Question

Ben’s Brushes Inc. manufactures electric toothbrushes. The brushes are manufactured in 2 sequential processes: Interior and Assembly. The electronics are manufactured in-house in the Interior Department and the casing and bristles are purchased from an outside manufacturer and are added in the Assembly Department. Information related the Interior Department for the month of October can be summarized as follows:

Beginning Units: 1300 units, 70% completed

Ending Units: 1000 units, 30% completed

New Units started this month: 3000

Direct Materials costs in beginning WIP: $310

Conversion costs in beginning WIP: $705

Direct Materials costs incurred this month: $2,098

Conversion costs incurred this month: $4,047

In the Interior Department, direct materials are added at the beginning of the process while conversion costs are added uniformly throughout the assembly process. Required: complete the Cost of Production Report for the month of October for the Interior Department of Ben's Brushes Inc.

Answer 1

	DETAILED CALCULATION
	INPUTS
	OPENING WIP	1300
	INTRODUCED	3000
	OUTPUT
	FINISHED	3300
	CLOSING WIP	1000
	CALCULATIN OF EQUIVALENT PRODUCTION
			EQUIVALENT PRODUCTION		EQUIVALENT PRODUCTION
	OUT PUT		MATERIAL		CONVERSION COST
			% OF COMPLETION		% OF COMPLETION
	FINISHED FROM OPENING WIP	1300	0	0	30	390
	FINISHED FROM INTRODUCED	2000	100	2000	100	2000
	CLOSING WIP	1000	100	1000	30	300
				3000		2690
	THE EQUIALENT PRODUCTION UNITS
		MATERIAL		CONVERSION COST
		3000		2690
	CALCULATION OF COST PER UNIT
		TOTAL COST	EQUIVALENT UNITS	CSOT PER UNIT
	MATERIAL	$2,098.00	3000	$0.69933
	CONVERSION COST	$4,047	2690	$1.50446
			.
	COST PER UNIT
	MATERIAL	$0.70000
	CONVERSION COST	$1.50446
	TOTAL COST PER UNIT	$2.20446
	VALUATION OF 1300 UNITS FINISHED FROM OPENING WIP
		EQUIVALENT PRODUCTION	PER UNIT COST	TOTAL
	OPENING MATERIAL COST			310
	CONVERSION COST OPENING			705
	CONVERSION COST INCURRED NOW	390	$1.50446	587
	VALUE OF 1300 UNITS FINISHED FROM OPENING WIP			1602
	VALUATION OF FINISHED PRODUCT 2000 FROM UNITS INRODUCED IN THE PROCESS
		UNITS	COST PER UNIT	TOTAL
	MATERIAL	2000	$0.69933	$                        1,467
	CONVERSION COST	2000	$1.50446	$                        3,009
	TOTAL	2000		$                        4,408
	VALUATION OF CLOSING WIP UNITS 1000
		EQUIVALENT PRODUCTION UNITS	COST PER UNIT	TOTAL COST
	MATERIAL	1000	$0.69933	$                            699
	CONVERSION COST	300	$1.50446	$                            451
	VALUE OF WIP			$                        1,151
	PROCESS A/C
		UNITS	AMOUNT
	TO OPENING WIP	1300	$                    1,015.00	TO FINISHED STOCK A/C	3300	$           6,009.00
	TO MATERIAL COST	3000	$                    2,098.00	TO CLOSING WIP	1000	$           1,151.00
	TO CONVERSION COST		$                    4,047.00
		4300	$                    7,160.00		4300	$           7,160.00