Ghose Company manufactures basketballs. Materials are added at the beginning of

Question

Ghose Company manufactures basketballs. Materials are added at the beginning of the production process and conversion costs are incurred uniformly. Production and cost data for the month of July 2011 are as follows.

Production Data-Basketballs Units Percent
Complete
Work in process units, July 1 500 60%
Units started into production 1,000
Work in process units, July 31 600 30%

Cost Data - Basketballs
Work in process, July 1
Materials $750
Conversion costs

600
$1,350
Direct materials 2,400
Direct labor 1,580
Manufacturing overhead 1,060 The equivalent units of production for materials and conversion.

Materials 1,500
Conversion costs 1,080

The unit costs of production for materials and conversion costs.

Unit cost-Materials $ 2.10
Unit cost-Conversion costs $ 3.00

The assignment of costs to units transferred out and in process at the end of the period.

Costs accounted for
Transferred out $ 4,590
Work in process, July 31
Materials $1,260
Conversion cost $540 $1,800
Total costs $6,390

I am having trouble figuring out the rest of this problem, which is the cost report for this company. Can you help, please???

Explanation / Answer

The equivalent units of production for materials and conversion.

Material Conversion cost
Units Amount Units Amount
Balance on July 1 500 750 300 1,350
Addition 1000 2,400 1,000 2,640
Total 1500 3,150 1,300 3,990
Less: Work in process (closing) 600 1,260 180 552
Cost of finished product 900 1,890 1,120 2,838

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