Toy Truck Corporation produces children\'s toy trucks using a continuous product

Question

Toy Truck Corporation produces children's toy trucks using a continuous production process. All direct materials are added at the beginning of the process. In November, the beginning work in process inventory was 420 units, which were 50 percent complete; the ending balance was 400 units, which were 70 percent complete. During November, 15,000 units were started into production. The Work in Process Inventory account had a beginning balance of $937 for direct materials costs and $370 for conversion costs. In the course of the month, $35,300 of direct materials were added to the process, and $31,689 of conversion costs were assigned.

Using the data given and assuming that the company uses the average costing method, prepare a process cost report that computes the equivalent units for November, the product unit cost for the toys, and the ending balance in the Work in Process Inventory account. Round cost per equivalent unit to the five decimal places. For the percentages, do not enter the percent sign. For example, 60% would be entered as 60.

Explanation / Answer

Toy Truck Corporation Process Cost Report For the Month Ended November 30 Unit Information Units to account for during production: Inventory in process, November 1 420 Started into production 15000 Total units accounted for 15420 Units to be assigned costs: Whole Units % Materials EUP-Materials % Conversion EUP-Conversion Transferred to finished goods in November 15020 100 15020 100 15020 Inventory in process, November 30 400 100 400 70 280 Total units to be assigned costs 15420 15420 15300 Cost Information Costs per equivalent unit: Costs Material Conversion Total Total costs for November $ 36237 32059 68296 Total equivalent units 15420 15300 Cost per equivalent unit $ 2.35000 2.09536 4.44536 Costs assigned to production: Inventory in process, November 1 1307 Costs incurred in November 66989 Total costs accounted for $ 68296 Costs allocated to completed and partially completed units: Transferred to finished goods in November $ (15020 x $4.44536) 66769 Inventory in process, November 30 [(400 x $2.35) + (280 x $2.09536)] 1527 Total costs assigned $ 68296

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