Question

1. Cost of Production Report: A company's Department 2 costs for June were: $16320 Cost from Department 1 Cost added in Department 2: Materials Labor Factory overhead (FOH) 43,415 56,100 58,575 The quantity schedule shows 12,000 units were received during the month from Department 1; 7,000 units were transferred to finished goods; and 5,000 units in process at the end of June were 50% complete as to materials cost and 25% complete as to conversion cost. Required: Prepare Cost of production report.

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Answer 1

Department 2
Cost of Production Report
For the Month of June,
Quantity Schedule:
Units received from department 1		12,000
Units transferred to finished goods	7,000
Units still in process (50% materials, 25% conversion)	5,000
Cost Charged to the Department:	Total cost	Unit cost
Cost from preceding department:
Transferred in during the month (12,000 units)	$16,320	$1.36
Cost added by department:
Materials	$43,415	$4.57
Labor	$56,100	$6.80
Factory overhead	$58,575	$7.10
Total cost added	$158,090	$18.47
Total cost to be accounted for	$174,410	$19.83
Cost Accounted for as Follows:
Transferred to finished goods (7,000 × $19.83)		$138,810
Work in process ending inventory:
Cost from preceding department	$6,800
Materials (5,000 × 50% × $4.57)	$11,425
Labor (5,000 × 25% × $6.80)	$8,500
Factory overhead (5,000 × 25% × $7.10)	$8,875
		$35,600
Total cost accounted for		$174,410
Additional computations:
Equivalent production:
Materials = 7,000 + (5,000 × 50%) = 9,500 units
Labor and factory overhead = 7,000 + (5,000 × 25%) = 8,250 units