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3 years ago

Cost of Production Report

Business

1 answer:

Maurinko [17]3 years ago

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Answer:

A) Summary of physical units and equivalent units

Units to be accounted for Physical units

Beginning WIP 7,000

Units started 108,000

Total units to be accounted for 115,000

Units accounted for Phys. units Materials Conversion

Beginning WIP 7,000 $56,000 $25,970

Units started 108,000 $869,400 $551,408

Subtotal 115,000 $925,400 $577,378

Units transferred out 109,200 $878,710 $567,691

Ending WIP 5,800 $46,690 $9,687

Summary of costs to be accounted for

Costs to be accounted for: Materials Conversion Total

Beginning WIP $56,000 $25,970 $81,970

Costs incurred in the period $869,400 $551,408 $1,420,808

Total costs to be accounted for $925,400 $577,378 $1,502,778

Calculation of cost per equivalent unit

Materials Conversion Total

Costs incurred in the period $869,400 $551,408 $1,420,808

Total equivalent units 108,000 99,040

Cost per equivalent unit $8.05 $5.567528 $13.617528

Cost allocation

Materials Conversion Total

Units finished and transferred $878,710 $567,691 $1,446,401

Ending WIP $46,690 $9,687 $56,377

Total costs to be accounted for $925,400 $577,378 $1,502,778

B) Materials cost per equivalent unit increased slightly during the period from $8 per EU to $8.05 per EU (0.6% increase). Conversion costs also increased during the period from $5.30 per EU to $5.567528 per EU (5% increase).

Explanation:

beginning WIP 7,000 units

100% completed for materials

70% completed for conversion costs (30% added in this period = 2,100 EU)

beginning WIP costs

materials $81,970

conversion $56,000

units started 108,000

materials added during the period $869,400

conversion costs $551,408

units finished 109,200

units started and finished = 108,000 - 7,000 - 5,800 = 95,200

ending WIP 5,800

100% complete for materials

30% complete for conversion costs (1,740 EU)

total EU:

materials 108,000

conversion 2,100 + 95,200 + 1,740 = 99,040

cost per EU:

materials $869,400 / 108,000 = $8.05

conversion $551,408 / 99,040 = $5.567528

total = $13.617528

ending WIP costs:

5,800 x $8.05 = $46,690

1,740 x $5.567528 = $9,687

total = $56,377

costs of finished units:

(102,200 x $8.05) + $56,000 = $878,710

(95,200 x $5.567528) + (2,100 x $5.567528) + $25,970 = $567,691

total = $1,446,401

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