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the owner of fino linens inc., a manufacturer of bed and bath linens, insisted o

ID: 2483381 • Letter: T

Question

the owner of fino linens inc., a manufacturer of bed and bath linens, insisted on a formal report that provided all the details of the weighted average method. In the manufacturing process, all materials are added at the beginning. The following data are for the bath linens department for August:

Production

units in process, August 1, 60 percent complete 20,000

units completed and transferred out 60,000

units in process, August 31, 60 percent complete 15,000

Costs

Work in Process, August 1 (Direct materials $6,500 & Conversion $5,020) $11,520

Current costs (Direct Materials $20,000 & Conversion $52,000) $72,000

Total $83,520

Required:

Prepare a cost of production report for the bath linens department for August using the weighted average method.

Explanation / Answer

Ans) Production Units in Process,August 1st 60% complete 20000 Units completed & transferred out 60000 Units in Process,August 31st 60% complete 15000 Ending WIP completed 0.6 Costs WIP,August 1st $          11,520.00 Current cost $          72,000.00 Total $          83,520.00 Fino Linens Inc. Bath Linens Department Production Report For the month of August Weighted Average Method Unit Information Units Inflow Units Outflow Units in beginning WIP 20000 Units completed 60000 Units started 55000 Ending WIP 15000 Total 75000 Total 75000 Equivalent units Units completed 60000 Units in ending WIP 9000 Total Equivalent Units 69000 Cost Information Cost to account for: Beginning WIP $          11,520.00 Cost added during August $          72,000.00 Total Cost $          83,520.00 Cost Per Equivalent unit $                     1.21 Transferred Out Ending WIP Total Goods transferred out $          72,626.09 $    72,626.09 Ending WIP $            10,893.91 $    10,893.91 Total Cost accounted for $          72,626.09 $            10,893.91 $    83,520.00