Required Prepare a cost of production report for current month. Use FIFO process
ID: 2380125 • Letter: R
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Prepare a cost of production report for current month. Use FIFO process costing.
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Production Data units In process, beginning of month (20% converted) 2000 Started during current month 8000 Completed and transferred to finished goods 5500 In process, end of month (60% converted) 2500 Manufacturing Costs Work in process, beginning $21,450 Materials $54,000 Direct labor cost $105,000 Factory overhead cost $42,840Explanation / Answer
Using FIFO Process Costing Calculation of Equivalent Unit produce during the month Unit Material Conversion % of completion Equivalent Unit % of completion Equivalent Unit Opening 2000 - - 80% 1600 Unit Started & completed 5500 100% 5500 100% 5500 Closing 2500 100% 2500 60% 1500 Equivalent Unit Produced 8000 8600 Equivalent Cost per unit for Material =54000/8000 $ 6.75 For Conversion Cost =(105000+42840)/8600 $ 17.19 Calculation of total cost of Production of finished goods opening Stock $ 21,450.00 Unit Produced during the year Material =5500*6.75 $ 37,125.00 Conversion cost =(5500+1600)*17.19 $ 122,049.00 Total cost of Production of finished goods $ 180,624.00 Calculation of Closing Work in progress Unit Produced during the year Material =2500*6.75 $ 16,875.00 Conversion cost =1500*17.19 $ 25,785.00 Closing Work in progress $ 42,660.00
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