(a) Prepare a production cost report for the month of October. (Round cost per e

Question

(a)

Prepare a production cost report for the month of October. (Round cost per equivalent unit to 4 decimal places, e.g. 15.2550 and other answers to 0 decimal places, e.g. 150.)

Cost per Equivalent Unit Calculation

Material

Labor

Overhead

Total

Cost

Beginning work in process

Cost incurred during October

Total

Units

Units completed

Equivalent units

Ending work in process

Total

Cost per equivalent unit

Cost Reconciliation

Total cost to account for

Cost of completed units

Cost of ending WIP

Total cost accounted for

b.

Prepare the journal entry to recognize the transfer of the units completed and transferred to finished goods during October.

account list:

Cost of Goods Sold
Finished Goods Inventory
Material Inventory
Manufacturing Overhead
Wages Payable
Work in Process Inventory

Kao Tiles, Inc., is a specialized producer of ceramic tiles. Its production process involves highly skilled workers and top-quality ceramic craftsmen. Work in Process is relatively large because each tile is in process for up to three weeks because of art, mold work, and drying time. October began with 5,370 units (a unit is 1 ceramic tile) in process, on average 60 percent complete as to direct materials and 40 percent complete as to conversion costs; 6,220 units were started during the month, and ending Work in Process inventory consisted of 6,310 units that were on average 80 percent complete as to direct materials and 60 percent complete as to conversion costs.
Cost Information Beginning Work in Process Costs Added in October Direct material $166,700 $402,800 Direct labor 170,000 1,016,000 Manufacturing overhead 49,800 101,500

Explanation / Answer

Equivalent units

cost

Cost transferred (5280 *55.14 + 5280 *130.82 + 5280* 16.69) = 1,069,984

Ending WIP ( 5048*55.14 + 3786*130.82 + 3786* 16.69)          =836,816

Total cost to account for                                             $1,906,800

Cost of completed units                                                1,069,984

Cost of ending WIP

Materials                                                                                 278,354

Labor                                                                                      495,279

Overhead                                                                                  63,183

Total                                                                                          $836,816

total cost accounted for                                                      $1,906,800

Entry

DR Finished goods 1,069,984

Cr   To Work in progress               $1,069,894

Beginning work in progress 5,370 completed 5,280 Started during the year 6,220 ending Work in progress 6,310 Units to be accounted 11,590 Units accounted for 11,590

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