In: Accounting
Terry Linens, Inc., manufactures bed and bath linens. The Bath
Linens Department
sews terry cloth into towels of various sizes. Terry uses the
weighted average method.
All materials are added at the beginning of the process. The
following data are for
the Bath Linens Department for August:
Production:
Units in process, August 1, 25 percent
complete* 10,000
Units completed and transferred
out
60,000
Units in process, August 31, 60 percent
complete* 20,000
Costs:
Work in process, August 1:
Materials $49,000
Conversion costs 2,625
Total
$51,625
Current costs:
Materials $351,000
Conversion costs 78,735
Total
$429,735
*With respect to conversion costs
Required
1. Prepare a physical flow schedule for the Bath Linens
Department for August.
2. Calculate equivalent units of production for the Bath Linens
Department for August.
3. Calculate unit cost for materials, for conversion, and in total
for the Bath Linens Department for August.
4. Calculate the cost of units transferred out and the cost of
ending work in process.
5. Prepare a cost reconciliation for the Bath Linens Department for
August.
6. Prepare a cost of production report for the Bath Linens
Department for August using the weighted average method.