Score Name Section Problem (10 points). Maryland Company manufactures room air c
ID: 2426549 • Letter: S
Question
Score Name Section Problem (10 points). Maryland Company manufactures room air conditioners. The company uses a process cost system to accumulate production costs and allocate them to finished goods and work in process inventory or the month of August of the current year, the company started with 1,500 units in work in process inventory and started on 3,500 additional units during the month. At the end of August, there were 600 units that remained uncompleted. During the month of August, the company incurred direct materials cost of $364,000 and direct labor cost of$ 136,000. Manufacturing overhead is applied to production at a predetermined rte of 80% of direct materials cost. The beginning work in process inventory contained direct materials cost of S86,000 and conversion costs of $102,000. The production preces rabhhe mamubicutne The production process involves adding materials at various stages during the manufacturing process. Conversion costs are added uniformly during the production process. The beginning work in process inventory was 75% cornplete as to direct materials and 60% complete as to conversion costs. The ending work in process was 60% complete as to direct materials and 45% complete as to conversion costs. The company uses a FIFO cost flow assumption in assigning costs to production and preparing its internal management reports. REQUIRED: Prepare a cost of production report for Maryland Company for the month of August using the attached schedules. Round your computations for costs per equivalent unit to five decimal places. Round all other dollar amounts to the nearest whole dollar.Explanation / Answer
MARYLAND COMPANY
SCHEDULE OF PHYSICAL AND EQUIVALENT UNITS
FOR MONTH OF AUGUST
Physical Units
Equivalent Units
Direct Material
Conversion Costs
Units to Account for :
Beginning WIP Inventory
1500
Units started during period
3500
Total units to Account for
5000
Units Accounted For:
Units Completed During Period:
From Beginning WIP Inventory
1500
375
600
(1500*25%)
(1500*40%)
Units started and completed during period
2900
2900
2900
(3500-600)
(2900*100%)
(2900*100%)
Total Units Completed During the period
4400
3275
3500
Units in ending WIP Inventory
600
360
270
(600*60%)
(600*45%)
Total units Accounted for
5000
3635
3770
MARYLAND COMPANY
UNIT COST ANALYSIS SCHEDULE
FOR MONTH OF AUGUST
Direct Material
Conversion Costs
Total Costs
Cost to Account for:
Cost from Beginning WIP Inventory
$ 86,000.00
$ 102,000.00
$ 188,000.00
Current Period Costs
$ 364,000.00
$ 427,200.00
$ 791,200.00
(136000+364000*80%)
Total Cost to Account for
$ 450,000.00
$ 529,200.00
$ 979,200.00
Divided by Equivalent Units
3635
3770
Cost Per Equivalent Unit
$ 100.1376
$ 113.3156
MARYLAND COMPANY
COST SUMMARY SCHEDULE
FOR MONTH OF AUGUST
Direct Material
Conversion Costs
Total Costs
Cost Accounted For:
Cost from Beginning WIP Inventory
$ 86,000.00
$ 102,000.00
$ 188,000.00
To Complete Beginning WIP Inventory :
Direct Materials (375*100.1376)
$ 37,551.58
$ 37,551.58
Conversion Costs (600*113.3156)
$ 67,989.39
$ 67,989.39
Units started and completed during period:
Direct Materials (2900*100.1376)
$ 290,398.90
$ 290,398.90
Conversion Costs (2900*113.3156)
$ 328,615.38
$ 328,615.38
Total Cost of Units Completed and Transferred to Finished Goods
$ 413,950.48
$ 498,604.77
$ 912,555.26
Ending Work in Process Inventory:
Direct Materials (360*100.1376)
$ 36,049.52
$ 36,049.52
Conversion Costs (270*113.3156)
$ 30,595.23
$ 30,595.23
Total cost of Ending Work in process
$ 66,644.74
Total Cost Accounted For
$ 979,200.00
MARYLAND COMPANY
SCHEDULE OF PHYSICAL AND EQUIVALENT UNITS
FOR MONTH OF AUGUST
Physical Units
Equivalent Units
Direct Material
Conversion Costs
Units to Account for :
Beginning WIP Inventory
1500
Units started during period
3500
Total units to Account for
5000
Units Accounted For:
Units Completed During Period:
From Beginning WIP Inventory
1500
375
600
(1500*25%)
(1500*40%)
Units started and completed during period
2900
2900
2900
(3500-600)
(2900*100%)
(2900*100%)
Total Units Completed During the period
4400
3275
3500
Units in ending WIP Inventory
600
360
270
(600*60%)
(600*45%)
Total units Accounted for
5000
3635
3770
MARYLAND COMPANY
UNIT COST ANALYSIS SCHEDULE
FOR MONTH OF AUGUST
Direct Material
Conversion Costs
Total Costs
Cost to Account for:
Cost from Beginning WIP Inventory
$ 86,000.00
$ 102,000.00
$ 188,000.00
Current Period Costs
$ 364,000.00
$ 427,200.00
$ 791,200.00
(136000+364000*80%)
Total Cost to Account for
$ 450,000.00
$ 529,200.00
$ 979,200.00
Divided by Equivalent Units
3635
3770
Cost Per Equivalent Unit
$ 100.1376
$ 113.3156
MARYLAND COMPANY
COST SUMMARY SCHEDULE
FOR MONTH OF AUGUST
Direct Material
Conversion Costs
Total Costs
Cost Accounted For:
Cost from Beginning WIP Inventory
$ 86,000.00
$ 102,000.00
$ 188,000.00
To Complete Beginning WIP Inventory :
Direct Materials (375*100.1376)
$ 37,551.58
$ 37,551.58
Conversion Costs (600*113.3156)
$ 67,989.39
$ 67,989.39
Units started and completed during period:
Direct Materials (2900*100.1376)
$ 290,398.90
$ 290,398.90
Conversion Costs (2900*113.3156)
$ 328,615.38
$ 328,615.38
Total Cost of Units Completed and Transferred to Finished Goods
$ 413,950.48
$ 498,604.77
$ 912,555.26
Ending Work in Process Inventory:
Direct Materials (360*100.1376)
$ 36,049.52
$ 36,049.52
Conversion Costs (270*113.3156)
$ 30,595.23
$ 30,595.23
Total cost of Ending Work in process
$ 66,644.74
Total Cost Accounted For
$ 979,200.00
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