Zou Compnay manufactures bowling balls through two processes: Molding and Packag

Question

Zou Compnay 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 2012 are presented below. Production Data June Beginning work in process units 0 Units started into production 20,000 Ending work in process units 2,000 Percent complete- ending inventory 60% Cost Data June Materials 198,000 Labor 50,400 Overhead 112,800 Total 361,200 Instructions A. Prepare a schedule showing physical units of production 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 and in process for June. E. Prepare a production cost report for the Molding Department for the month of June. Please answer and if you can also explain how you got the answers for future reference would be great. Thank you.

Explanation / Answer

a.) units completed = 18000 not completed = 2000 b.) equivalent units of production for materials = 20000 equivalent units of production for conversion costs = 18000 + .6*2000 = 19200 c.) unit cost for materials = 198000/20000 = 9.9 for conversion costs = (50400+112800)/19200 = 8.5 Total unit cost = 9.9 + 8.5 = 18.4 d) Costs to unit transferred = 18.4*18000 = 331200 In process Machining = 2000* 9.9 = 19800 conversion = 1200*8.5 = 10200 Total WIP = 30000 Total = 361200 e.) Report Material cost..................198000 labor cost.....................50400 Overhead.....................112800 total = ......................................361200 Transferrend cost to packing department = 331200 balance in WIP = 30000

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