Kimbeth Manufacturing uses a process cost system to manufacture Dust Density for

Question

Kimbeth Manufacturing uses a process cost system to manufacture Dust Density for the mining industry. The following information pertains to operations for the month of May 2015: Units Beginning work-in-process, May 1 10,000 Started in production during May 90,000 Completed production during May 84,000 The beginning inventory was 50% complete for materials and 30% for conversion costs. The ending inventory was 60% complete for materials and 25% complete for conversion costs. Costs pertaining to the month of May are as follows: Beginning inventory costs are materials, $54,560; Conversion costs $35.560. Costs incurred during May are materials used, $468,000; conversion costs $574,040. Using the weighted-average method, prepare a complete production cost report showing the computations of: equivalent units of production for materials and conversion costs. The costs per equivalent unit for materials and conversion costs. The cost of ending work-in-process inventory and the cost of the units transferred out to the next department, and a cost reconciliation report for the month.

Explanation / Answer

Material Conversion Total

Calculation of Equivalent Units MATERIAL CONVERSION Opening Units 10000 10000 Introduced & completed during the month 74000 74000 Closing Units 9600 4000 Total Equivalent Units 93600 88000 Calculation of cost per equivalent unit MATERIAL CONVERSION TOTAL Opening Cost 54560 35560 Cost Incurred during the month 468000 574040 Cost to be accounted for 522560 609600 Total Equivalent Units 93600 88000 Unit Cost 5.58 6.93 12.51

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