Question

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 2020 are presented below.

Production Data		June
Beginning work in process units		0
Units started into production		22,660
Ending work in process units		2,060
Percent complete—ending inventory		40	%

Cost Data
Materials		$ 203,940
Labor		55,208
Overhead		116,184
Total		$ 375,332

(a)

Prepare a schedule showing physical units of production.

Physical units
Units to be accounted for
Work in process, June 1		enter a number of units
Started into production		enter a number of units
Total units		enter a total number of units
Units accounted for
Transferred out		enter a number of units
Work in process, June 30		enter a number of units
Total units		enter a total number of units

b) Determine the equivalent units of production for materials and conversion costs

c) Compute the unit costs of production

d) Determine the costs to be assigned to the units transferred out and in process for June

e) Prepare a production cost report for the Molding Department for the month of June

Answer 1

Requirement a

Physical units
Units to be accounted for
Work in process, June 1	0
Started into production	22660
Total units	22660
Units accounted for
Transferred out	20600
Work in process, June 30	2060
Total units	22660

Requirement b

	Material	Conversion
Equivalent Units of Production	22,660	21,424

Requirement c

	Material	Conversion
Cost per equivalent Unit	$                  9.00	$                 8.00

Requirement d

	Material	Conversion	Total
Units transferred out	$         1,85,400	$         1,64,800	$          3,50,200
Ending Inventory	$             18,540	$               6,592	$              25,132

Requirement e

Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost	$                -
Cost incurred during period	$ 3,75,332.00
Total cost to be accounted for	$ 3,75,332.00
Costs accounted for as follows:
Cost of Units Transferred Out	$ 3,50,200.00
Cost of Ending Wip	$     25,132.00
Total cost accounted for	$ 3,75,332.00

Working

Statement of Equivalent Units
				Material		Conversion Cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	20,600			100%	20,600	100%	20,600
Closing WIP	2,060			100%	2,060	40%	824
Total	22,660			Total	22,660	Total	21,424

Cost per Equivalent Units
COST		Material	Conversion Cost	TOTAL
Beginning WIP Inventory Cost				$                     -
Cost incurred during period		$         2,03,940	$          1,71,392	$        3,75,332
Total Cost to be accounted for		$         2,03,940	$          1,71,392	$        3,75,332
Total Equivalent Units		22,660	21,424
Cost per Equivalent Units		$                 9.00	$                   8.00

Statement of cost
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$                  9.00	2,060	$              18,540	$            20,600	$          1,85,400
Conversion Cost	$                  8.00	824	$                6,592	$            20,600	$          1,64,800
TOTAL	$         3,75,332	TOTAL	$              25,132	TOTAL	$          3,50,200