Don’t Cry Over Spilled Milk, Inc., a manufacturer of mops, uses the weighted ave

Question

Don’t Cry Over Spilled Milk, Inc., a manufacturer of mops, uses the weighted average method in its processing costing system. Don’t Cry uses a traditional costing system in the allocation of its manufacturing overhead (MOH) to production; MOH costs are allocated to production on the basis of machine hours logged during the period. Total estimated MOH for the period was $300,000 and total estimated machine hours were 100,000. The following data concern the operations of the company’s first processing department, Assembly, for June 2012.

During? June, 79,325 actual machine hours were logged during production.

Beginning Work in Process 800 mops, ?60% complete with respect to direct? materials, 10% complete with respect to conversion Costs in Beginning Work in Process $3,712 (of this amount, $1,296 is for direct ?materials) Units Started in June 16,000 mops Direct Product Costs Added During June direct materials $47,076; direct labor ?$216,213 Ending Work in Process 300 mops, 60% completed with respect to direct materials, 70% complete with respect to conversion

Explanation / Answer

Weighted average cost Beggining units 800 Transferred out 16,500 Started intro production 16000 Ending units 300 Units accounted for 16800 16800 Equivalent units Material Conversion cost Units transferred                      A 16500 16500 Ending Units 300 300 Completion 60% 70% B 180 210 Total units 16680 16710 Cost per equivalent units Particulars Material Conversion cost total As at beginning 1296 2416 3712 Added during the month 47076 454188 501264 Cost to be accounted for 48372 456604 504976 Total eqivalent units 16680 16710 Cost per equivalent unit 2.90 27.33 30.23 Cost per equivalent unit = Cost to be accounted for / Total equivalent units Cost of ending work in progress Conversion cost Particulars Material Total Ending units 300 300 Cost per equivalent units 2.90 27.33 Completion 60% 70% Total cost 522 5738 6260 Cost of goods transferred Conversion cost Particulars Material Total Number of units 16500 16500 Cost per equivalent units 2.90 27.33 30.23 Total amount 47850 450866 498716 Reconciliation report Cost of goods transferred 498716 Add Work in proress ending Material                                      522 Conversion cost                        5738 6260 Total cost accounted for 504976

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