Question

Sunland Industries Inc. manufactures dorm furniture in separate processes. In each process, materials are entered at the beginning, and conversion costs are incurred uniformly. Production and cost data for the first process in making a product are as follows.

		Cutting Department
Production Data—July		T12-Tables
Work in process units, July 1		0
Units started into production		24,200
Work in process units, July 31		3,630
Work in process percent complete		60
Cost Data—July
Work in process, July 1		$0
Materials		459,800
Labor		283,624
Overhead		125,840
Total		$869,264

(a1).

Compute the physical units of production.

(a2)

Compute equivalent units of production for materials and for conversion costs.
(a3)

Determine the unit costs of production.
(a4)

For each plant show the assignment of costs to units transferred out and in process

b.

Produce a production cost report

Answer 1

		Production Cost Report
		Equivalent Units
	Physical		Conversion
Quantities	Units	Materials	Costs
Units to be
accounted for
WIP, July 1	0	0	0
Started into	24200
production
Total Units	24200
Units accounted
for
Transferred Out	20570	20570	20570
WIP, July 31	3630	3630	2178
Total Units	24200	24200	22748

		Conversion
Costs	Materials	Costs	Total
Unit Costs
Total Costs	$ 4,59,800.00	$ 4,09,464.00	$ 8,69,264.00
Equivalent Units	24200	22748
Unit Costs	$            19.00	$            18.00	$             37.00
Costs to be
accounted for
WIP, July 1			$                    -
Started into
production			$ 8,69,264.00
Total			$ 8,69,264.00
Costs accounted
for
Transferred Out	(W.N.1)		$ 7,61,090.00
WIP, July 31	(W.N. 2)		$ 1,08,174.00
Total			$ 8,69,264.00

W.N.1
Cost of units transferred out
	Units	Cost/unit	Costs
Materials	20570	$   19.00	$ 3,90,830.00
Conversion	20570	$   18.00	$ 3,70,260.00
			$ 7,61,090.00

W.N.2
Cost of Closing WIP
	Units	Cost/unit	Costs
Materials	3630	$   19.00	$    68,970.00
Conversion	2178	$   18.00	$    39,204.00
			$ 1,08,174.00