Question

Jessica Company manufactures hockey pucks and soccer balls. For both products, materials are added at the beginning of the production process and conversion costs are incurred evenly. Jessica uses the FIFO method to calculate equivalent units. Production and cost data for the month of August are as follows:

Production Data—Hockey pucks	Units	Percent Complete
Work in process units, August 1	500	70%
Units started into production	1,600
Work in process units, August 31	600	30%
Cost Data—Hockey pucks
Work in process, August 1	$1,125
Direct materials	1,600
Direct labour	1,160
Manufacturing overhead	1,000
Production Data—Soccer balls
Work in process units, August 1	200	90%
Units started into production	2,000
Work in process units, August 31	150	60%
Cost Data—Soccer balls
Work in process, August 1	$    450
Direct materials	2,500
Direct labour	1,000
Manufacturing overhead	995

Instructions: Determine equivalent units and unit cost, and prepare production cost report using FIFO.​

A) Calculate the following for both the hockey pucks and the soccer balls:

1.The equivalent units of production for materials and conversion costs

2.The unit costs of production for materials and conversion costs

3.The assignment of costs to units transferred out and to work in process at the end of the accounting period

B) Prepare a production cost report for the month of August for the hockey pucks only.

Answer 1

A.

1.

Jesica Company
Calculation of equivalent units -- Hockey Pucks
	Whole	Equivalent Units
	Units	Material	Conversion
Units charged into production
Inventory in process, beginning	500
Started production	1600
Total units accounted for by the Sifting Department	2100
Units to be assigned costs:
Beginning inventory in process	500	0	150
Started and finished	1000	1000	1000
Inventory in process , Ending (30% complete)	600	600	180
Total units to be assigned costs	2100	1600	1330

WHITE DIAMOND FLOUR COMPANY
Calculation of equivalent units -- Soccer Balls
	Whole	Equivalent Units
	Units	Material	Conversion
Units charged into production
Inventory in process, beginning	200
Started production	2000
Total units accounted for by the Sifting Department	2200
Units to be assigned costs:
Beginning inventory in process	200	0	20
Started and finished	1850	1850	1850
Inventory in process , Ending (60% complete)	150	150	90
Total units to be assigned costs	2200	2000	1960

2.

	Costs
	Material	Conversion	Total Costs
Cost per equivalent unit -- Hockey Puck
Total costs for August	1600	2160	3760
Total equivalent units	1600	1330	2930
Cost per equivalent unit	$1.00	$1.62

	Costs
	Material	Conversion	Total Costs
Cost per equivalent unit -- Soccer Balls
Total costs for August	2500	1995	4495
Total equivalent units	2000	1960	3960
Cost per equivalent unit	$1.25	$1.02

3.

Costs charged to production:
Inventory in process , Beginning			1125
Costs incurred in August			3760
Total costs accounted for in August			4885
Cost allocated allocated and partially completed units
Cost of beginning inventory	0	0	1125
Cost incurred in July on beginning inventory	0	244	244
Started and finished during August	1000	1624	2624
Transferred to finished goods in August	1000	1868	3993
Inventory in process , Ending	600	292	892
Total costs assigned in August			4885

Costs charged to production:
Inventory in process , Beginning			450
Costs incurred in July			4495
Total costs accounted for in August			4945
Cost allocated allocated and partially completed units
Cost of beginning inventory	0	0	450
Cost incurred in July on beginning inventory	0	20	20
Started and finished during August	2313	1883	4196
Transferred to finished goods in August	2313	1903	4666
Inventory in process , Ending	188	92	279
Total costs assigned in August			4945

B..

Jesica Company
Cost of Production Report -- Hockey Pucks
	Whole	Equivalent Units
	Units	Material	Conversion
Units charged into production
Inventory in process, beginning	500
Started production	1600
Total units accounted for by the Sifting Department	2100
Units to be assigned costs:
Beginning inventory in process	500	0	150
Started and finished	1000	1000	1000
Inventory in process , Ending (30% complete)	600	600	180
Total units to be assigned costs	2100	1600	1330
	Costs
	Material	Conversion	Total Costs
Cost per equivalent unit -- Hockey Puck
Total costs for July in Sifting Department	1600	2160	3760
Total equivalent units	1600	1330	2930
Cost per equivalent unit	$1.00	$1.62
Costs charged to production:
Inventory in process , Beginning			1125
Costs incurred in July			3760
Total costs accounted for in August			4885
Cost allocated allocated and partially completed units
Cost of beginning inventory	0	0	1125
Cost incurred in July on beginning inventory	0	244	244
Started and finished during August	1000	1624	2624
Transferred to finished goods in August	1000	1868	3993
Inventory in process , Ending	600	292	892
Total costs assigned in August			4885