Answer:
Atlanta Paper Company
Atlanta Paper Company
Cost of Production Report
For the Month Ending October 31, 2009
a. Summary of units in process (tons):
Beginning 0
Units started 80,000
In process 80,000
Completed (75,000)
Ending 5,000
b. Equivalent units in process: Materials Conversion Total
Units completed 75,000 75,000
Plus ending inventory 5,000 3,250
Equivalent units in process 80,000 78,250
c. Total cost to be accounted for and cost per equivalent unit in process:
Materials Conversion Total
Beginning work-in-process $0 $0 $0
Current costs $486,000 $358,800 $844,800
Total cost in process $486,000 $358,800 $844,800
Equivalent units in process 80,000 78,250
Cost per equivalent unit $6.075 $4.585
d. Cost accounted for:
Materials Conversion Total
Units completed $455,625 $343,875 $799,500
Ending work in process 30,375 14,901 45,276
Total costs accounted for $486,000 $358,776 $844,776
Explanation:
a) Data and Calculations:
Units of product started in process during October 80,000 tons
Units completed and transferred to finished goods 75,000 tons
Ending work in process inventory, October ending 5,000 tons (80,000 - 75,000)
Machine hours operated 7,000
Direct materials costs incurred $486,000
Direct labor costs incurred $190,800
Manufacturing overhead cost = $168,000 (7,000 * $24)
Total conversion costs = $358,800 ($190,800 + $168,000)
Ending work in process 65% converted.
