Question

Problem 16-3A Thakin industries Inc, manufactures dorm furniture in separate processes. In each process, materials are entered at the beginning, and conversion costs are incurred uniformly. Production and cost data for the first processin products in two different manufacturing plants are as follows. Cutting Department g two T12-Tabes CIO-Chairs Production Date -July Work in process units, July 1 Units started into production Work in process units, July 31 Work in process percent complete 17,600 22,000 3,300 Cost Date-July Work in process, aly 1 Materials Labor Overhead 418,000 257,840 114,400 316,800 121,000 115,280 $790.240 For each plant compute the physical units of production T12 Tables CIO Chairs Units to be accounted for For each plant compute equivalent units of production for materials and for conversion costs Materials Conversion costs T12 Tables C10 Chairs p. 5.25.) For each plant determine the unit costs of production (Hound unit costs to 2 decimal places, Materials Conversion Costs Total Costs Una co2 Tables Unit CO -CID Car

Answer 1

1. Computation of Physical units of production:-
UNITS
	T12 Tables	C10 Chairs
Units to be accounted for:
Work in process, July 1	0	0
Started into production	22000	17600
Units to be accounted for:	22000	17600
2. Computation of the equivalent units of production for Materials and conversion costs:-
UNITS		T12 Tables -Equivalent Units
	Physical Units	% complete	Materials	% complete	Conversion Costs
Units accounted for:
Transferred out (22000-3300)	18700	100%	18700	100%	18700
Work in process, July 31 (60% complete)	3300	100%	3300	60%	1980
Equivalent Units of Production	22000		22000		20680
UNITS		C10 Chairs -Equivalent Units
	Physical Units	% complete	Materials	% complete	Conversion Costs
Units accounted for:
Transferred out (17600-550)	17050	100%	17050	100%	17050
Work in process, July 31 (80% complete)	550	100%	550	80%	440
Equivalent Units of Production	17600		17600		17490
3. Computation of the unit costs of production for Materials and conversion costs:-
COSTS	T12 Tabes - Costs
	Materials	Conversion	Total
Unit Costs
Cost of beginning Work in process	$                     -	$                      -	$                        -
Total Costs added during July	$          418,000	$           372,240	$             790,240
Total Cost to be accounted for	$          418,000	$           372,240	$             790,240
	÷	÷
Equivalent units	22000	20680
Cost per equivalent unit	$19.00	$18.00	$37.00
Conversion Costs added during July = 257840+114400= $372240

COSTS C10 Chairs - Costs Conversion Materials Total Unit Costs Cost of beginning Work in process Total Costs added during July Total Cost to be accounted for $ $ $ - Ś 316,800 $ 316,800 $ - $ 236,280 $ 236,280 $ 553,080 553,080 Equivalent units Cost per equivalent unit 17600 $18.00 17490 $13.51 $31.51 Conversion Costs added during July = 121000+115280= $236280 4. Determination of the total cost of ending work in process inventory and the total cost of units transferred out Equivalent | Cost per T12 Tables Total units equivalent unit 18700 $37.00 $691,900 Cost of units units transferred out Cost of Ending Work in proces inventory Materials Conversion Costs Total costs accounted for 3300 1980 $19.00 $18.00 $62,700 $35,640 $98,340 $790,240 C10 Chairs Equivalent units Cost per equivalent unit Total 17050 $31.51 $537,236 Cost of units units transferred out Cost of Ending Work in proces inventory Materials Conversion Costs Total costs accounted for 550 440 $18.00 $13.51 $9,900 $5,944 $15,844 $553,080 5. Production Cost Report for Plant 2 for July, 2017 (i) Calculate equivalent units for materials and conversion costs. THAKIN INDUSTRIES INC. Cutting Department- Plant 1 Production Cost Report For the Month Ended July 31, 2017 UNITS Physical Units Units to be accounted for: Work in process, July 1 0 Started into production 22000 Total units 22000 Units accounted for: Transferred out 18700 Work in process, July 31 (60% complete) 3300 Total units to be assigned costs 22000 Equivalent Units Conversion Materials Costs 18700 3300 22000 1 8700 1980 20680 1(b)(ii). costs per equivalent unit. COSTS Costs Direct Materials Conversion Total Unit Costs Total Costs $ 418,000 $ 372.240 $ 790,240 22000 $19.00 20680 $18.00 $37.00 Equivalent units Cost per equivalent unit Costs to be accounted for Work in process, July 1 Started into production Total costs | $ $ $ 0 790,240 790,240 Cost Reconciliation Schedule Equivalent units Cost per equivalent unit Total 18700 $37.00 $691,900 Cost accounted for: Transferred out Work in process, July 31 (60% complete) Materials Conversion Costs Total costs 33001 19801 $19.00 $18.00 $62,700 $35,640 $98,340 $790,240 $790.34

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