CASE 2 COST OF PRODUCTION SUMMARY: WEIGHTED AVERAGE AND FIFO METHODS

The Company uses a single department production process. Materials are added at the start of the production process and labor and overhead are added as indicated. For January 2018, the Company records have the following information: UNITS: Beginning WIP: 10,000 units

100% complete for materials, 50% complete for labor; 3% complete for overhead

Units started in process 50,000 units

Units completed 49,000 units

Ending WIP: 11,000 units

100% complete for materials, 60% complete for labor; 20% complete for overhead

PRODUCTION COSTS:

Work in Process, Beginning of the Month: Materials $ 22,000 Labor 18,000 Overhead 11,000 51,000

Current Month Costs: Materials $ 320,000 Labor 180,160 Overhead 152,840 653,000 Total Costs: $ 704,000

Prepare a Cost of Production Summary using the FIFO method (calculations for equivalent units of production, cost per equivalent unit of production, total cost for WIP, beginning, units started and completed and WIP, ending). Prepare your calculations for Materials, Labor, and Overhead separately. Prepare the appropriate journal entries at month end.