Question

2. Bonita 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	21,200
Work in process units, July 31	3,180
Work in process percent complete	60

Cost Data- July
Work in process, July 1	$0
Materials	402,800
Labor	248,464
Overhead	110,240
Total	$761,504

a1) Compute the physical units of production.

a2) Compute equivalent units of production for materials and for conversion costs.

a3) Determine the unit costs of production.

a4) Show the assignment of costs to units transferred out and in process.

Answer 1

a
1
Units to be accounted for	21200
2
	Materials	Conversion Costs
Equivalent units of production	21200	19928
3
	Materials	Conversion Costs	Total costs
Unit costs	19.00	18.00	37.00
4
Costs accounted for:
Transferred out		666740
Work in process
Materials	60420
Conversion costs	34344	94764
Total costs		761504

Workings:
Cutting Department
Production Cost Report
For the Month Ended July 31, 2020
		Equivalent Units
	Physical Units	Materials	Conversion Costs
Units to be accounted for
Work in process, July 1	0
Started into production	21200
Total units	21200
Units accounted for
Transferred out	18020	18020	18020
Work in process, July 31	3180	3180	1908
Total units	21200	21200	19928
		Materials	Conversion Costs	Total
Unit costs:
Total costs		402800	358704	761504
Equivalent units		21200	19928
Unit costs		19.00	18.00	37.00
Costs to be accounted for
Work in process, July 1				0
Started into production				761504
Total costs				761504
Cost Reconciliation Schedule
Costs accounted for
Transferred out				666740	=18020*37
Work in process, July 31
Materials			60420		=3180*19
Conversion costs			34344	94764	=1908*18
Total costs				761504