Application Problem 1 Process Cost Average Cost Flow

Original Data:

Department #1 has 3,000 units of product on beginning inventory, 45% complete to labor and overhead with $9,000 of material costs, $4,547 of labor costs, and $8,950 of overhead costs incurred. Department #1 started enough material to make 47,000 units of product. This material cost a total of $141,000. There was $171,453 of labor charged into Department #1 during the period. Overhead is applied at $5 per machine hour and there were 51,010 machine hours incurred.

There were 40,000 units of product finished in this department and transferred to Department 2. There are 10,000 units still in process in Department #1, 100% complete to materials and 40% complete to labor and overhead.

Test Data:

In Department #2, there is additional material added which cost a total of $83,000 this period. The labor charged to this department was $81,850 representing 10,000 hours and overhead is applied in this department at $16.50 per direct labor hour. Transferred to finished goods were 33,000 units. There were 12,000 units on ending inventory and they are 60% of the way through the department. The material in this department is added at the beginning of the process. Inspection occurs at halfway through the department.

Department #2 had 5,000 units on beginning inventory, 80% complete to labor and overhead with $64,100 transfer-in costs, $11,500 materials cost, $8,600 labor costs, and $15,900 overhead costs incurred.

Required:

Prepare a complete production report for each department using Average cost flow

1. Three worksheets
   1. Data worksheet all information given above
   2. Department 1 worksheet all numbers pulled from data worksheet
   3. Department 2 worksheet all numbers pulled from data worksheet except one number needed from department 1

DEPARTMENT AVERAGE PROCESS COST SUMMARY Units to Account For Beginning WIP Inventory Units started transferred in this period Units Accounted For Completed and transferred out Ending WIP Inventory Total units accounted for Total units to account for Direct Materials Conversion Equivalent Units of Production Units completed and transferred out Units of ending work in process Direct Materials Conversion Equivalent Units of Production Direct Materials Conversion Total Cost per Equivalent Unit Costs of beginning work in process Costs incurred this period Total Costs / by Equivalent Units of Production Cost per EUP Cost Assignment Costs of Units completed and transferred out Direct Materials Conversion Costs of Goods Manufactured Costs of ending work in process inventory $ Direct Materials Conversion Costs of ending work in process inventory Total Costs Accounted for S