Question
Nakatihaya, Inc., manufactures beds that passes through two processes: Cutting and Assembly. All manufacturing costs are added uniformly in the Cutting Department. Information for the
Nakatihaya, Inc., manufactures beds that passes through two processes: Cutting and Assembly. All manufacturing costs are added uniformly in the Cutting Department. Information for the Cutting Department for December follows:
Work in process, December 1:
Units (50% Complete) 5,000
Units Direct materials P10,000
Direct labor P4,000
Overhead P1,000
During December, 55,000 units were started but only 50,000 units were completed and transferred to Assembly. The following costs were incurred by the Cutting Department during December:
Direct materials P100,000
Direct labor 30,000
Overhead 20,000
There were 10,000 units remaining in the Cutting Department on December 30 that were 50 percent complete.
On January 1, the Assembly Department had 5,000 WIP units in beginning inventory that were 30 percent complete. On January 31, 10,000 WIP units were in ending inventory, 50% complete. The costs associated with the 5,000 units in beginning inventory were as follows:
Transferred in P70,000
Direct Materials P54,000
Direct labor P8,000
Overhead P4,000
During January, the Assembly Department received 50,000 units from the Cutting Department. 45,000 units were transferred to finished goods. Costs added by Assembly during January included
Direct materials P96,000
Direct labor P40,000
Overhead P8,000
Prepare a cost of production report using the weighted average and FIFO methods for Cutting and Assembly.
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