MP Corporation adds all materials at the beginning of production. On August 1, 20X1, 2,500 gallons of its product were in production in the first department. During the month of August, 7,500 gallons were put into production. On August 31, 2,000 gallons were still in production. The ending inventory is estimated to be 60 percent complete as to labor and overhead. Cost data for the month follows:

INSTRUCTIONS
Prepare a cost of production report for the month of August, assuming that the average cost method is used.

Analyze: How many gallons of product will be held as beginning inventory of work in process on September 1 for the first department? What is the total cost for this quantity of product?

Transcribed Image Text:

Beginning inventory of work in process Added during August Materials $ 9,500 54,000 Labor $ 6,000 34,000 Overhead $ 3,600 13,600