Exercise 16-7 The Sanding Department of Quik Furniture Company has the following

Question

Exercise 16-7

The Sanding Department of Quik Furniture Company has the following production and manufacturing cost data for March 2017, the first month of operation.

Production: 7,020 units finished and transferred out; 3,000 units started that are 100% complete as to materials and 20% complete as to conversion costs.

Manufacturing costs: Materials $37,675; labor $21,400; overhead $38,569.

QUIK FURNITURE COMPANY
Sanding Department
Production Cost Report
For the Month Ended March 31, 2017

Equivalent Units

Quantities

Physical
Units

Materials

Conversion
Costs

Costs

Materials

Conversion
Costs

Total

Cost Reconciliation Schedule

Prepare a production cost report. (Round unit costs to 2 decimal places, e.g. 2.25.)

QUIK FURNITURE COMPANY
Sanding Department
Production Cost Report
For the Month Ended March 31, 2017

Equivalent Units

Quantities

Physical
Units

Materials

Conversion
Costs

Units to be accounted for    Work in process, March 1

   Started into production

      Total units

Units accounted for    Transferred out

   Work in process, March 31

      Total units

Costs

Materials

Conversion
Costs

Total

Unit costs    Total Costs $

$

$

   Equivalent units

   Unit costs $

$

$

Costs to be accounted for    Work in process, March 1 $

   Started into production

      Total costs $

Cost Reconciliation Schedule

Costs accounted for    Transferred out $

   Work in process, March 31       Materials $

      Conversion costs

   Total costs $

Explanation / Answer

UNITS TO ACCOUNT FOR: Beginning Work in Process units 0 Add: Units Started in Process 10,020 Total Units to account for: 10,020 UNITS TO BE ACCOUNTED FOR: Units started and completed 7,020 Ending Work in Process 3,000 Total Units to be accounted for: 10,020 Equivalent Units: UNITS Material Cost Conversion % Completion Units % Completion Units Units started and completed 7020 100% 7,020 100% 7,020 Ending Work in Process 3000 100% 3,000 20% 600 Total Equivalent units 10020 10,020 7,620 COST PER EQUIVALENT UNIT: Material Conversion Total cost added during the year 37,675 59,969 Equivalent Units 10,020 7,620 Cost per Equivalent unit 3.76 7.87 Cost to be accounted for: Work in process Beginning 0 Started in to production 97644 Total Cost 97644 COST RECONICLIATION SCHEDULE: Cost accounted for Transferred out (7020 units @11.63) 81642 Work in process Mar 31 Material 3000*3.76 11280 Conversion 600*7.87 4722 16002 TOTAL COST 97644

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