Question

MVP Company has two departments. Its first department (the Melting Department) shows the following data for the month of August: Work in process, beginning: Units in process               400 Stage of completion with respect to materials 60%Stage of completion with respect to conversion 85% Costs in the beginning inventory:    Materials cost $170   Labour cost $160   Overhead cost $300 Units started into production during the month 1,100Units completed and transferred out 1,400Costs added to production during the month:     Materials cost $1,300   Labour cost $800   Overhead cost $1,700Work in process, ending:     Units in process ???    Stage of completion with respect to materials 70%    Stage of completion with respect to conversion 80%
Required: Using the weighted average method and FIFO method, prepare a production cost report for the company.

Answer 1

WEIGHTED AVERAGE COST
UNITS TO ACCOUNT FOR:
Beginning Work in Process units				400
Add: Units Started in Process				1,100
Total Units to account for:				1,500
UNITS TO BE ACCOUNTED FOR:
Units started and completed				1,400
Ending Work in Process				100
Total Units to be accounted for:				1,500
Equivalent Units:
			Material Cost		Conversion
			% Completion	Units	% Completion	Units
Units started and completed			100%	1,400	100%	1,400
Ending Work in Process			70%	70	80%	80
Total Equivalent units				1,470		1,480
TOTAL COST TO ACCOUNT FOR:
			Material		Conversion
Beginning work in Process			170		2,160
Cost Added during May			1,300		800
Total Cost to account for:			1,470		2,960
Total Cost to account for:					4,430
COST PER EQUIVALENT UNIT:
			Material		Conversion
Total cost added during the year			1,470		2,960
Equivalent Units			1,470		1,480
Cost per Equivalent unit			1		2
TOTAL COST ACCOUNTED FOR:
Units started and Transferred out (1400 units)
			Equivalent unit	Cost per EU	Total Cost
Material			1,400	1	1400
Conversion Cost			1,400	2	2800
Total Cost of Units completed and transferred out:					4200
Ending Work in process (100 units)
			Equivalent unit	Cost per EU	Total Cost
Material			70	1	70
Conversison Cost			80	2	160
Total cost of Ending Work in process:					230
FIFO
UNITS TO ACCOUNT FOR:
Beginning Work in Process units				400
Add: Units Started in Process				1,100
Total Units to account for:				1,500
UNITS TO BE ACCOUNTED FOR:
Units completed from Beginning WIP				400
Units started and completed				1,000
Ending Work in Process				100
Total Units to be accounted for:				1,500
Equivalent Units:
			Material Cost		Conversion
			% Completion	Units	% Completion	Units
Units completed from Beg. WIP			40%	160	15%	60
Units started and completed			100%	1,000	100%	1,000
Ending Work in Process			70%	70	80%	80
Total Equivalent units				1,230		1,140
COST PER EQUIVALENT UNIT:
			Material		Conversion
Total cost added during the year			1,300		2,500
Equivalent Units			1,230		1,140
Cost per Equivalent unit			1.06		2.19
TOTAL COST ACCOUNTED FOR:
Units Completed from Beginning WIP (400 units)
			Equivalent unit	Cost per EU	Total Cost
Beginning Cost					630
Material			160	1.06	169.6
Conversion Cost			60	2.19	131.4
Cost of units completed from Beg WIP					931
Units started and Transferred out (1000 units)
			Equivalent unit	Cost per EU	Total Cost
Material			1,000	1.06	1060
Conversion Cost			1,000	2.19	2190
Total Cost of Units completed and transferred out:					3250
Ending Work in process (100 units)
			Equivalent unit	Cost per EU	Total Cost
Material			70	1.06	74.2
Conversison Cost			80	2.19	175.2
Total cost of Ending Work in process:					249