Question

Cost of Production Report: No Beginning Inventories
Oregon Paper Company produces newsprint paper through a special recycling process using scrap paper products. Production and cost data for October 2009, the first month of operations for the company's new Portland plant, follow:

Units of product started in process during October	90,000 tons
Units completed and transferred to finished goods	75,000 tons
Machine hours operated	10,000
Direct materials costs incurred	$504,000
Direct labor costs incurred	$193,920

Raw materials are added at the beginning of the process for each unit of product produced, and labor and manufacturing overhead are added evenly throughout the manufacturing process. Manufacturing overhead is applied to Work-in-Process at the rate of $24 per machine hour. Units in process at the end of the period were 65 percent converted.

Prepare a cost of production report for Oregon Paper Company for October.

• Round answers to the nearest whole number unless otherwise noted.

• Do not use negative signs with your answers.

Oregon Paper Company Cost of Production Report For the Month Ending October 31, 2009
Summary of units in process (tons):
Beginning	Answer
Units started	Answer
In process	Answer
Completed	Answer
Ending	Answer
Equivalent units in process:		Materials	Conversion	Total
Units completed		Answer	Answer
Plus equivalent units in ending inventory		Answer	Answer
Equivalent units in process		Answer	Answer
Total cost to be accounted for and cost per equivalent unit in process:
Beginning work-in-process		Answer	Answer	Answer
Current costs		Answer	Answer	Answer
Total cost in process		Answer	Answer	Answer
Equivalent units in process		Answer	Answer
Cost per equivalent unit in process (Do not round answers.)		Answer	Answer	Answer
Accounting for total costs:
Transferred out				Answer
Ending work-in-process:
Materials			Answer
Conversion			Answer	Answer
Total cost accounted for				Answer

Answer 1

Solution:

	Physical units	Equivalent units
Quantities:	Materials	Conversion costs
Units to be Account for:
Beginning	0
Started in production	90000
Completed	75000
Ending	15000
Units accounted for:
Units completed		75000	75000
Ending equivalent units		15000	9750
Total units		90000	84750
Costs	Materials	Conversion costs	Total Costs
Unit Costs:
Beginning	$0	$0	$0
Current costs	$5,04,000	$4,33,920	$9,37,920
Total Costs	$5,04,000	$4,33,920	$9,37,920
Equivalent Units	90000	84750
Units Costs	$5.60	$5.12	$10.72
Costs to be accounted for:
Beginning			$0
Started into production			$9,37,920
Total Costs			$9,37,920
Cost Reconciliation Schedule:
Costs accounted for:
Transferred out			$8,04,000
Ending:
Material		$84,000
Conversion		$49,920	$1,33,920
Total Costs accounted for			$9,37,920