Question
Gianna's Office Supplies manufactures desk organizers in its Production Department. Direct materials are added at the beginning of the process and conversion costs are incurred
Gianna's Office Supplies manufactures desk organizers in its Production Department. Direct materials are added at the beginning of the process and conversion costs are incurred evenly throughout the production cycle. Inspection takes place at the end of the process and spoiled units generally constitute 4% of the good units.
Data provided for April are as follows:
WIP, beginning inventory April 1 25,000 units
Direct materials (100% complete)
Conversion costs (50% complete)
Started during April 82,000 units
Completed and transferred out 81,000 units
WIP, ending inventory April 30 15,000 units
Direct materials (100% complete)
Conversion costs (25% complete)
Costs:
WIP, beginning inventory:
Direct materials $150,000
Conversion costs 44,000
Direct materials added 209,916
Conversion costs added 109,893
Required: Prepare a production cost report using weighted-average for the production department. Ensure you identify any spoilage in your report.
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