Question

Twinnings Corporation manufactures Scheduling Books. There are two processes: printing and binding. The following information is given for the printing department for September. Units:

Units, beginning work in process 40,000 (20% complete for materials, 60% complete for conversion)

Started            300,000

Completed     ?

Units, ending work in process 50,000 (25% complete for materials, 80% complete for conversion)

Costs:                                     Materials         Conversion     Total

beginning work in process     $ 6,080           $ 2,160           $ 8,240

current costs                         $220,875         $30,600          $251,475

total costs                               $226,955         $32,760          $259,715

The company uses FIFO inventory assumption.

Required: Prepare September cost report for the printing department to calculate the cost of units completed and transferred to the binding department, and the cost of ending work in process.

Answer 1

Units to be accounted for:		Equivalent units
		Material	Conversion
Units in beginning WIP	40,000	32,000 (40,000*80%)	16,000 (40,000*40%)
Units started and completed	250,000	250,000	250,000
Units in ending WIP	50,000	12,500 (50,000*25%)	40,000 (50,000*80%)
Total equivalent units	340,000	294,500	306,000
Cost to be accounted for:
Cost in beginning WIP		$6,080	$2,160
Current costs		220,875	30,600
Total cost to be accounted for		$226,955	$32,760

Cost per equivalent units:
	Material	Conversion
Current costs	$220,875	$30,600
Total equivalent units	294,500	306,000
Cost per equivalent unit	$0.75	$0.1
Cost of units transferred out:
Beginning WIP:
Beginning balance	$8,240
Cost incurred during September (32,000*$0.75+16,000*$0.1)	25,600
Total cost of beginning WIP	33,840
Cost of units started and completed (250,000*$0.85)	212,500
Total cost of units transferred out		$246,340
Cost of ending WIP:
Material (12,500*$0.75)	$9,375
Conversion (40,000*$0.1)	4,000
Cost of units in ending WIP		$13,375
Cost accounted for		$259,715