Question

eBook Calculator Cost of Production Report The Cutting Department of Karachi Carpet Company provides the following data for January. Assume that all materials are added at the beginning of the process. $108,650" Work in process, January 1, 8,200 units, 65% completed Direct materials (8,200 x $10.00) Conversion (8,200 x 65% x $5.00) $82,000 26,650 $108,650 Materials added during January from Weaving Department, 126,400 units Direct labor for January $1,276,640 276,794 338,303 Factory overhead for January Goods finished during January (includes goods in process, January 1), 127,800 units Work in process, January 31, 6,800 units, 45% completed

Answer 1

Karachi Carpet company Cost of Production Report- Cutting Department for the Month Ended Jan-31 Unit Information Units changed to Production: Inventory in Process, January 1 8,200.00 Received from Weaving Department 1,26,400.00 Total Units accounted for by the Cutting Department 1,34,600.00 Units to be assigned costs: Inventory in Process, January 1 (65% Completed) Started and completed in January Transferred to finished goods in January Inventory in Process, January 31 (45% Completed) Total units to be assigned cost Equivalent units Whole units Direct Materi: Conversion 8,200.00 2,870.00 1,19,600.00 1,19,600.00 1,19,600.00 1,27,800.00' 1,19,600.00 1,22,470.00 6,800.00 6,800.00 3,060.00 1,34,600.00 1,26,400.00 1,25,530.00

Working Notes 1. Conversion units - Jan 1 Opening Un-completed units (1-65%) Conversion units (8200 x 35%) 8,200.00 0.35 2,870.00 2. Completed units Received from Weaving Department Work in Process, January 31 Completed units 1,26,400.00 6,800.00 1,19,600.00 3. Conversion units- Jan 31 Inventory in Process, January 31 Completed % Assigned conversion cost (6800 x 45%) 6,800.00 0.45 3,060.00

Cost Information Cost per equivalent unit: Total cost for January in Cutting Department Total equivalent units Cost per equivalent unit: Cost assigned to Production Direct Material Conversion 12,76,640.00 6,15,097.00 (276694 +338303) 1,26,400.00 1,25,530.00 10.10 4.90 Total 1,08,650.00 18,91,737.00 (1276640+615097) 20,00,387.00 Direct Material Conversion Inventory in Process, January 1 Cost incurred in January Total cost accounted for by the cutting Department Costs allocated to completed and partially completed units: Inventory in Process, January 1 Cost of completed January 1 work in process 14,063.00 Started and completed in January |Transferred to finished goods in January 12,07,960.00 5,86,040.00 Inventory in Process, January 31 68,680.00 14,994.00 Total cost assigned by the cutting Department 1,08,650.00 14,063.00 1,22,713.00 17,94,000.00 83,674.00 20,00,387.00 Working Notes 4. Cost of completed January 1 work in process (2870 x 4 14,063.00 5. Finished goods Direct Materials (119600 x 10.1) Conversion cost (119600 x 4.9) 12,07,960.00 5,86,040.00 6. Inventory in process Direct Materials (6800 x 10.1) Conversion cost (3060 x 4.9) 68,680.00 14,994.00

B. Computation of change in the cost per equivalents unit Materials From Current Period From Beginning period Increase 10.10 10.00 0.10 Conversio From Current Period From Beginning period Decrease 4.90 5.00 -0.10 The cost per equivalent unit of materials increased by $0.10 per unit, and the cost per equivalent unit of conversion cost decreasd by $0.10 per unit. Management should look into the causes for these