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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

Materials

$ 103,400

Conversion costs

60,000

$ 163,400

Costs Added:

Materials added

$ 1,100,800

Labor

$ 100,000

Manufacturing Overhead

102,800

Total Conversion Costs

202,800

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

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 $__________)

TOTAL COST ADDED IN DECEMBER

TOTAL COST AS OF DECEMBER 31

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

COMPLETED AND TRANSFERRD OUT

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

WIP, Dec 31 (Ending Inventory)CONVERSION COST

TOTAL EQUIVALENT UNITS

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

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

UNITS TO BE ACCOUNTED FOR

STEP 1

WIP, Dec 1 (Beginning Inventory)

STARTED INTO PRODUCTION

TOTAL UNITS

STEP 2

STEP 1

EQUIVALENT UNITS

UNITS TO BE ACCOUNTED FOR

PHYSICAL UNITS

MATERIALS

CONVERSION COSTS

TRANSFERRED OUT

WIP, Dec 31 (Ending Inventory)

TOTAL UNITS

STEP 3

U N I T C O S T S

COSTS

MATERIALS

CONVERSION COSTS

TOTAL

TOTAL COSTS AS OF DECEMBER

(a)

$

$

$

EQUIVALENT UNITS

(b)

UNIT COST a/b

$

$

$

STEP 4

C O S T ACCOUNTED FOR

WIP, Dec 1 (Beginning Inventory)

$

STARTED INTO PRODUCTION

TOTAL COST FOR THE MONTH OF DECEMBER

$

COST RECONCILIATION SCHEDULE

Completed & Transferred Out

$

WIP Ending Inventory-Dec 31-Direct Material Costs(Equivalent Units)

$

WIP Ending Inventory-Dec 31-Conversion Costs (Equivalent Units)

Total Costs WIP Ending Inventory-Dec 31 (Based on equivalent units)

TOTAL COST FOR THE MONTH OF DECEMBER 2011

$

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