Problem 4 Textbook Reference P34Prepare a production cost re

Problem 4 (Textbook Reference: P3-4)-Prepare a production cost report A bottling company bottles soft drinks department for June: using a process cost system. Following are cost and production data for the mixing Units Materials Costs Conversion Costs Inventory, June 1 Placed in Production in June Inventory, June 30 56,000 $ 133,000 S 29,960 S 63,000 11,620 $ 16,240 41,720 The June 30 inventory was 100% complete as to materials and 30% complete as to conversion. Required: Prepare a production cost report for the month ended June 30, using the average cost method. A production report template has been provided on the next page**

Solution

Production Report (Weighted average method) Unit Information Particulars Units Units in beginning work in progress            56,000 Units started into production          133,000 Units accounted for          189,000 Equivalent Units Units Material Conversion cost Units in Ending work in progress            63,000                  63,000                      18,900 Units completed and transferred out          126,000               126,000                   126,000 Units accounted for          189,000               189,000                   144,900 Cost Information Total Material Conversion cost Cost to account for Cost in beginning wip inventory $        27,860 $             11,620 $                 16,240 Cost incurred during the period $        71,680 $             29,960 $                 41,720 Total cost to account for (a) $        99,540 $             41,580 $                 57,960 Divided by Equivalent Units (b)               189,000                   144,900 Cost per Equivalent Units c = a/b $                  0.22 $                      0.40 Cost to account for Cost completed and transferred out $             27,720 $                 50,400 (126000*$0.22) (126000*$0.4) Costs remaining in ending work in process inventory $             13,860 $                    7,560 (63000*$0.22) (18900000*$0.4) Total costs accounted for $             41,580 $                 57,960