Question
ROMALY, INC. has several processing departments. Costs charged to the Forming Department for December 2011 totaled $1,467,000 as follows: Work in Process, December 1 Materials
ROMALY, INC. has several processing departments. Costs charged to the Forming Department for December 2011 totaled $1,467,000 as follows:
Work in Process, December 1 |
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|
|
Materials |
| $ 103,400 |
|
Conversion costs |
| 60,000 | $ 163,400 |
Costs Added: |
|
|
|
Materials added |
| $ 1,100,800 |
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Labor | $ 100,000 |
|
|
Manufacturing Overhead | 102,800 |
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|
Total Conversion Costs |
| 202,800 |
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Total Cost added |
|
| 1,303,600 |
Total Department Costs |
|
| $ 1,467,000 |
Production records show that:
1. 60,000 units were in beginning work in process inventory
a. 25% complete as to materials costs
b. 70% complete as to conversion cost
2. 410,000 units were started into production
3. 40,000 units were in ending work in process inventory
a. 40% complete as to materials costs
b. 20% complete as to conversion costs.
Required:
a. Compute the physical unit flow, step 1.
b. Determine the equivalent units of production for materials and conversion costs, step 2.
c. Compute the unit cost of production, step 3.
d. Determine the costs to be assigned to the units transferred out and in process.
e. Prepare a production cost report for the Forming Department for the month of December.
FOUR SPETS TO PREPARE PRODUCTION COST REPORT
FORMING DEPARTMENT INFORMATION | |||
| |||
WIP, Dec/1 (Beginning Inventory) | |||
DIRECT MATERIALS: _____________Units X _____% COMPLETED |
| ||
CONVERSION COSTS: _____________Units X _____ %COMPLETED |
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UNITS STARTED IN PRODUCTION DURING DECEMBER |
| ||
UNITS COMPLETED AND TRANSFERRED OUT TO PACKING |
| ||
WIP, Dec/31 (Ending Inventory) | |||
DIRECT MATERIALS: _____________Units X _____% COMPLETED |
| ||
CONVERSION COSTS: _____________Units X _____% COMPLETED |
| ||
C O S T S | |||
WIP, Dec/1 (Bebinning Inventory) | |||
DIRECT MATERIALS | $ | ||
CONVERSION COSTS |
| ||
TOTAL COST OF WIP, Dec/1 (Beginning Inventory) | $ | ||
COSTS ADDED DURING PRODUCTION IN DECEMBER | |||
DIRECT MATERIALS | $ |
| |
CONVERSION COSTS (DL $_________ + MOH $__________) |
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| |
TOTAL COST ADDED IN DECEMBER |
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| |
TOTAL COST AS OF DECEMBER 31 |
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| |
Part a. Compute the physical units flow (step 1).
FORMING DEPARTMENT | |
PHYSICAL UNITS TO BE ACCOUNTED FOR | |
WIP, Dec 1 (Beginning Inventory) |
|
STARDED (TRANSFERRED) INTO PRODUCTION |
|
TOTAL UNITS |
|
|
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COMPLETED AND TRANSFERRD OUT |
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WIP, Dec 31 (Ending Inventory) |
|
TOTAL UNITS |
|
Part b. Determine the equivalent units of production for materials and conversion costs (step 2).
FORMING DEPARTMENT | ||
EQUIVALENT UNITS | ||
| MATERIAL | CONVERSION COSTS |
UNITS TRANSFERRED OUT |
|
|
WIP, Dec 31 (Ending Inventory) MATERIALS |
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|
WIP, Dec 31 (Ending Inventory)CONVERSION COST |
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|
TOTAL EQUIVALENT UNITS |
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|
Part c. Compute the unit cost of production (Sept 3).
STEP 3: COMPUTE UNIT PRODUCTION COSTS (15 Puntos) | ||
FORMING DEPARTMENT | ||
M A T E R I A L C O S T S PER UNIT | ||
WIP, Dec 1 (Beginning Inventory) Direct Material | $ | |
Material Costs incurred or added into production during December |
| |
Total Material Costs | $ | |
TOTAL MATERIAL COSTS / EQUIVALENT UNITS = UNITS MATERIAL COST $_____________ DIVIDIDO ENTRE ___________ = $________
| ||
C O N V E R S I O N C O S T S PER UNIT | ||
WIP, Dec 1 (Beginning Inventory) Conversion costs | $ | |
Conversion costs incurred or added into production during December |
| |
TOTAL CONVERSION COSTS | $ | |
TOTAL CONVERSION COSTS / EQUIVALENT UNITS = UNIT CONVERSION COST $__________ DIVIDIDO ENTRE ___________ = $_________
| ||
MATERIAL UNIT COST | $ | |
CONVERSION UNIT COST |
| |
TOTAL MANUFACTURING UNIT COST | $ | |
Part d. Determine the costs to be assigned to the units transferred out and in process (Step 4)
FORMING DEPARTMENT | ||
C O S T RECONCILIATION REPORT | ||
COST ACCOUNTED FOR | ||
WIP, Dec 1 (Beginning Inventory) | $ | |
STARTED INTO PRODUCTION |
| |
TOTAL COSTS | $ | |
COST ACCOUNTED FOR | ||
Completed & Transferred Out | $ | |
WIP Ending Inventory- Dec 31 MATERIALS | $ |
|
WIP Ending Inventory- Dec31 CONVERSION COSTS |
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|
TOTAL WIP Dec 31 (Ending Inventory) |
| |
TOTAL COSTS | $ |
Part e. Prepare a production cost report for the Forming Department for the month of December.
FORMING DEPARTMENT | |||||||||
PRODUCTION COST REPORT | |||||||||
FOR THE MONTH ENDED DECEMBER 31, 2011 | |||||||||
STEPS 1 AND 2
| |||||||||
| PHYSICAL UNITS |
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UNITS TO BE ACCOUNTED FOR | STEP 1 | ||||||||
WIP, Dec 1 (Beginning Inventory) |
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STARTED INTO PRODUCTION |
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TOTAL UNITS |
| STEP 2 | |||||||
| STEP 1 | EQUIVALENT UNITS | |||||||
UNITS TO BE ACCOUNTED FOR | PHYSICAL UNITS | MATERIALS | CONVERSION COSTS | ||||||
TRANSFERRED OUT |
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WIP, Dec 31 (Ending Inventory) |
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TOTAL UNITS |
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STEP 3
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U N I T C O S T S | |||||||||
COSTS |
MATERIALS | CONVERSION COSTS |
TOTAL | ||||||
TOTAL COSTS AS OF DECEMBER | (a) | $ | $ | $ | |||||
EQUIVALENT UNITS | (b) |
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UNIT COST a/b |
| $ | $ | $ | |||||
STEP 4
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C O S T ACCOUNTED FOR | |||||||||
WIP, Dec 1 (Beginning Inventory) | $ | ||||||||
STARTED INTO PRODUCTION |
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TOTAL COST FOR THE MONTH OF DECEMBER | $ | ||||||||
COST RECONCILIATION SCHEDULE | |||||||||
Completed & Transferred Out | $ | ||||||||
WIP Ending Inventory-Dec 31-Direct Material Costs(Equivalent Units) | $ |
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WIP Ending Inventory-Dec 31-Conversion Costs (Equivalent Units) |
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Total Costs WIP Ending Inventory-Dec 31 (Based on equivalent units) |
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TOTAL COST FOR THE MONTH OF DECEMBER 2011 | $ | ||||||||
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