Question
In: Accounting
Eire Products is a specialty lubricants company. The Lake Plant produces a single product in three...
Eire Products is a specialty lubricants company. The Lake Plant produces a single product in three departments: Filtering, Blending, and Packaging. Additional materials are added in the Blending Process when units are 50 to 55 percent complete with respect to conversion. Information for operations in June in the Blending process appear as follows.
Work in process on June 1 consisted of 9,000 barrels with the following costs.
|
|
Amount |
Degree of completion |
||
|
Filtering costs transferred in |
$ 11,700 |
100% |
||
|
Cost added in Blending |
||||
|
Direct materials |
$ - |
0% |
||
|
Conversion costs |
$ 18,335 |
30% |
||
|
Work in process June 1 |
$ 30,035 |
|||
During June, 116,000 barrels were transferred in from Filtering at a cost of $150,800. The following costs were added in Blending in June.
|
Direct materials |
$ 387,500 |
|
Conversion costs |
$ 538,265 |
|
Total costs added |
$ 925,765 |
Blending finished 115,000 barrels in June and transferred them to Packaging. At the end of June, there were 10,000 barrels in work-in-process inventory. The units were 60 percent complete with respect to conversion costs. The Blending Department uses FIFO method of process costing.
Required: Prepare a cost of production report for Blending department for June.
|
A |
B |
C |
D |
|
|
1 |
(Step 1) |
(Step 2) Equivalent Units |
||
|
2 |
||||
|
3 |
Flow of production |
Physical units |
Direct Material |
Conversion Cost |
|
4 |
Beginning WIP |
9,000 |
Work done before current period |
|
|
5 |
Started during current period |
116,000 |
||
|
6 |
To Account For |
125,000 |
||
|
7 |
Completed and transferred out during current period: |
115,000 |
||
|
8 |
From beginning WIP |
9,000 |
||
|
9 |
{9000 x (100% -50%); 9000 x (100% - 55%) |
4500 |
4950 |
|
|
10 |
Started and completed |
106,000 |
||
|
11 |
(106,000 x 100%; 106,000 x 100%) |
106,000 |
106,000 |
|
|
12 |
Ending WIP |
10,000 |
||
|
13 |
10,000 x 100%; 10,000 x 60% |
10,000 |
6,000 |
|
|
14 |
Accounting for |
125,000 |
||
|
15 |
Equivalent units of work done in current period |
120,500 |
116,950 |
|
|
16 |
||||
|
Total Production Costs |
Direct Material |
Conversion Costs |
|||
|
Step 3 |
Beginning WIP |
+ |
|||
|
Cost added in current period |
+ |
||||
|
Total costs to account for |
+ |
||||
|
Step 4 |
Cost added in current period |
||||
|
Divide by equivalent units of work done in current period |
|||||
|
Costs per equivalent unit of work done in current period |
|||||
|
Step 5 |
Assignment of costs: |
||||
|
Completed and transferred out |
|||||
|
Beginning WIP |
+ |
||||
|
Costs added to beginning WIP in current period |
+ |
||||
|
Total from beginning inventory |
|||||
|
Started and completed |
+ |
||||
|
Total cost of units completed and transferred out |
|||||
|
Ending WIP |
+ |
||||
|
Total costs accounted for |
+ |
||||
Solutions
Expert Solution
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| Eire Products | |
| Started and completed in June: | Whole Units |
| Units completed in June | 115,000.00 |
| Less: Opening Inventory | 9,000.00 |
| Started and completed in June: | 106,000.00 |
| Eire Products | |||||
| Blending Process | |||||
| Cost of Production Report- FIFO | Equivalent Units | ||||
| Whole Units | Total costs | Prior Departmental costs | Materials | Conversion | |
| Flow of production of units: | |||||
| Units charged to production: | |||||
| Opening Inventory in process | 9,000.00 | ||||
| Units started in June | 116,000.00 | ||||
| Total units to be accounted for | 125,000.00 | ||||
| Units accounted for | |||||
| Units completed and transferred out | |||||
| From beginning Inventory | 9,000.00 | - | 9,000.00 | 6,300.00 | |
| Started and completed currently | 106,000.00 | 106,000.00 | 106,000.00 | 106,000.00 | |
| Units ending in WIP Inventory | 10,000.00 | 10,000.00 | 10,000.00 | 6,000.00 | |
| Total Units accounted for | 125,000.00 | 116,000.00 | 125,000.00 | 118,300.00 | |
| Costs to be accounted for | |||||
| Costs in beginning WIP Inventory | 30,035.00 | 11,700.00 | - | 18,335.00 | |
| Current period costs | 1,076,565.00 | 150,800.00 | 387,500.00 | 538,265.00 | |
| Total costs to be accounted for | 1,106,600.00 | 162,500.00 | 387,500.00 | 556,600.00 | |
| Costs per equivalent unit | |||||
| Prior Departmental costs | 1.30 | ||||
| Materials | 3.10 | ||||
| Labor | 4.55 | ||||
| Manufacturing Overhead | |||||
| Costs accounted for | |||||
| Costs assigned to units transferred out | |||||
| Costs from beginning WIP inventory | 30,035.00 | 11,700.00 | - | 18,335.00 | |
| Current costs added to complete beginning WIP inventory | |||||
| Prior Departmental costs | - | - | |||
| Materials | 27,900.00 | 27,900.00 | |||
| Labor | 28,665.00 | 28,665.00 | |||
| Manufacturing Overhead | - | ||||
| Total costs from beginning inventory | 86,600.00 | ||||
| Current costs of units started and completed | |||||
| Prior Departmental costs | 137,800.00 | 137,800.00 | |||
| Materials | 328,600.00 | 328,600.00 | |||
| Labor | 482,300.00 | 482,300.00 | |||
| Manufacturing Overhead | - | ||||
| Total costs of units started and completed | 948,700.00 | ||||
| Total Costs of units transferred out | 1,035,300.00 | ||||
| Costs assigned to ending WIP inventory | |||||
| Prior Departmental costs | 13,000.00 | 13,000.00 | |||
| Materials | 31,000.00 | 31,000.00 | |||
| Labor | 27,300.00 | 27,300.00 | |||
| Manufacturing Overhead | - | ||||
 ekkarill92 answered 2 years agoRelated SolutionsEire Products is a specialty lubricants company. The Lake Plant produces a single product in three...Eire Products is a specialty lubricants company. The Lake Plant
produces a single product in three departments: Filtering,
Blending, and Packaging. Additional materials are added in the
Blending Process when units are 50 to 55 percent complete with
respect to conversion. Information for operations in June in the
Blending process appear as follows.
Work in process on June 1 consisted of 12,000 barrels with the
following costs.
Amount
Degree of Completion
Filtering costs transferred in
$
11,440
100
%
Costs...
Eire Products is a specialty lubricants company. The Lake Plant produces a single product in three...Eire Products is a specialty lubricants company. The Lake Plant
produces a single product in three departments: Filtering,
Blending, and Packaging. Additional materials are added in the
Blending Process when units are 50 to 55 percent complete with
respect to conversion. Information for operations in June in the
Blending process appear as follows.
Work in process on June 1 consisted of 9,000 barrels with the
following costs.
Amount
Degree of completion
Filtering costs transferred in
$
11,700
100%
Cost...
Eire Products is a specialty lubricants company. The Lake Plant produces a single product in three...Eire Products is a specialty lubricants company. The Lake Plant
produces a single product in three departments: Filtering,
Blending, and Packaging. Additional materials are added in the
Blending Process when units are 50 to 55 percent complete with
respect to conversion. Information for operations in June in the
Blending process appear as follows.
Work in process on June 1 consisted of 9,000 barrels with the
following costs.
Amount
Degree of completion
Filtering costs transferred in
$ 11,700
100%
Cost added...
Eire Products is a specialty lubricants company. The Lake Plant produces a single product in three...Eire Products is a specialty lubricants company. The Lake Plant
produces a single product in three departments: Filtering,
Blending, and Packaging. Additional materials are added in the
Blending Process when units are 50 to 55 percent complete with
respect to conversion. Information for operations in June in the
Blending process appear as follows.
Work in process on June 1 consisted of 12600 barrels with the
following costs.
Amount
Degree of Completion
Filtering costs transferred in
$
11620
100
%
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Eire Products is a speciality lubricants company. The Lake plant produces a single product in three...Eire Products is a speciality lubricants company. The Lake plant
produces a single product in three departments: filtering,
blending, and packaging. Additional materials are added in the
blending process when units are 50 to 55 % complete with respect to
conversion. Information for operations in June in the Blending
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