sheet 2 is the worksheet that should be used to answer the question E5-8. C ost
ID: 2406187 • Letter: S
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sheet 2 is the worksheet that should be used to answer the question
E5-8. C ost of production report; addit ion of material. Marks Inc. produces a cologne, Mi Esencia, which s. In the third department, materials are added, doubling the requires processing in three department mber of units. The following data pertain to the operations of Depatment 3 for March 20,000 32,000 Units received from Department 2 Units transferred to finished goods storeroo The balance of the units are still in process-100% complete As to materials, 50% complete as to labor and overhead Cost transferred from Department 2... Cost added by the department $30,000 $ 8,800 Labor.. Factory Overhead.... 9,000 10,800 28,600 here was no beginning work in process inventory Required: Prepare the following (1) A cost of production report for Department 3 for March (2) The journal entry transferring cost out of Department 3Explanation / Answer
Answer 1. Costs Charged to Production Costs of Beginning WIP - Costs incurred this period 58,600 Total Costs to account for 58,600 Total costs accounted for 58,600 Difference due to rounding cost/unit - Unit Reconciliation Total units accounted for Completed during the period 32,000 Ending WIP 8,000 Total units accounted for 40,000 Equivalent Units of Production (EUP) - Weighted Average Method Units % - Dept. 2 Cost EUP- Deptt. 2 % Material EUP-Materials % Conversion EUP-Conversion Completed during the period 32,000 100% 32,000 100% 32,000 100% 32,000 Ending WIP 8,000 100% 8,000 100% 8,000 50% 4,000 Equivalent Units of Production (EUP) 40,000 40,000 36,000 Cost per EUP Deptt. 2 Materials Conversion Beginning WIP - - - Cost Incurred during the period 30,000 8,800 19,800 Total Costs Costs 30,000 Costs 8,800 Costs 19,800 Equivalent Units of Production (EUP) EUP 40,000 EUP 40,000 EUP 36,000 Cost per Equivalent Units of Production 0.75 0.22 0.55 Cost Assignment and Reconciliation Costs Transferred Out - 32,000 Units EUP Cost per EUP Total Cost Department 2 32,000 0.75 24,000 Direct Materials 32,000 0.22 7,040 Conversion 32,000 0.55 17,600 Total transferred Out 48,640 Costs of Ending WIP - 8,000 Units EUP Cost per EUP Total Cost Department 2 8,000 0.75 6,000 Direct Materials 8,000 0.22 1,760 Conversion 4,000 0.55 2,200 Total Ending WIP 9,960 Total costs accounted for 58,600
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