added 109,893

Required: Prepare a production cost report using weighted-average for the production department. Ensure you identify any spoilage in your report.

Solutions

Expert Solution

Physical Unit
Work In process Beginning 25000
Add: units started during the year 82000
Total units 107000
Good unit completed and transferred out during current period
Beginning work in process + Started and Completed 81000
Normal Spoilage (4% of good unit) 3240
Abnormal spoilage 7760
work in process ending 15000
Total units 107000
Equivalent units of production (EUP) - Weighted Average method
Detail Physical Units %Material EUP-Material % Conversion EUP- Conversion
Units Transferred Out 81000 100% 81000 100% 81000
Normal Spoilage 3240 100% 3240 100% 3240
Abnormal Spoilage 7760 100% 7760 100% 7760
units of Ending work in process 15000 100% 15000 25% 3750
Equivalent units of production 107000 95750
Cost per EUP Total Production Cost Direct Material Conversion
Cost of beginning Work in Process $194,000 $150,000 $44,000
Cost Addrd during the period $319,809 $209,916 $109,893
Total Cost to account for $513,809 $359,916 $153,893
/Equivalent units of Production 107000 95750
Cost per Equivalent unit of Production $3.3637 $1.6072
Cost Assignment and Reconciliation EUP Direct Material Total Production Cost Direct Material EUP
Conversion		 Conversion
Good units completed and transferred out
Good units completed and transferred out excluding normal spoilage 81000 $402,646.02 $272,459.78 81000 $130,186.25
Normal spoilage 3240 $16,105.84 $10,898.39 3240 $5,207.45
Total cost of good units completed and transferred out 84240 $418,751.86 $283,358.17 84240 $135,393.70
Ending work in process(EWP 490 D. Material,49 Conversion) 15000 $56,482.66 $50,455.51 3750 $6,027.14
Abnormal spoilage 7760 $38,574.48 $26,102.32 7760 $12,472.16
Total Costs accounted for 107000 $513,809.00 $359,916.00 95750 $153,893.00

ekkarill92 answered 2 years ago
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