Aussie Yarn Co. is a U.S. producer of woolen yarn made from wool imported from A

Question

Aussie Yarn Co. is a U.S. producer of woolen yarn made from wool imported from Australia. Raw wool is processed, spun, and finished before being shipped out to knitting and weaving companies. Material is added in the beginning of processing, and conversion costs are added evenly throughout processing.
Aussie began the month of August with 6,500 units in process that were 100 percent complete as to materials and 70 percent complete as to labor and overhead. It started 29,700 units into production during the month of August of which 5,400 remained in ending Work in Process inventory and were 50 percent complete as to conversion costs. The cost data are as follows:


Beginning Work in Process:
Direct materials $5,400
Direct labor 1,400
Manufacturing overhead 2,260

Costs added during August:
Direct materials $28,266
Direct labor 14,680
Manufacturing overhead 16,500
Prepare a production cost report for the month of August. (Round cost per equivalent unit to 2 decimal places, e.g. 5.25 and all other answers to 0 decimal places, e.g. 125.)

Unit Reconciliation



Units to account for



Units accounted for
Cost per Equivalent Unit Calculation

Material Labor Overhead Total
Cost
Beginning WIP $ $ $ $
Cost incurred during Sept.
Total $ $ $ $

Units
Units completed
Equivalent unit ending WIP
Total

Cost per equivalent unit $ $ $ $
Cost Reconciliation

Total cost to account for $

Cost of completed units $
Cost of ending WIP
Material $
Labor
Overhead
Total cost accounted for $

Explanation / Answer

Particulars Materials Conversion cost (labor and overhead) Work in process Equivalent units 6500 = 6500 *70%              (b) 6500 4550 Total Amount (a) 5400 3660 Cost per equivalent unit (a/b)                                       0.83                                                           0.80 Processed during the month Opening work in process: Equivalent units 0 = 6500*30% 0 1950 Finished (29700-5400) units 24300 24300 Work in process - equivalent units = 5400*100% = 5400*50% 5400 2700 Total equivalent units ( c) 29700 28950 Total cost incurred ($) (d) 28266 31180 Cost per equivalent unit (d/c)                                       0.95                                                           1.08 Opening Work in process Opening value Materials 5400 Conversion cost 3660 Conversion cost incurred during month = 1.08*1950 2106 Total cost 11166 Units finished 6500 Goods processed during month and finished units Amount Opening WIP (finished ) 6500 11166 Processed and finished during month 24300 Materials (24300 * 0.95) 23085 Conversion cost (24300*1.08) 26244 Total finished goods 30800 60495 Ending Work in process Materials Conversion cost (labor and overhead) Equivalent units (a) 5400 2700 Cost per equivalent unit (b) 0.95 1.08 Total (a*b) 5130 2916 Total ending work in process = 5130+2916 8046

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.