ing the entries that have already been posted. Assume labor costs are accrued an
ID: 2566164 • Letter: I
Question
ing the entries that have already been posted. Assume labor costs are accrued and not yet paid. P18-43B Preparing a production cost report, second department with Learning Objectives 2, 4,6 beginning WIP; decision making Sea Worthy uses three processes to manufacture lifts for personal watercrafts: forming a lift's parts from galvanized steel, assembling the lift, and testing the completed lift. The lifts are transferred to finished goods before shipment to marinas across the country. 1. Cost per EUP CC $11.00 Sea Worthy's Testing Department requires no direct materials. Conversion costs are incurred evenly throughout the testing process. Other information follows for October 2018: Beginning Work-in-Process Inventory Transferred in from Assembling Department during the period Completed during the period Ending Work-in-Process Inventory (40% complete for conver- 2,300 units 6,800 units 4.100 units 5,000 units sion work) COSTS Beginning Work-in-Process Inventory (transferred in costs, 111,500 $93,400; conversion costs, $18,100) Transferred in from the Assembly Department during the 671,000 period Conversion costs added during the period 49,000Explanation / Answer
Cost of Prduction report (weighted avg method) ProductionDepartment Equivalent Units Flow Of Units Physical Units Direct Material Conversion Cost Units to be accounted for Beginning work in process inventory 2300 Units started this period 160000 Total u nits to be accounted for 162300 Units accounnted for: Completed and transferred out (b) 4100 4100 4100 Ending work in progress inventory c (100% material and 40% conversion) 5000 5000 2000 Total units to be accounted for (f) 9100 9100 6100 Flow of Cost Cost in the begnning work in progress inventory 111500 93400 18100 cost added to process 720000 $671,000 $49,000 Total Cost to be accounted for (e) 831500 764400 67100 Cost per equivalent unit (a) 84.00 11.00 Cost accounted for Cost assigned to units transferred out (a*b) 389500 344400 45100 Cost in ending work in progress inventory (a*c) 442000 420000 22000 Total Cost accounted for 831500 764400 67100 ans 2 Cost per unit of finished goods is (84+11) 95.00 As this cost helps the management in knowing the product cost. It also tells which production cost is highest direct material, direct labor or overhead. When compare with previous cost it also tells that the cost per unit has increased or not.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.