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In: Accounting
The Capital Corporation prepared the following production cost report for Department 1 for October of the...
The Capital Corporation prepared the following production cost report for Department 1 for October of the current year.
Work in process inventory, October 1 2,000 units
Units started in production in October 7,000 units
Units transferred to finished goods inventory during October 6,900 units
Beginning work in process consisted of the following:
Direct materials $3,600
Direct labor $1,800
Manufacturing overhead $1,400
$6,800
Costs incurred in October
Direct materials $12,600
Direct labor $22,688
Manufacturing overhead $20,600
$55,888
Work in process inventory on October 31 is 100% complete as to direct materials and 60% complete as to conversion.
Compute Cost of Production Report for the month.
Solutions
Expert Solution
Solution :
| Computation of Equivalent unit of Production - Weighted Average | |||
| Particulars | Physical Units | Material | Conversion |
| Unit completed & Transferred out | 6900 | 6900 | 6900 |
| Closing WIP: (2000 + 7000 - 6900) | 2100 | ||
| Material (100%) | 2100 | ||
| Conversion (60%) | 1260 | ||
| Equivalent units of production | 9000 | 9000 | 8160 |
| Computation of Cost per equivalent unit of Production - Weighted Average | ||
| Particulars | Material | Conversion (Direct labor + MOH) |
| Opening WIP | $3,600.00 | $3,200.00 |
| Cost Added during October | $12,600.00 | $43,288.00 |
| Total cost to be accounted for | $16,200.00 | $46,488.00 |
| Equivalent units of production | 9000 | 8160 |
| Cost per Equivalent unit | $1.80 | $5.70 |
| Computation of Cost of ending WIP and units completed & transferred out - Weighted Average | |||
| Particulars | Material | Conversion | Total |
| Equivalent unit of Ending WIP | 2100 | 1260 | |
| Cost per equivalent unit | $1.80 | $5.70 | |
| Cost of Ending WIP (Equivalent unit * Cost per equivalent unit) | $3,780 | $7,178 | $10,958 |
| Units completed and transferred | 6900 | 6900 | |
| Cost of units completed & Transferred (Unit completed * cost per equivalent unit) | $12,420 | $39,310 | $51,730 |
| Production cost report - Weighted Average | |
| Particulars | Amount |
| Costs to be accounted for: | |
| Cost of beginning WIP inventory ($3,600 + $3,200) | $6,800.00 |
| Cost added to production ($12,600 + $43,288) | $55,888.00 |
| Total Cost to be accounted for | $62,688.00 |
| Costs accounted for as follows: | |
| Cost of unit transferred out | $51,730 |
| Ending WIP: | |
| Material | $3,780 |
| Converison | $7,178 |
| Total cost accounted for | $62,688 |
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