Question

P21-1A Zou Company manufactures bowling balls through two processes: Molding and Packaging. In the Molding Department, the urethane, rubber, plastics, and other materials are molded into bowling balls. In the Packaging Department, the balls are placed in cartons and sent to the finished goods warehouse. All materials are entered at the beginning of each process. Labor and manufacturing overhead are incurred uniformly throughout each process. Production and cost data for the Molding Department during June 2012 are presented below. Production Data June -0- Beginning work in process units Units started into production Ending work in process units Percent complete–ending inventory Cost Data Materials 20,000 2,000 60% Labor $198.000 50,400 112.800 Overhead Total $361,200 Instructions (a) Prepare a schedule showing physical units of production, (b) Determine the equivalent units of production for materials and conversion costs. (c) Compute the unit costs of production. (d) Determine the costs to be assigned to the units transferred and in process for June. (e) Prepare a production cost report for the Molding Department for the month of June. P21.3A

Answer 1

a & b)

		Equivalent Units
	Physical				Conversion
Quantities	Units	% Material	Materials	% Conv	Costs
Units to be
accounted for
Beginning WIP	0
Started into	20000
production
Total Units	20000
Units accounted
for
Transferred Out	18000	100%	18000	100%	18000
Ending WIP	2000	100%	2000	60%	1200
Total Units	20000		20000		19200

c)

		Conversion
Costs	Materials	Costs	Total
Unit Costs
Total Costs	$ 198,000.00	$ 163,200.00
Equivalent Units	20000	19200
Unit Costs	$             9.90	$             8.50	$           18.40

d)

Cost of units transferred out
	Units	Cost/unit	Costs
Materials	18000	$      9.90	$ 178,200.00
Conversion	18000	$      8.50	$ 153,000.00
			$ 331,200.00

Cost of Ending WIP
	Units	Cost/unit	Costs
Materials	2000	$      9.90	$    19,800.00
Conversion	1200	$      8.50	$    10,200.00
			$    30,000.00

e)

Costs to be
accounted for
Beginning WIP			$                  -
Started into	$ 198,000.00	$ 163,200.00	$ 361,200.00
production
Total			$ 361,200.00
Costs accounted
for
Transferred Out			$ 331,200.00
Ending WIP			$    30,000.00
Total			$ 361,200.00