zither co. manufactures a product called zens in ... Question Zither Co. manufac

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zither co. manufactures a product called zens in ... Question Zither Co. manufactures a product called Zens in a three-process series. All materials are introduced at the beginning of the first process. Zither uses the first-in, first-out method of inventory costing. Unit and cost data for the first process (Department A) for the month of October 2012 follow: Conversion Units: Completion: Cost Work in process inventory: October 1 12,000 60% $140,400 October 31 5,000 40% ? Started in October >>>> units = 14,000 Direct materials cost >>>cost = 106,400 Conversion cost >>> cost = 70,310 Completed in October>>units = 21,000 cost =? Prepare Zither's Department A cost of production report for October.

Explanation / Answer

Date Particulars Units Percentage completed Cost Oct-01 Opening 12000 60% 140000 Oct-31 Closing 5000 40% Production Particulars during the month for 14000 units Direct Materials 106400 Conversion Cost 70310 Total Cost 176710 Units completed= 21000 Units produced in Oct= 14000 Hence, remaining 21000-14000= 7000 units of the opening were completed Cost of completion of 7000 units= ((140000/12)/60%)*40%*7000=      54,444.44 Hence the total costs incurred in Oct= 176710+54444.44= 2,31,154.44

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