Question

Part IV. Problem - Total - 30 points. Otylia Manufacturing Company assembles its product in several departments. It has two departments that process all units. During February, the beginning work in process in the cutting department was half completed as to conversion, and complete as to direct materials. The beginning inventory included $12,000 for materials and $3,000 for conversion costs. Ending work-in-process inventory in the cutting department was 40% complete. Direct materials are added at the beginning of the process. Beginning work in process in the finishing department was 75% complete as to conversion. Beginning inventories included 516,000 for transferred-in costs and $20,000 for conversion costs. Ending inventory was 25% complete. Additional information about the two departments follows: Finishing 20.000 50.000 Beginning work-in-process units Units started this period Units transferred this period Ending work-in-process units - Material costs added Direct manufacturing labor Other conversion costs Cutting 20.000 40,000 50,000 10,000 $51,000 $18,700 $26,900 20,000 $28,000 S40,000 $24,000 Required: Prepare a production cost worksheet using weighted average for the cutting department.

Answer 1

	Physcial units	Materials	Conversion
Work in Process Beginning	20000
Started during the period	40000
To account for	60000
Units transferred to next department	50000	50000	50000
Ending Work in Process :	10000	10000	4000
Accounted for	60000	60000	54000
	Total	Materials	Conversion
Cost of Beginning Work in Process	$        15,000	$        12,000	$          3,000
Cost added during the period	$        96,600	$        51,000	$        45,600
Total Cost	$     1,11,600	$        63,000	$        48,600
Equivalent units of Production		60000	54000
Cost per equivalent unit	$             1.95	$             1.05	$            0.90
	Materials	Conversion	Total
Ending work in Process Inventory
Equivalent units of Production	10000	4000
Cost per equivalent unit	$             1.05	$             0.90
Cost of Ending work in Process Inventory	$        10,500	$           3,600	$        14,100
Units Completed and transferred out
Units transferred to next department	50000	50000
Cost per equivalent unit	$             1.05	$             0.90
Cost of units transferred out	$        52,500	$        45,000	$        97,500
Reconciliation
Costs to be accounted for :
Cost of beginning work in process inventory	$        15,000
Costs added to the production during the year	$        96,600
Total Costs to be accounted for	$     1,11,600
Cost of Ending work in Process Inventory	$        14,100
Cost of units transferred out	$        97,500
Total Costs accounted for	$     1,11,600