43) Venosis Sports is a manufacturer of sportswear. It produces all of its products in one department. The information for the current month is as follows:

Beginning work in process 22,000 units

Units started 44,000 units

Units completed 55,000 units

Ending work in process 10,000 units

Spoilage 1,000 units

Beginning work-in-process direct materials $15,000

Beginning work-in-process conversion $ 6,000

Direct materials added during month $70,800

Direct manufacturing labor during month $37,400

Beginning work in process was half complete as to conversion. Direct materials are added at the beginning of the process. Factory overhead is applied at a rate equal to 50% of direct manufacturing labor. Ending work in process was 60% complete. All spoilage is normal and is detected at end of the process.

Required:

Prepare a production cost worksheet if spoilage is recognized and the weighted-average method is used.

Answer: PRODUCTION COST WORKSHEET

Flow of Production Physical units Direct materials Conversion

Work in process, beginning 22,000

Started during period 44,000

To account for 66,000

Good units completed 55,000 55,000 55,000

Normal spoilage 1,000 1,000 1,000

Work in process, ending 10,000 10,000 6,000

Accounted for 66,000 66,000 62,000

Costs Totals Direct Materials Conversion

Work in process, beginning $ 21,000 $15,000 $ 6,000

Costs added during period 108,200 70,800 37,400

Total costs to account for 129,200 85,800 43,400

Divided by equivalent units 66,000 62,000

Equivalent unit costs $ 2.00 $ 1.30 $ 0.70

Assignment of costs

Costs transferred out (55,000 $2.00) $ 110,000

Normal spoilage (1,000 $2.00) 2,000

Work in process, ending

Direct materials (10,000 $1.30) 13,000

Conversion (10,000 $0.60 0.70) 4,200

Costs accounted for $129,200

I HAVE A QUESTION OF WHERE TO GET $0.60 AND 0.70 FROM THE CONVERSION (THE SECOND LAST LINE)