Question

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. Work in process, January 1, 8,000 units, 65% completed $96,640* *Direct materials (8,000 x $10.00) $80,000 Conversion (8,000 x 65% x $3.20) 16,640 $96,640 Materials added during January from Weaving Department, 123,200 units $1,244,320 Direct labor for January 169,325 Factory overhead for January 206,953 Goods finished during January (includes goods in process, January 1), 124,600 units Work in process, January 31, 6,600 units, 30% completed a. Prepare a cost of production report for the Cutting Department. If an amount is zero or a blank, enter in "O". For the cost per equivalent unit computations, round your answers to two decimal places. Karachi Carpet Company Cost of Production Report-Cutting Department For the Month Ended January 31 Unit Information Units charged to production: Inventory in process, January 1 Received from Weaving Department Total units accounted for by the Cutting Department Units to be assigned costs: Whole Units Equivalent Units Direct Materials Conversion

Answer 1

summary of the information provided in the question :

• Opening inventory	Unit	Completion	ti be completed in the period (100- completetion)	EU	rate	Amount OF opening
  A	B	C	D = (100% - C)	E	F	G= B * C * F
  Material	8,000	100%	0.00%	0	10	$        80,000
  Conversion	8,000	65%	35.00%	2,800	3.2	$        16,640
  						$        96,640
  Added during the period
  Material	123,200	1,244,320
  Labor		1,69,325
  FOH		206,953
  Good finished	124600
  WIP	Unit	Completion
  Jan-31	6,600	30%

Answer :

8000 UNIT charged to producrion Inventory in process january 1 Received from weaving department Total units accountaed for by the cutting department 123200 131200 units to be aasigned-costs: Whole unit Inventory in process January 1 (8000 * 0%; 8000 * 35%) Started and completed in january (116600 * 100%) Treansferred in january inventory in process January 31 (6600 * 100%; 6600 * 30 Total units to be assigned cost Equivalent unit Direct material Conversion 8000 0 2800 116600 116600 116600 124600 116600 119400 6600 6600 1980 131200 123200 121380

cost information Cost per Equivalent unit Direct material Conversion $ $ 1,244,320 $ 376,278 Total cost for january in cutting deparment (material cost 1244320; labor and FOH = 169325 + 206953 = 376278) Total equivalent units Cost per equivalent unit (1244320/ 123200; 376278/ 121380) 123200 121380 3.10 $ 10.10 $ cost assigned to production Direct material Conversion Total Inventory in process January 1 (8000 * 0%; 8000 * 35%) $ 96,640 cost incurred in january (1244320 + 169325 +206953) 1620598 total cost accounted for by the cutting department (96640 + 1620598) $ 1,717,238 cost allocated to completed and partially completed unit: Inventory in process January 1 balance $ 96,640 to complete inventory in process; january 1 (8000*0%* 10.10; 8000*35%*3.1) $ $ 8,680 $ 8,680 cost of completed january 1 WIP (96640 + 8680) 105,320 Started and completed in january (116600 * 10.10; 116600 * 3.10) $ 1,177,660.00 $ 361,460.00 $1,539,120.00 transferred to finished good in january ( 105320+ 1539120) $ 1,644,440