Pullman Inc. has two production departments. The nature of the process is such t

Question

Pullman Inc. has two production departments. The nature of the process is such that no units remain in process in Finishing at the end of the period. During the period, 10,000 units with a cost of $30,000 were transferred from Assembly to Finishing. Finishing incurred costs of $8,800 for materials, $7,200 for labor, and $8,800 for factory overhead, and finished 10,000 units during the month.

Required:

Determine the unit cost for the month in Finishing.

Determine the unit cost of the products transferred to finished goods.

Prepare a statement of cost of goods manufactured for the month ended January 31, 20XX, assuming that no further work was done in Assembly during January.

Explanation / Answer

1.  unit cost for the month in Finishing = $30000 / 10000 units

= $3

2. unit cost of the products transferred to finished goods = ( $30000 + $ 8800 + $ 7200 + $ 8800) / 10000 units

=$ 5.48

Statement of cost of goods manufactured

Pullman Inc.

cost of goods manufactured

for the month ended January 31, 20XX

Goods transferred from Assembly to Finishing

$30000

Add- manufacturing cost incurred

Material

$ 8800

Labor

$ 7200

Factory overhead

$ 8800

Cost of goods manufactured

$ 54800

Pullman Inc.

cost of goods manufactured

for the month ended January 31, 20XX

Goods transferred from Assembly to Finishing

$30000

Add- manufacturing cost incurred

Material

$ 8800

Labor

$ 7200

Factory overhead

$ 8800

Cost of goods manufactured

$ 54800

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