MIDTERM-EXAM-SOLUTION-FALL-2016 [Compatibility Mode) nces Mailings Review View T

Question

MIDTERM-EXAM-SOLUTION-FALL-2016 [Compatibility Mode) nces Mailings Review View Table Design Layout No Spacing Heading 1 Heading 2 Ttle Sweet Corporation is in the dairy manufacturing business. Products go through two production departments (A first, then B). Data from those departments for October 2016 are presented below Department A Department B Beginning work in process Beginning work in process 200 Number of units % complete for materials % complete for transferred-in % complete for conversion Total materials cost Total conversion cost Total transferred-in costs 1,000 100% 00% 30% 60% $24,000 S30,000 Department A Ending work in process 600 100% $40,000 15,000 Department B Ending work in process 300 Number of units % complete for materials % complete for transferred-in % complete for conversion 100% 40% 30% Sweet Corporation started 2,600 units of product during the month in department A. Costs incurred in department A for October 2016 totalled $64,000 for material and $132,000 for conversion. Department A transferred out its product to Department B at average cost $75.3878 per unit. Additionally, department B incurred conversion costs in September 2016 of $600,000. Department B adds no materials to the product. Instructions Prepare a production cost report for department B for October 2016. Sweet Corporation accounts for its costs using the weighted-average method.

Explanation / Answer

Sweet Corporation Department B Cost of Production Report For the month of October 2016 Quantity schedule : Beginning work in process 200 Add : Tranferred in from Department A 3000 3200 Units completed and transferred 2900 Units in ending work in process 300 3200 Cost charged to Department Transferred in Conversion Total cost Beginning work in process $40,000.00 $15,000.00 $55,000.00 Cost added $226,163.40 $600,000.00 $826,163.40 Total cost to be accounted for $266,163.40 $615,000.00 $881,163.40 Cost accounted as follows Transferred in Conversion Total cost Completed and transferred out Transferred in (2900 units *$83.18) $241,210.58 $241,210.58 Conversion (2900 units * $203.64) $590,562.91 $590,562.91 Cost of completed and transferred out units $831,773.50 Ending work in process Transferred in (300 units *$83.18) $24,952.82 $24,952.82 Conversion (120 units * $203.64) $24,437.09 $24,437.09 Cost of ending work in process $49,389.90 Total Cost accounted for $881,163.40 Working Calculation of completed units transferred from Department A to B. Department A No.of Units Beginning work in process 1000 Add : Units started 2600 Less : Ending work in process 600 Completed Units 3000 Calculation of completed units of Department B. Department B No.of Units Beginning work in process 200 Add : Units transferred in 3000 Less : Ending work in process 300 Completed Units 2900 Calculation of equivalent units of Department B Physical Units % complete with respect to transferred in cost Equivalent Units for transferred in % complete with respect to conversion cost Equivalent Units for conversion Ending work in process 300 100% 300 40% 120 Completed units 2900 100% 2900 100% 2900 Equivalent Units 3200 3020 Calculation of cost per equivalent unit for Department B transferred in Conversion Beginning work in process $40,000.00 $15,000.00 Cost added $226,163.40 $600,000.00 Total Cost to account for $266,163.40 $615,000.00 / Equivalent units 3200 3020 Cost per equivalent unit $83.18 $203.64

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