Question

Austin Co. manufactures a product called Aster in a three-process series. All materials are introduced at the beginning of the first process. Austin uses the first-in, first-out method of inventory costing. Unit and cost data for the first process (Department A) for the month of December follow:

	Units	Completion	Cost
Work in process inventory:
December 1	12,000	60%	$140,400
December 31	5,000	40%	?
Started in December:	14,000
Direct materials cost			106,400
Conversion cost			70,310
Completed in December	21,000		?

	Required:
	Prepare Austin's Department A cost of production report for December. Round cost per equivalent unit to two decimal places and the other answers to the nearest dollar. If an answer is zero, enter “0”.

Cost of Production Report For the Month Ended December 31 Equivalent Units UNITS Whole Units Direct Materials Conversion Units charged to production: Inventory in process, Dec. 1 Received from materials storeroom Total units accounted for by Dept. A Units to be assigned costs: Inventory in process, Dec. 1 (60% completed) Started and completed in December Transferred to Dept. B in December Inventory in process, Dec. 31 (40% complete) Total units to be assigned costs

Answer 1

Solution:

E 10 11 Austin Co. Cost of Production report For the Month Ended December 31 Month Endod December 31 UNITS Whole Units Equivalent Units Direct MateriaConversion 13 12000 14000 26000 14 Units charged to production: 15 Inventory in process, Dec1 16 Received from Materials storeroom 17 Total units accounted for by Department A 18 Units to be assigned costs: Inventory in process, Dec 1 (40% completed this period) 20 Started and completed in Dec (21000-12000) Transferred to Department B in Dec Inventory in process, Dec 31 (40% completed) Total units to be assigned costs 19 21 22 12000 9000 21000 5000 26000 9000 9000 5000 14000 4800 9000 13800 2000 15800 Costs COSTS Direct Materials Conversion Total 28 Cost per equivalent unit: Total costs for Decin Department A $106,400 $70,310 30 /Total equivalent units 14000 15800 31 Cost per equivalent unit $7.60 $4.45 $12.05 32 Costs assigned to production: 33 Inventory in process, Dec 1 $140,400 34 Costs incurred in Dec $176,710 35 Total costs accounted for by the Department A $317,110 36 Costs allocated to completed and partially completed units: Inventory in process, Dec 1-balance $140,400 38 To complete inventory in process, Dec 1 (Equi. Units* cost per Equi. Un $0 $21,360 $21,360 39 started and completed in Dec $68,400 $40,050 $108,450 Transferred to Finished goods in Dec $270,210 Inventory in process, Dec 31 $38,000 $8,900 $46,900 Total costs assigned by the Department A $317,110 37 40 41 52 53 et210 Sheet211 Sheet264 Sheet265 Sheet266