2. see problem # 1 above. REQUIRED: Prepare a cost of production report using th
ID: 2334137 • Letter: 2
Question
2. see problem # 1 above. REQUIRED: Prepare a cost of production report using ther 3. R Companyhad 225 partially assembled units in the assembly department (which is process #1) These units ere 1 00% complete as tomate als and 60% completeast conve with the beginning work-in-process inventory were $18,000 materials and $8,100 conversion. R Company started production of another 275 units in May. Costs added during May were $19,800 materials and $16,380 conversion. There were 400 units transferred out to process #~The ending inventory units were TOO% complete as to materials and 50% complete as to conversion rsion. Costs associate REQUIRED: Prepare a cost of production report using the fiFomethod See problem #3 above. REQUIRED: Prepare a cost of production report using the weighted average method. 4.Explanation / Answer
Answer
--When using FIFO method, the cost of beginning WIP is not considered for calculating Cost per equivalent units.
--Units transferred are first from WIP inventory, then from units started.
--Complete cost of production report:
Costs Charged to Production:
Cost of beginning WIP
$ 26,100.00
Costs incurred this period
$ 36,180.00
Total Cost to account for
$ 62,280.00
Total costs accounted for [computed below]
$ 62,280.00
Difference due to rounding cost/unit
$ -
Units Reconciliation
Units to account for:
Beginning WIP
225
Units started this period
275
Total Units to account for
500
Total Units accounted for:
Completed & Transferred out
400
Ending WIP
100
Total Units accounted for
500
EUP - FIFO Method
Units
% Material
EUP Materials
% Conversion
EUP - Conversion
Units of ENDING WIP
100
100%
100
50%
50
Units STARTED & COMPLETED
175
100%
175
100%
175
Units of beginning WIP
225
0%
-
40%
90
Equivalent Units of Production
275
315
COST per EUP
Material
Conversion
Cost incurred this period
$ 19,800.00
$ 16,380.00
Total Costs
Costs
$ 19,800.00
Costs
$ 16,380.00
Equivalent units of production
EUP
275
EUP
315
Cost per EUP
$ 72.00000
$ 52.00000
COST ASSIGNMENT & RECONCILIATION
Cost Transferred out:
EUP
Cost per EUP
Total Cost
Cost of Beginning WIP
$ 26,100.00
Cost to complete beginning WIP-
- Direct Materials
-
$ 72.00
$ -
- Conversion
90
$ 52.00
$ 4,680.00
Total cost to complete beginning WIP
$ 30,780.00
Cost of Units started & completed this period:
EUP
Cost per EUP
Total Cost
- Direct Materials
175
$ 72.00
$ 12,600.00
- Conversion
175
$ 52.00
$ 9,100.00
Total costs started & Completed this period
$ 21,700.00
Total cost of work finished this period
$ 52,480.00
Costs of Ending WIP:
EUP
Cost per EUP
Total Cost
- Direct Materials
100
$ 72.00
$ 7,200.00
- Conversion
50
$ 52.00
$ 2,600.00
Total cost of ending WIP
$ 9,800.00
Total costs accounted for
$ 62,280.00
--When using Weighted Average method, cost of beginning WIP is ALSO used in calculating Cost per Equivalent units.
--Units transferred are not bifurcated as to transferred from beginning WIP or from started and completed.
--Complete cost report
Total Cost to account for:
Cost of beginning WIP
$ 26,100.00
Costs incurred this period
$ 36,180.00
Total Cost to account for
$ 62,280.00
Total costs accounted for [computed below]
$ 62,280.00
Difference due to rounding cost/unit
$ -
Units Reconciliation
Units to account for:
Beginning WIP
225
Units started this period
275
Total Units to account for
$ 500.00
Total Units accounted for:
Completed & Transferred out
400
Ending WIP
100
Total Units accounted for
$ 500.00
EUP - Weighted Average Method
Units
% Material
EUP Materials
% Conversion
EUP - Conversion
Units TRANSFERRED
400
100%
400
100%
400
Units of ENDING WIP
100
100%
100
50%
50
Equivalent Units of Production
500
450
COST per EUP
Material
Conversion
Cost of Beginning WIP
$ 18,000.00
$ 8,100.00
Cost incurred during the period
$ 19,800.00
$ 16,380.00
Total Costs
Costs
$ 37,800.00
Costs
$ 24,480.00
Equivalent units of production
EUP
500
EUP
450
Cost per EUP
$ 75.60
$ 54.40
TOTAL COST ACCOUNTED FOR
Cost of Units Transferred Out
EUP
Cost per EUP
Total Cost
- Direct Materials
400
$ 75.60
$ 30,240.00
- Conversion
400
$ 54.40
$ 21,760.00
Total Cost transferred Out
$ 52,000.00
Costs of Ending WIP:
EUP
Cost per EUP
Total Cost
- Direct Materials
100
$ 75.60
$ 7,560.00
- Conversion
50
$ 54.40
$ 2,720.00
Total cost of ending WIP
$ 10,280.00
Total costs accounted for
$ 62,280.00
Costs Charged to Production:
Cost of beginning WIP
$ 26,100.00
Costs incurred this period
$ 36,180.00
Total Cost to account for
$ 62,280.00
Total costs accounted for [computed below]
$ 62,280.00
Difference due to rounding cost/unit
$ -
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