Question

Downward Dog Yoga is a manufacturer of yoga apparel. it produces all of its products in one department. The information for the current month is as follow

Beginning work-in-processes 20,000 units

Units started 40,000 units

Units Completed 50,000 units

Ending work-in-process 8,000 units

Spoilage 2,000 units

Beginning work-in-process direct material $12,000

  Beginning work-in-process conversion $4,000

Direct materials added during month $60,000

  Direct manufacturing labour during month $20,000

Beginning work-in-process was half complete as to conversion. Direct materials are added at the beginning of the process. Factory overhead is applied at a rate equal to 50 percent of direct manufacturing labour. Ending work-in-process was 60 percent complete. All spoilage is normal and is detected at the end of the process.

Require

a) Prepare a production cost worksheet assuming that spoilage is recognized and the weighted- average method is used.

Answer 1

Downward Dog Yoga Production Worksheet Physical units Direct materials Conversion Flow of Production Work in process, beginning Started during period To account for 20000 40000 60000 Good units completed Normal spoilage Work in process, ending Accounted for 50000 2000 8000 50000 2000 8000 60000 50000 2000 4800 56800 60000 Costs Work in process, beginning Costs added during period Total costs to account for Divided by equivalent units Equivalent unit costs Totals 16000 90000 106000 Direct materials Conversion 12000 4000 60000 30000 72000 34000 60000 56800 1.2 0.6 1.8 90000 3600 Assignment of costs Costs transferred out (50,000 x $1.80) Normal spoilage (2,000 x $1.80) Work in process, ending Direct materials (8,000 x $1.20) Conversion (8,000 x $0.60 x 0.60) Costs accounted for 9600 2880 106080