Question

Cost of Production Report: Average Cost Method

Use the average cost method with the following data:

Work in process, December 1, 6,700 units, 70% completed	$52,997
Materials added during December from Weaving Department, 126,600 units	972,288
Direct labor for December	239,818
Factory overhead for December	145,589
Goods finished during December (includes goods in process, December 1), 123,900 units	—
Work in process, December 31, 9,400 units, 10% completed	—

Prepare a cost of production report for the Cutting Department of Tanner Carpet Company for December 2016 using the average cost method. If required, round your cost per equivalent unit answer to two decimal places.

Tanner Carpet Company
Cost of Production Report-Cutting Department
For the Month Ended December 31, 2016
Unit Information
Units charged to production:
Inventory in process, December 1
Received from Weaving Department
Total units accounted for by the Cutting Department
Units to be assigned costs:
	Whole Units	Equivalent Units of Production
Transferred to finished goods in December
Inventory in process, December 31
Total units to be assigned costs
Cost Information
Costs per equivalent unit:
		Costs
Total costs for December in Cutting Department		$
Total equivalent units
Cost per equivalent unit		$
Costs assigned to production:
Inventory in process, December 1		$
Costs incurred in December
Total costs accounted for by the Cutting Department		$
Costs allocated to completed and partially completed units:
Transferred to finished goods in December		$
Inventory in process, December 31
Total costs assigned by the Cutting Department		$

Answer 1

Cost of production report :

Units charged to production:
Inventory in process, December 1		6700
Received from Weaving Department		126600
Total units accounted for by the Cutting Department		133300
Units to be assigned costs:
	Whole unit	Equivalent unit of production
Transferred to finished goods in December	123900	123900
Inventory in process, December 31	9400	9400*10% = 940
Total units	133300	124840
Cost information
Costs per equivalent unit:	11.30
		Costs
Total costs for December in Cutting Department		1410692
Total equivalent units		124840
Cost per equivalent unit		11.30
Costs assigned to production:
Inventory in process, December 1		52997
Costs incurred in December		1357695
Total costs accounted for by the Cutting Department		1410692
Costs allocated to completed and partially completed units
Transferred to finished goods in December		1400070
Inventory in process, December 31		10622
Total costs assigned by the Cutting Department		1410692