Question

Tree Top Company manufactures a single product and uses a process costing system. On the first day of April, there were 5,000 units in process that were 100% complete as to direct materials and 50% complete as to direct labor and manufacturing overhead. During the month of April, the company began production of 100,000 units, and at the end of April, the Work-in-Process inventory consisted of 2,000 units that were 100% complete as to direct materials and 80% complete as to direct labor and manufacturing overhead. The company’s cost information is as follows:

	Beginning Work-in-Process	Costs Added In April
Direct materials	$3,000	$65,250
Direct labor	$125	$6,151
Manufacturing overhead	$175	$7,147

Calculate the cost of units manufactured during April and the cost of Work-in-Progress at the end of April.

Answer 1

Cost of units manufactured during April and the cost of Work-in-Progress at the end of April is as calculated below:

Tree Top Company
Cost of production Report
Month ended April 30
	Equivalent Units
Flow of Production	Flow of physical units	Direct material	Conversion Cost
Units to account for:
Beginning WIP	5,000
Transferred in	100,000
Total physical units to account for	105,000
Units accounted for:
Beginning inventory	5,000	0	2,500
Started and completed in April	98,000	98,000	98,000
Transferred Out	103,000	98,000	100,500
Ending WIP	2,000	2,000	1600
Total units to be assigned cost	105,000	100,000	102,100
Cost per equivalent unit
Total Cost for April		65,250	13,298
Total equivalent units		100,000	102,100
Cost per equivalent unit		0.65	0.13
Cost charged to production	Direct Material	Conversion	Total
Inventory in proces, April 1			3,300
Cost incurred in April			78,548
Total cost accounted			81,848
Cost allocated
Inventory in proces, April 1			3,300
To complete inventory in processss, April 1	0	326	326
Cost of completed April 1 WIP			3,626
Started and completed in April	63,945	12,764	76,709
Cost of units manufactured			80,335
Cost of Work in process	1,305	208	1,513
			81,848