Question

The Sanding Department of Quik Furniture Company has the following production and manufacturing cost data for March 2017, the first month
of operation.
	Production: 7,000 units finished and transferred out; 3,000 units started that are 100% complete as to
	materials and 20% complete as to conversion costs.
	Manufacturing costs: Materials $33,000; labor $21,000; overhead $36,000.
Instructions
Prepare a production cost report.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .
QUIK FURNITURE COMPANY
Sanding Department
Production Cost Report
For the Month ended March 31, 2017
					Equivalent Units
Quantities				Physical Units	Materials	Conversion Costs
Units to be accounted for
Work in process, March 1				Value
Started into production				Value
Total units				?
Units accounted for
Transferred out				Value	Value	Value
Work in process, March 31				Value	Value	?
Total units				?	?	?
Costs				Materials	Conversion Costs	Total
Unit costs
Total cost(a)				?	?	?
Equivalent units (b)				Value	Value
Unit costs (a) ÷ (b)				?	?	?
Costs to be accounted for
Work in process, March 1						Value
Started into production						Value
Total costs						?
Cost Reconciliation Schedule
Cost accounted for
Transferred out						Value
Work in Process, March 31
Materials					Value
Conversion costs					Value	?
Total costs						?
										​

Answer 1

Solution:

Computation of Equivalent unit of Production - Sanding Department
Particulars	Physical Units	Material	Conversion
Unit completed & Transferred out	7000	7000	7000
Closing WIP:	3000
Material (100%)		3000
Conversion (20%)			600
Equivalent units of production	10000	10000	7600

Computation of Cost per equivalent unit of Production - Sanding Department
Particulars	Material	Conversion
Opening WIP	$0.00	$0.00
Cost Added during March	$33,000.00	$57,000.00
Total cost to be accounted for	$33,000.00	$57,000.00
Equivalent units of production	10000	7600
Cost per Equivalent unit	$3.30	$7.50

Computation of Cost of ending WIP and units completed & transferred out - Sanding Department
Particulars	Material	Conversion	Total
Equivalent unit of Ending WIP	3000	600
Cost per equivalent unit	$3.30	$7.50
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit)	$9,900	$4,500	$14,400
Units completed and transferred	7000	7000
Cost of units completed & Transferred (Unit completed * cost per equivalent unit)	$23,100	$52,500	$75,600

Cost Reconciliation - Sanding Department
Particulars	Amount
Costs to be accounted for:
Cost of beginning WIP inventory	$0.00
Cost added to production ($33,000 + $57,000)	$90,000.00
Total Cost to be accounted for	$90,000.00
Costs accounted for as follows:
Cost of unit transferred out	$75,600
Ending WIP:
Material	$9,900
Converison	$4,500
Total cost accounted for	$90,000