Question

Production costs chargeable to the Finishing Department in June in Hollins Company are materials $12,300, labor $39,676, overhead $19,300. Equivalent units of production are materials 20,500 and conversion costs 19,400. Production records indicate that 18,300 units were transferred out, and 2,200 units in ending work in process were 50% complete as to conversion costs and 100% complete as to materials. Prepare a cost reconciliation schedule. (Round unit costs to 2 decimal places, e.g. 2.25 and final answers to 0

Answer 1

Answer: $71,276

Explanation:

Cost reconciliation schedule is as follows:

$Materials=\frac{materials\ in\ june}{Equivalent\ units\ of\ production}$

$Materials=\frac{12,300}{20,500}$

                     = 0.6

$Conversion\ cost=\frac{Labor+overhead}{conversion\ cost}$

$Conversion\ cost=\frac{39,676+19,300}{19,400}$

                                  = $3.04

Total cost account for:

= Transferred out + total work in progress

= [(0.60 + 3.04) × 18,300] + [(2,200 × 0.6) + (2,200 × 3.04 × 0.50)]

= $66,612 + [$1,320 + $3,344]

= $71,276

Thus, the total cost accounted for is $71,276.