The Company uses a single department production process. Materials are added at
ID: 2549487 • Letter: T
Question
The Company uses a single department production process. Materials are added at the start of the production process and labor and overhead are added as indicated. For January 2018, the Company records have the following information:
UNITS:
Beginning WIP: 10,000 units
100% complete for materials, 50% complete for labor; 3% complete for overhead
Units started in process 50,000 units
Units completed 49,000 units
Ending WIP: 11,000 units
100% complete for materials, 60% complete for labor; 20% complete for overhead
PRODUCTION COSTS:
Work in Process, Beginning of the Month:
Materials $ 22,000
Labor 18,000
Overhead 11,000 51,000
Current Month Costs:
Materials $ 320,000
Labor 180,160
Overhead 152,840 653,000
Total Costs: $ 704,000
Prepare a Cost of Production Summary using the weighted average method (calculations for equivalent units of production, cost per equivalent unit of production, total cost for units completed and WIP, ending). Prepare your calculations for Materials, Labor, and Overhead separately. Prepare the appropriate journal entries at month end.
Explanation / Answer
journal entries -
Please commnent in case of further clarification required/wrong answer.
physcial units Material Labor overhead Beginning WIP 10000 100% 50% 3% unit started in production 50000 Units completed 49000 Ending WIP 11000 100% 60% 20% Material Labor overhead A Cost of beginning WIP 22000 18000 11000 B Costs incurred during the month 320000 180160 152840 C Total cost incurred (A+B) 342000 198160 163840 physical units Material Labor overhead A Units completed 49000 49000 49000 49000 B Ending WIP 11000 11000 6600 2200 C Total Equivalent units(A+B) 60000 60000 55600 51200 Computation of equivalent unit cost for all expenses Material Labor overhead A Total costs incurred done to date 342000 198160 163840 B Total Equivalent units (Given) 60000 55600 51200 C Equivalent cost per unit (A/B) 5.70 3.56 3.20 Calcualation of equivalent cost per unit and assign cost to the units completed and units Ending WIP Material Labor overhead A Equivalent cost per unit 5.70 3.56 3.20 B units completed and transferred out 49000 49000 49000 C Cost assign to completed units (A*B) 279300 174637.4 156800 D WIP, Ending Equivalent units 11000 6600 2200 E Cost assign to WIP, Ending units (D*A) 62700 23522.59 7040Related Questions
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