Question

During​ June, 78,927 actual machine hours were logged during production.

Don't Cry Over Spilled Milk, Inc., a manufacturer of mops, uses the weighted average method in its processing costing system. Don't Cry uses a traditional costing system in the allocation of its manufacturing overhead (MOH) to production; MOH costs are allocated to production on the basis of machine hours logged during the period. Total estimated MOH for the period was $500,000 and total estimated machine hours were 100.000. The following data concern the operations of the company's first processing department, Assembly, for June 2018. Beginning Work in Process 800 mops, 60% complete with respect to direct materials, 10% complete with respect to conversion Costs in Beginning Work in Process $3,712 (of this amount, $1,296 is for direct materials) Units Started in June 16,000 mops Direct Product Costs Added During June |direct materials $47,076; direct labor $216,213 Ending Work in Process 300 mops, 60% completed with respect to direct materials, 70% complete with respect to conversion (round all calculation to 2 decimal places, all answers should include commas and 2 decimal places i.e. 1,000.00 not 1000.) The cost to assemble one mop in June was $ : The cost of goods completed and transferred out of the Assembly department during June equals $ . The conversion costs included in Work in Process-Assembly at the beginning of July would equal $ .

Answer 1

Solution:

No. of equivalent units Direct material Conversion Units Units 100% 16,500 100% 16,500 % Completed & transferred 16,500 60% 70% Ending WIP Total 300 16,800 180 16,680 210 16,710 Cost per Equivalent Cost Equivalent units unit Direct material ($1,296 + 47,076) $48,372 16,680 $2.90 Conversion cost ($2,416 + 216,213+394,635) $613,264 16,710 $36.70 The cost to assemble one mop in June $39.60 Statement of cost of units transferred out and conversion cost included in Ending WIP inventory Equivalent units Cost per Eq. unit Valued cost Units completed & transferred out of assembly dept. Material 16,500 $2.90 $47,850.00 Conversion 16,500 $36.70 $605,550.00 Total cost of goods completed & transferred out $653,400.00

Conversion cost included in WIP at the beg. of July = 210×$36.70 = $7,707

Workings :

Manufacturing OH included in conversion cost = Predetermined OH rate * Actual MH logged

= ($500,000/100,000)*78,927 = $394,635