Homework SourseIn August 45000 units were started into production and 5000
In August, 45,000 units were started into production and 5,000 of these were still being worked on at the end of August. This ending inventory had 70% of the materials and 20% of the conversion costs already added as of August 31.
The Accounting Department tells you that August costs are $65,250 for materials and $82,000 for conversion costs.
Prepare the production cost report for August:
In September, 70,000 units were started into production and 10,000 were still being worked on at the end of the month. This ending inventory had 40% of the materials and 10% of the conversion costs already added as of September 30.
the September costs are $84,450 for Materials and $113,500 for labor and overhead combined.
Prepare the production cost report for September.
Solution
this answer was calculated on equivalent weighted avg. method.
Please note all values are in %.
In case of any clarification required please comment.
| Calcualtion of valuation of WIP Ending at the end of august | ||||
| % Complete | ||||
| Particulars | Physical Units | Material | conversion | |
| WIP, Begnning | 0 | 0 | 0 | |
| started into production | 45000 | |||
| Completed and transferred out | 40000 | |||
| WIP, Ending | 5000 | 70 | 20 | |
| Particulars | Material | conversion | ||
| Cost added during the month | 65250 | 82000 | ||
| Total cost incurred till date | 65250 | 82000 | ||
| Particulars | Physical Units | Material | conversion | |
| Units completed and transferred out | 40000 | 40000 | 40000 | |
| WIP Ending (Physical units * respective department completion%) | 5000 | 3500 | 1000 | |
| Total Equivalent units | 45000 | 43500 | 41000 | |
| Calcualtion of Equivalent units cost for Direct material and conversion costs | ||||
| Particulars | Material | conversion | ||
| Total cost incurred in the month of august | 65250 | 82000 | ||
| Total equivalent units | 43500 | 41000 | ||
| Equivalent Cost per unit (A)/(B) | 1.5 | 2 | ||
| Calculation of equivalent cost per unit and assign cost to the units completed and units in Ending WIP | ||||
| Particulars | Material | conversion | ||
| Units completed and transferred out | 40000 | 40000 | ||
| Cost assign to completed and trasnferred out units (1.5*40000),(2*40000) | 60000 | 80000 | ||
| WIP Ending equivalent units | 3500 | 1000 | ||
| Cost assign to WIP Ending equivalent unit | 5250 | 2000 |
