Question

The sanding department of Hanninen Furniture Company has the following production and manufacturing cost data for March 2020, the first month of operation. Production: 11,700 units finished and transferred out; 4,160 units started that are 100% complete in terms of materials and 25% complete in terms of conversion costs. Manufacturing costs: materials $53,924; labour $41,700; overhead $37,288. Prepare a production cost report. (Round unit costs to 2 decimal places, e.g. 15.25.) HANNINEN FURNITURE COMPANY Sanding Department Production Cost Report For the Month Ended March 31, 2020 Equivalent Units Physical Conversion Units Materials Costs Total Quantities Units to be accounted for Work in process, March 1 4160 Started into production 11700 Total units 15860 Units accounted for Transferred out 11700 11700 11700 Work in process, March 31 4160 4160 1040 Total units 15860 15860 12740

Answer 1

Solution:

Hannien Furniture company Sanding Department Production Cost report For the month ended march 31, 2020
Particulars	Physical Units	Equivalent units
		Material	Conversion
Work in Process, beginning	0
Started during the current period	15860
Total units to account for	15860
Units accounted for:
Unit completed & Transferred out	11700	11700	11700
Closing WIP:	4160
Material (100%)		4160
Conversion (25%)			1040
Equivalent units of production	15860	15860	12740

Hannien Furniture company Sanding Department Computation of Cost per equivalent unit of Production
Particulars	Material	Conversion
Opening WIP	$0.00	$0.00
Cost Added during Period	$53,924.00	$78,988.00
Total cost to be accounted for	$53,924.00	$78,988.00
Equivalent units of production	15860	12740
Cost per Equivalent unit	$3.40	$6.20

Hannien Furniture company Sanding Department Computation of Cost of ending WIP and units completed & transferred out
Particulars	Material	Conversion	Total
Equivalent unit of Ending WIP	4160	1040
Cost per equivalent unit	$3.40	$6.20
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit)	$14,144	$6,448	$20,592
Units completed and transferred	11700	11700
Cost of units completed & Transferred (Unit completed * cost per equivalent unit)	$39,780	$72,540	$112,320

Hannien Furniture company Sanding Department Cost reconcilaition
Particulars	Amount
Costs to be accounted for:
Cost of beginning WIP inventory	$0.00
Cost added to production	$132,912.00
Total Cost to be accounted for	$132,912.00
Costs accounted for as follows:
Cost of unit transferred out	$112,320
Ending WIP	$20,592
Total cost accounted for	$132,912.00