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Salanger Manufacturing Corporation produces a dandruff shampoo in three consecutive processes. The costs of Department 1...
Salanger Manufacturing Corporation produces a dandruff shampoo in three consecutive processes. The costs of Department 1 for June 2019 were as follows:
| Cost of beginning inventory | ||
| Direct material | $5,500 | |
| Conversion costs | 12,740 | |
| Costs added in Department 1: | ||
| Direct material | $223,390 | |
| Direct labor | 358,300 | |
| Manufacturing overhead | 155,269 | 736,959 |
Department 1 handled the following units during June:
| Units in process, June 1 | 2,000 |
| Units started in Department 1 | 45,000 |
| Units transferred to Department 2 | 46,000 |
| Units in process, June 30 | 1,000 |
On average, the June 1 units were 40% complete; the June 30 units were 70% complete. Direct materials are added at the beginning of the process, and conversion costs occur evenly throughout the process in Department 1. Gomez uses the weighted average method for process costing.
Required
Prepare the product cost report for Department 1 for June.
Round average cost per equivalent unit to two decimal places. Use rounded answers for subsequent calculations. Round other answers to the nearest whole number.
Salanger Manufacturing Corporation produces a dandruff shampoo in three consecutive processes. The costs of Department 1 for June 2019 were as follows:
| Cost of beginning inventory | ||
| Direct material | $5,500 | |
| Conversion costs | 12,740 | |
| Costs added in Department 1: | ||
| Direct material | $223,390 | |
| Direct labor | 358,300 | |
| Manufacturing overhead | 155,269 | 736,959 |
Department 1 handled the following units during June:
| Units in process, June 1 | 2,000 |
| Units started in Department 1 | 45,000 |
| Units transferred to Department 2 | 46,000 |
| Units in process, June 30 | 1,000 |
On average, the June 1 units were 40% complete; the June 30 units were 70% complete. Direct materials are added at the beginning of the process, and conversion costs occur evenly throughout the process in Department 1. Gomez uses the weighted average method for process costing.
Required
Prepare the product cost report for Department 1 for June.
Round average cost per equivalent unit to two decimal places. Use rounded answers for subsequent calculations. Round other answers to the nearest whole number.
Solutions
Expert Solution
Solution:
| Computatio of Equivalent units - Weighted Average - Department 1 | |||
| Particulars | Physical Units | Equivalent units | |
| Material | Conversion | ||
| Work in Process, beginning | 2000 | ||
| Started during the current period | 45000 | ||
| Total units to account for | 47000 | ||
| Units accounted for: | |||
| Unit completed & Transferred out | 46000 | 46000 | 46000 |
| Closing WIP: | 1000 | ||
| Material (100%) | 1000 | ||
| Conversion (70%) | 700 | ||
| Equivalent units of production | 47000 | 47000 | 46700 |
| Computation of Cost per equivalent unit of Production - Department 1 | ||
| Particulars | Material | Conversion |
| Opening WIP | $5,500.00 | $12,740.00 |
| Cost Added during Period | $223,390.00 | $513,569.00 |
| Total cost to be accounted for | $228,890.00 | $526,309.00 |
| Equivalent units of production | 47000 | 46700 |
| Cost per Equivalent unit | $4.87 | $11.27 |
| Computation of Cost of ending WIP and units completed & transferred out - Weighted Average - Department 1 | |||
| Particulars | Material | Conversion | Total |
| Equivalent unit of Ending WIP | 1000 | 700 | |
| Cost per equivalent unit | $4.87 | $11.27 | |
| Cost of Ending WIP (Equivalent unit * Cost per equivalent unit) | $4,870 | $7,889 | $12,759 |
| Units completed and transferred | 46000 | 46000 | |
| Cost of units completed & Transferred (Unit completed * cost per equivalent unit) | $224,020 | $518,420 | $742,440 |
| Cost reconcilaition - Weighted Average - Department 1 | |
| Particulars | Amount |
| Costs to be accounted for: | |
| Cost of beginning WIP inventory | $18,240.00 |
| Cost added to production | $736,959.00 |
| Total Cost to be accounted for | $755,199.00 |
| Costs accounted for as follows: | |
| Cost of unit transferred out | $742,440 |
| Ending WIP | $12,759 |
| Total cost accounted for | $755,199.00 |
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