In: Accounting
Rosenthal Company manufactures bowling balls through two processes:
Molding and Packaging. In the Molding Department, the urethane,
rubber, plastics, and other materials are molded into bowling
balls. In the Packaging Department, the balls are placed in cartons
and sent to the finished goods warehouse. All materials are entered
at the beginning of each process. Labor and manufacturing overhead
are incurred uniformly throughout each process. Production and cost
data for the Molding Department during June 2017 are presented
below.
Production Data |
June |
||
Beginning work in process units | 0 | ||
Units started into production | 30,360 | ||
Ending work in process units | 2,760 | ||
Percent complete—ending inventory | 40 | % |
Cost Data |
||
Materials | $ 273,240 | |
Labor | 73,968 | |
Overhead | 155,664 | |
Total | $ 502,872 |
Solution:
Computation of Equivalent unit of Production - Molding Department | |||
Particulars | Physical Units | Material | Conversion |
Unit completed & Transferred out (30360-2760) | 27600 | 27600 | 27600 |
Closing WIP: | 2760 | ||
Material (100%) | 2760 | ||
Conversion (40%) | 1104 | ||
Equivalent units of production | 30360 | 30360 | 28704 |
Computation of Cost per equivalent unit of Production - Weighted Average - Molding Department | ||
Particulars | Material | Conversion |
Opening WIP | $0.00 | $0.00 |
Cost Added during June | $273,240.00 | $229,632.00 |
Total cost to be accounted for | $273,240.00 | $229,632.00 |
Equivalent units of production | 30360 | 28704 |
Cost per Equivalent unit | $9.00 | $8.00 |
Computation of Cost of ending WIP and units completed & transferred out - Weighted Average - Molding Department | |||
Particulars | Material | Conversion | Total |
Equivalent unit of Ending WIP | 2760 | 1104 | |
Cost per equivalent unit | $9.00 | $8.00 | |
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit) | $24,840.00 | $8,832.00 | $33,672.00 |
Units completed and transferred | 27600 | 27600 | |
Cost of units completed & Transferred (Unit completed * cost per equivalent unit) | $248,400.00 | $220,800.00 | $469,200.00 |
Cost Reconciliation - Weighted Average | |
Particulars | Amount |
Costs to be accounted for: | |
Cost of beginning WIP inventory | $0.00 |
Cost added to production | $502,872.00 |
Total Cost to be accounted for | $502,872.00 |
Costs accounted for as follows: | |
Cost of unit transferred out | $469,200.00 |
Ending WIP: | |
Material | $24,840.00 |
Converison | $8,832.00 |
Total cost accounted for | $502,872.00 |