Question: Prepare a cost of production report for september 20X8. The company us

Question

Question:

Prepare a cost of production report for september 20X8. The company uses weighted averages.

Problem:

Martha's Cookie Company produces cookies in two departments; mixing and finishing. In mixing, all ingredients except nuts are added at the start of production. In finishing, nuts is added and then the mixture is placed into containers. Adding the nuts to the basic cookie mixture increases the volume transferred in by the number of gallons of nuts added. Any spoilage that occurs is in the Finishing Department. Spoilage is detected just before the cookies are placed into containers or at the 98% completion point. All spoilage is abnormal.

Finishing Department

BWIP (100% nuts, 0% container, 30% CC) 5,000 gallons

Gallons transferred in 5,500

Gallons of nuts added 1,200

EWIP (100% nuts, 0% container, 60% CC) 1,700 gallons

Gallons transferred out 9,000

abnormal spoilage 1,000

BWIP Costs:

Transferred IN $ 9,700

Nuts 10,500

CC (Conv. Cost) 15,000

Current Costs:

Transferred in $ 12,400

Nuts 54,000

Containers 11,000

CC 98,000

Explanation / Answer

Adepartmentalcost of production report (CPR)shows all costs chargeable to a department. It is not only the source for summary journal entries at the end of the month but also a most convenient vehicle for presenting and disposing of costs accumulated during the month.A cost of production report shows:

The cost of production report of the Blending Department, the originating department of The Clonex Corporation, is shown below. It illustrates the detailed computations needed to complete a cost of production report.

The Clonex Corporation
Blending Department (1st Dept.)
Cost of Production Report
For the Month of January, 19

Quantity Schedule: Units started in process 50,000
====== Units transferred to next department 45,000 Units still in process(all materials - 1/2 labor and FOH) 4,000 Units lost in process 1,000
------- 50,000
====== Cost Charged To the Department: Total
Cost unit
Cost Cost added by the department: Materials $24,500 $0.50 Labor 29,140 0.62 Factory Overhead (FOH) 28,200
------- 0.60
----- Total cost to be accounted for $81,840 $1.72 ====== ==== Cost Accounted for as Follows: Transferred to next department(45,000

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