Question

Urban Company manufactures a product through a continuous single-step process. All materials are added at the beginning of processing. Production and cost data for the company for February 2019 are as follows: Production data: In process, beginning of month (30% converted) 1,500 units Started during February 8,000 units Completed and transferred to finished goods 7,500 units In process, end of month (50% converted) 2,000 units Manufacturing costs: Work in process, beginning $15,600 Materials $48,000 Direct labor cost $32,000 Factory overhead cost $40,450

Required: Prepare a cost of production report for February 2019. Use FIFO process costing.

Answer 1

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A1.	Quantities			Equivalent Units
			Whole Units	Materials	Conversion Cost	Complete
	Units to be account for
	Work in Process, Beginning	100%,30%	1,500	-	1,050		100%	30%
	Units Started and Completed		8,000	8,000	8,000		100%	100%
	Work in Process, Ending		2,000	2,000	1,000		100%	50%
	Equivalent Units-Weighted Average		11,500	10,000	10,050
A2.	Cost
				Materials	Convsersion Cost	Total
	Cost added during Period			$            48,000	$                   72,450	$              120,450
	Total Cost to account for			$            48,000	$                   72,450	$              120,450
	Equivalent Units			10,000	10,050
	Unit Cost	Total Cost/Equivalent Units		$                 4.80	$                        7.21	$                  12.01
2.	Cost accounted for
	Work in Process, Ending		Material	Conversion	Total
	Equivalent Units		2,000	1,000
	Cost per Equivalent Unit		$              4.80	$                 7.21
	-Total Cost Accounted For		$            9,600	$              7,209	$                   16,809
	Cost of Units Transferred out:
	Cost in Beginning WIP	A			$                   15,600
	Cost of Complete Beginning WIP:
	Equivalent Units-Beginning		-	1,050
	Cost per Equivalent Unit		$              4.80	$                 7.21
	-Cost to Complete Beginning WIP	B	$                   -	$        7,569.40	$                      7,569
	Cost of Units Started and Completed:
	Units Started and Completed		8,000	8,000
	Cost per Equivalent Unit		$              4.80	$                 7.21
	-Cost of units started and Completed	C	$         38,400	$            57,672	$                   96,072
	Cost of Units Transferred out:	A+B+C			$                 119,241