MVP Company has two departments Its first department the Mel

MVP Company has two departments. Its first department (the Melting Department) shows the following data for the month of August: Work in process, beginning: Units in process               400 Stage of completion with respect to materials 60%Stage of completion with respect to conversion 85% Costs in the beginning inventory:    Materials cost $170   Labour cost $160   Overhead cost $300 Units started into production during the month 1,100Units completed and transferred out 1,400Costs added to production during the month:     Materials cost $1,300   Labour cost $800   Overhead cost $1,700Work in process, ending:     Units in process ???    Stage of completion with respect to materials 70%    Stage of completion with respect to conversion 80%
Required: Using the weighted average method and FIFO method, prepare a production cost report for the company.

Solution

WEIGHTED AVERAGE COST UNITS TO ACCOUNT FOR: Beginning Work in Process units 400 Add: Units Started in Process 1,100 Total Units to account for: 1,500 UNITS TO BE ACCOUNTED FOR: Units started and completed 1,400 Ending Work in Process 100 Total Units to be accounted for: 1,500 Equivalent Units: Material Cost Conversion % Completion Units % Completion Units Units started and completed 100% 1,400 100% 1,400 Ending Work in Process 70% 70 80% 80 Total Equivalent units 1,470 1,480 TOTAL COST TO ACCOUNT FOR: Material Conversion Beginning work in Process 170 2,160 Cost Added during May 1,300 800 Total Cost to account for: 1,470 2,960 Total Cost to account for: 4,430 COST PER EQUIVALENT UNIT: Material Conversion Total cost added during the year 1,470 2,960 Equivalent Units 1,470 1,480 Cost per Equivalent unit 1 2 TOTAL COST ACCOUNTED FOR: Units started and Transferred out (1400 units) Equivalent unit Cost per EU Total Cost Material 1,400 1 1400 Conversion Cost 1,400 2 2800 Total Cost of Units completed and transferred out: 4200 Ending Work in process (100 units) Equivalent unit Cost per EU Total Cost Material 70 1 70 Conversison Cost 80 2 160 Total cost of Ending Work in process: 230 FIFO UNITS TO ACCOUNT FOR: Beginning Work in Process units 400 Add: Units Started in Process 1,100 Total Units to account for: 1,500 UNITS TO BE ACCOUNTED FOR: Units completed from Beginning WIP 400 Units started and completed 1,000 Ending Work in Process 100 Total Units to be accounted for: 1,500 Equivalent Units: Material Cost Conversion % Completion Units % Completion Units Units completed from Beg. WIP 40% 160 15% 60 Units started and completed 100% 1,000 100% 1,000 Ending Work in Process 70% 70 80% 80 Total Equivalent units 1,230 1,140 COST PER EQUIVALENT UNIT: Material Conversion Total cost added during the year 1,300 2,500 Equivalent Units 1,230 1,140 Cost per Equivalent unit 1.06 2.19 TOTAL COST ACCOUNTED FOR: Units Completed from Beginning WIP (400 units) Equivalent unit Cost per EU Total Cost Beginning Cost 630 Material 160 1.06 169.6 Conversion Cost 60 2.19 131.4 Cost of units completed from Beg WIP 931 Units started and Transferred out (1000 units) Equivalent unit Cost per EU Total Cost Material 1,000 1.06 1060 Conversion Cost 1,000 2.19 2190 Total Cost of Units completed and transferred out: 3250 Ending Work in process (100 units) Equivalent unit Cost per EU Total Cost Material 70 1.06 74.2 Conversison Cost 80 2.19 175.2 Total cost of Ending Work in process: 249