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		20,400
Work in process units, July 31		3,060
Work in process percent complete		60
Cost Data—July
Work in process, July 1		$0
Materials		387,600
Labor		239,088
Overhead		106,080
Total		$732,768

Part 1

Compute the physical units of production.

		T12 Tables
Units to be accounted for

Attempts: 0 of 1 used

Part 2

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

		Materials		Conversion Costs
T12 Tables

Attempts: 0 of 1 used

Part 3

Determine the unit costs of production.

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

Attempts: 0 of 1 used

Part 4

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		$

Attempts: 0 of 1 used

Part 5

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

Answer :-

1)

Physical units to be accounted:

= Units in beginning inventory + Units started

= 0 + 20,400

= 20,400

Units to be accounted for = 20,400

2)

Solution

	Material	Conversion
Equivalent Units of Production	20,400	19,176

Working

Reconciliation of Units
A	Opening WIP	-
B	Introduced	20,400
C=A+B	TOTAL	20,400
D	Transferred(20,400-3,060)	17,340
E=C-D	Closing WIP	3,060

.

Statement of Equivalent Units(Weighted average)
			Material	Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	17,340			100%	17,340	100%	17,340
Closing WIP	3,060			100%	3,060	60%	1,836
Total	20,400			Total	20,400	Total	19,176

3)

Unit costs of production = (Beginning Cost + Cost added) / Equivalent units of production
Material = ($0+387,600)/20,400 = $19 per unit
Conversion = ($0+239,088+106,080)/19,176 = $18 per unit
Total Cost = $37 per unit

4)

Particulars	Amount	Amount
Costs accounted for:
Transferred out (17,340 × $37)		$641,580
Ending work-in-process
Material     (3,060 × $19)	$58,140
Conversion costs (1,836 × $18)	$33,048	$91,188
Total costs		$732,768