The Laramie Factory produces expensive boots. It has two departments that proces

Question

The Laramie Factory produces expensive boots. It has two departments that process all the items. During January, the beginning work in process in the tanning department was 40% complete as to conversion and 100% complete as to direct materials. The beginning inventory included $6,000 for materials and $18,000 for conversion costs. Ending work-in-process inventory in the tanning department was 40% complete. Direct materials are added at the beginning of the process. Beginning work in process in the finishing department was 60% complete as to conversion. Beginning inventories included $7,000 for transferred-in costs and $10,000 for conversion costs. Ending inventory was 30% complete. Additional information about the two departments follows: Tanning Finishing Beginning work-in-process units 5,000 4,000 Units started this period 14,000 ? Units transferred this period 16,000 18,000 Ending work-in-process units ? 2,000 Material costs added $18,000 ? Conversion costs 32,000 $19,000 Transferred-out cost 50,000 ? Required: Prepare a production cost worksheet using weighted-average costing for the finishing department.

Explanation / Answer

Flow of production Physical Units Conversion costs Transferred-in costs Work in process, beginning $ 4,000 Transferred in druing period $ 16,000 To account for $ 20,000 Units transferred out $ 18,000 $ 18,000 $ 18,000 Work in progress ending $ 2,000 $ 600 $ 2,000 Accounted for $ 20,000 $ 18,600 $ 20,000 Costs Totals Conversion costs Transferred-in costs Work in process, beginning $ 17,000.00 $ 10,000.00 $ 7,000.00 Costs added during period $ 69,000.00 $ 19,000.00 $ 50,000.00 Total costs to account for $ 86,000.00 $ 29,000.00 $ 57,000.00 Divided by equivalent units - - - - $ 18,600.00 $ 20,000.00 Equivalent-unit costs $ 4.41 $ 1.56 $ 2.85 Assignment of cost Transferred out (18,000 X $4.41) $ 79,380.00 Work in process, ending Transferred in costs(2,000 x $2.85) $ 5,700.00 Conversion costs (600 x 1.56) $ 936.00 $ 6,636.00 costs accounted for $ 86,016.00

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