eBook Calculator Equivalent units and related costsi cost of proxluction report;

Question

eBook Calculator Equivalent units and related costsi cost of proxluction report; entries Cost of Production Report Journal Final Questions manufactures flour by a sesies of three processes, beginning with wheat grain being introduced in the Mling Department From the Miling Department, the materials White Diamond Flour Company pass through the Siting and Packaging departments, emerging as packaged refined flour The balance in the account Work in Process-Siting Department was as fellows on July 1, 2016 Work in Process Sifting Department (rso unts. completed) Direct materials (750 $2 25) $1,688 Conversion(750 ? SO 40) 180 $1,068 The tolloving costs were charged to Work in Process-Sifting Department during July Direct materials transferred from Milling Department 38,540 16,400 units al $2 35 a unit Previous All work saved

Explanation / Answer

Solution 1:

Solution 2:

Solution 3:

Change in direct material cost per equivalent unit from june to july = $2.35 - $2.25 = $0.10 Increase

Change in direct labor cost per equivalent unit from june to july = $0.45 - $0.40 = $0.05 Increase

Solution 4:

The cost of production report may be used as the basis for allocating product costs between Goods transferred and units in ending WIP. The report can also be used to control costs by holding each department head responsible for the units entering production and cost incurred in the department. Any differences in unit product costs from one month to another such as those in part 3 can be studied carefully and any significant differences investigated.

White Diamond Flour Company Sitting Department Computation of Equivalent unit (FIFO) Particulars Physical units Material Conversion Units to be accounted for: Beginning WIP Inventory 750 Units started this period 16400 Total unit to be accounted for 17150 Units Accounted for: Units completed and transferred out From beginning inventory
Material - 0%
Conversion - 2/5 750 0 300 Started and completed currently 15300 15300 15300 Units in ending WIP
Material - 100%
Conversion - 4/5 1100 1100 880 Total units accounted for 17150 16400 16480

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