Kimbeth Manufacturing uses a process cost system to manufacture Dust Density for
ID: 2420000 • Letter: K
Question
Kimbeth Manufacturing uses a process cost system to manufacture Dust Density for the mining industry. The following information pertains to operations for the month of May 2015:
Units
Beginning work-in-process, May 1 10,000
Started in production during May 90,000
Completed production during May 84,000
Ending work-in-process inventory, May 31 16,000
The beginning inventory was 50% complete for materials and 30% for conversion costs. The ending inventory was 60% complete for materials and 25% complete for conversion costs.
Costs pertaining to the month of May are as follows:
Beginning inventory costs are materials, $54,560; conversion costs $35,560.
Costs incurred during May are materials used, $468,000; conversion costs $574,040.
Using the weighted-average method, prepare a complete production cost report showing the computations of:
1) equivalent units of production for materials and conversion costs,
2) the costs per equivalent unit for materials and conversion costs for the month,
3) the cost of ending work-in-process inventory and the cost of the units transferred out to the next department, and
4) a cost reconciliation report for the month.
Explanation / Answer
Equivalent units
Cost per unit 5.59 $6.93
3)Cost of ending inventory = (9600*5.59+4,000 *6.93) = $81,305
Transferred = (84,000*5.59 +84,000*6.93) = $1,050,855
4) Reconcilation
Cost charged = $522,560 + $609,600 = $1,132,160
Cost assigned = $81,305 + 1,050,855 = $1,132,160
Physical units Materials Conversion Started and completed 84,000 84,000 84,000 Ending WIP 16,000 9,600 4,000 units 93,600 88,000Related Questions
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