Question

Thakin 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		21,000
Work in process units, July 31		3,150
Work in process percent complete		60
Cost Data—July
Work in process, July 1		$0
Materials		399,000
Labor		246,120
Overhead		109,200
Total		$754,320

(a1)

Compute the physical units of production.

		T12 Tables
Units to be accounted for

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(a2)

Compute equivalent units of production for materials and for conversion costs.

		Materials		Conversion Costs
T12 Tables

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(a3)

Determine the unit costs of production.

		Materials		Conversion Costs		Total Costs
Unit costs-T12 Tables		$		$		$

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(a4)

Show the assignment of costs to units transferred out and in process.

T12 Tables
Costs accounted for:
Transferred out		$
Work in process
Materials	$
Conversion costs
Total costs		$

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(b)

Prepare the production cost report for July 2020.

THAKIN INDUSTRIES INC. Cutting Department—Plant 1 Production Cost Report For the Month Ended July 31, 2020
				Equivalent Units
Quantities		Physical Units		Materials		Conversion Costs
Units to be accounted for
Work in process, July 1
Started into production
Total units
Units accounted for
Transferred out
Work in process, July 31
Total units
Costs				Materials		Conversion Costs		Total
Unit costs
Total Costs				$		$		$
Equivalent units
Unit costs				$		$		$
Costs to be accounted for
Work in process, July 1								$
Started into production
Total costs								$
Cost Reconciliation Schedule
Costs accounted for
Transferred out								$
Work in process, July 31
Materials						$
Conversion costs
Total costs								$

Answer 1

1
	T12 Tables
Units to be accounted for	21000
2
	Materials	Conversion Costs
T12 Tables	21000	19740
3
	Materials	Conversion Costs	Total costs
Unit costs T12 Tables	19.00	18.00	37.00
4
Costs accounted for:
Transferred out		660450
Work in process
Materials	59850
Conversion costs	34020	93870
Total costs		754320

Cutting Department-Plant 1
Production Cost Report
For the Month Ended July 31, 2020
		Equivalent Units
	Physical Units	Materials	Conversion Costs
Units to be accounted for
Work in process, July 1	0
Started into production	21000
Total units	21000
Units accounted for
Transferred out	17850	17850	17850
Work in process, July 31	3150	3150	1890
Total units	21000	21000	19740
		Materials	Conversion Costs	Total
Unit costs:
Total costs		399000	355320	754320
Equivalent units		21000	19740
Unit costs		19.00	18.00	37.00
Costs to be accounted for
Work in process, July 1				0
Started into production				754320
Total costs				754320
Cost Reconciliation Schedule
Costs accounted for
Transferred out				660450	=17850*37
Work in process, July 31
Materials			59850		=3150*19
Conversion costs			34020	93870	=1890*18
Total costs