Question

Consider the following information from Manufacturing Inc., then see the instructions that
follow.
Manufacturing Inc. manufactures plastic thing-a-majigs. Materials are added at the beginning
of the production process and conversion costs are incurred uniformly. Production and cost
data for the month of June, 2016 are as follows.
	Production data				Units		Percent Complete
	Work in process units, June 1				2,600		61%
	Units started into production				6,285
	Work in process units, June 30				3,000		38%
	Cost data
	Work in process, June 1
	Materials			$7,250
	Coversion costs			6,050	$13,300
	Direct materials				23,600
	Direct labor				15,850
	Manufacturing overhead				12,750
Instructions:
Prepare a production cost report for the month of June, making sure to show equivalent
units of production for materials and conversion costs, unit costs of production for materials
and conversion costs, and the assignment of costs to units transferred out and in process at
the end of June.
THIS ASSIGNMENT MUST BE COMPLETED IN EXCEL. You should develop an efficient and
customizable production cost report, using formulas whenever possible instead of keyed in
values. No numeric values except the ones shown above should need to be keyed in.

Answer 1

	As question has not specified, which method to use to find answers, I have solved it by both method i.e.
	FIFO method and Weighted average cost method. Though I personally feel that its weighted average
	method with which you are supposed to solve the question.
	Manufacturing Inc.
	Product Cost Report as per FIFO Method
	Statement of equivalent production
							Materials		Conversion Costs
	Particulars		Input	Particulars		Output	%	Equivalent Units	%	Equivalent Units
	Beginning WIP		2600
	Addition		6285	Opening WIP		2600	0	0	39	1014
				Completed & transferred		3285	100	3285	100	3285
				Total transfer		5885		3285		4299
				Ending WIP		3000	100	3000	38	1140
			8885	Total		8885		6285		5439
	Cost element			Total costs	Equivalent units	Cost per Equivalent units
	Material			23600	6285	3.755
	Converion costs
	Direct Labor			15850	5439	2.914
	Manufacturing overhead			12750	5439	2.344
	Total conversion costs			28600	5439	5.258
		Total		52200
	Completed/Transferred			Units	Costs	Total costs
	Direct Materials			3285	3.755	12335.08
	Conversion Costs			4299	5.258	22605.52
	Cost of goods Manufactured					34941
	Ending Inventory			Units	Costs	Total costs
	Direct Materials			3000	3.755	11264.92
	Conversion Costs			1140	5.258	5994.48
	Cost of ending Inventory					17259
	Total Cost allocated					52200
	Product Cost Report as per Weighted Average method
	Statement of equivalent production
							Materials		Conversion Costs
	Particulars		Input	Particulars		Output	%	Equivalent Units	%	Equivalent Units
	Beginning WIP		2600	Completed & transferred		5885	100	5885	100	5885
	Addition		6285	Ending WIP		3000	100	3000	38	1140
			8885	Total		8885		8885		7025
	Cost element		Beginning work In process costs	Cost for the month	Total costs	Equivalent units	Cost per Equivalent units
	Material		7250	23600	30850	8885	3.472
	Conversion costs*		6250	28600	34850	7025	4.961
		Total			65700
	Note : Conversion cost for the month is arrived at by adding direct labor with manufacturing overhead.
	Completed/Transferred			Units	Costs	Total costs
	Direct Materials			5885	3.472	20433.57
	Conversion Costs			5885	4.961	29194.63
	Cost of goods Manufactured					49628
	Ending Inventory			Units	Costs	Total costs
	Direct Materials			3000	3.472	10416.432
	Conversion Costs			1140	4.961	5655.3737
	Cost of ending Inventory					16072
	Total Cost allocated					65700