The inventory at May 1 and the costs charged to work in process-department B dur
ID: 2369239 • Letter: T
Question
The inventory at May 1 and the costs charged to work in process-department B during May for Stella Company are as follows.Beginning WIP, 12,000 UNITS, 60% completed - 62,400
From Department A, 55,000 units started this period:
Direct materials added - 115,500
Direct Labor incurried - 384,915
Factory overhead incurred - 138,000
During May all direct materials are transferred from Department A, the units in process at May 1 were completed and of the 55,000 units entering the department, all were completed except 6,000 units which were 70% completed. Inventories are casted by the FIRST-IN-FIRST OUT METHOD.
* PREPARE A COST PRODUCTION REPORT FOR MAY***
Explanation / Answer
COST OF PRODUCTION REPORT Units to account for Physical units Beginning WIP 12,000 Started during period 55,000 Total units to account for 67,000 Equivalent units Units accounted for: Materials Conversion Beginning WIP 12,000 0 4,800 (12,000 x 40% incomplete = 4800) Started & completed 49,000 49,000 49,000 Ending WIP 6,000 6,000 4,200 (6,000 x 70% complete = 4,200) Total units accounted for 67,000 55,000 58,000 Unit Costs calculation: Total costs (1) $115,500 $522,915 Equivalent units (2) 55,000 58,000 Unit costs (1)/(2) $ 11.12 $ 2.10 $9.02 Costs to account for: Direct materials $115,500.00 Direct labor $384,915.00 Factory overhead $138,000.00 Costs for period $638,415.00 Beginning WIP $62,400.00 Total costs to account for $700,815.00 Costs accounted for: WIP - Beginning costs $62,400 Direct materials 0 Conversion (4800 units x $9.02) $43,275.72 Total costs to process beginning units $105,675.72 Started & Completed (49,000 x $11.12) $ 544,673.02 Total costs transferred out $650,348.74 Ending WIP: Materials (6000 units x $2.10) $ 12,600.00 Conversion (4200 units x $9.02) $37,866.26 Total cost of ending WIP $ 50,466.26 Total costs accounted for = $700,815.00
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