Exercise 16-6 (Part Level Submission) Production Costs (a) Materials Conversion

Question

Exercise 16-6 (Part Level Submission)

Production

Costs

(a)

Materials

Conversion Costs

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(b1)

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(b2)

Cost Reconciliation

Costs accounted for

   Transferred out

   Work in process, July 31

      Materials

      Conversion costs

         Total costs

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Exercise 16-6 (Part Level Submission)

The Cutting Department of Cassel Company has the following production and cost data for July.

Production

Costs

1. Transferred out 13,000 units. Beginning work in process $0 2. Started 4,600 units that are 60% Materials 68,816 complete as to conversion Labor 11,472 costs and 100% complete as Manufacturing overhead 23,200 to materials at July 31.
Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process.

Explanation / Answer

1) Equivalent unit of production:

Compute unit cost

Material = 68816/17600 = 3.91

Conversion = 34672/15760 = 2.20

(b2)

Prepare a cost reconciliation schedule.

Material Conversion Unit transferred out 13000 13000 Ending work in process 4600 4600*60% = 2760 Equivalent unit of production 17600 15760

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