Question

In its Department R, Recyclers, Inc., processes donated scrap cloth Into towels for sale in local thrift shops. It sells the products at cost. The direct materials costs are zero, but the operation requires the use of direct labor and overhead. The company uses a process costing system and tracks the processing volume and costs incurred in each period. At the start of the current period, 300 towels were in process and were 60 percent complete. The costs incurred were $576. During the month, costs of $10,800 were incurred, 2,700 towels were started, and 150 towels were still in process at the end of the month. At the end of the month, the towels were 20 percent complete. Required: a. Prepare a production cost report; the company uses weighted-average process costing. b. Show the flow of costs through T-accounts. Assume that current period conversion costs are credited to varlous payables. Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Show the flow of costs through T-accounts. Assume that current period conversion costs are credited to various payables. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Various Payables Beginning inventory Beg bal. Work in Process 11,258 X 576.00 11,257.50 10,800 x This period's costs End.bal Ending inventory 11,139.50 Finished Goods Inventory 1,257.50 Beg.bal. End.bal. 1,257.50 < Required A Required E

Answer 1

Conversion Costs Preparation of Pruction cost report Particulars Physical Units Units to be accounted for: Beginning WIP inventory Units started this period Total units to be accounted for Units accounted for: Units completed and transferred out Units in ending WIP inventory Total units accounted for 300 2700 3000 2850 150 3000 28501 30 2880 Costs Total Costs Conversion Costs Costs to be accounted for: Costs in beginning WIP inventory $ 576.00 $ 576.00 Current period costs $ 10,800.00 $ 10,800.00 Total costs to be accounted for $ 11,376.00 $ 11,376.00 Cost per equivalent unit: Conversion costs ($11376/2880) $ 3.95 Costs accounted for: Costs assigned to units transferred out: Conversion costs (2850 x $3.95) $ 11,257.50 Costs assigned to ending WIP inventory: Conversion costs (30 x $3.95) $ 118.50 Total costs accounted for $ 11,376.00 Preparation of T Accounts Work in Process $ 576.00 Beg. Bal. Various Payables $ $ 10,800.00 Conversion costs $ 10,800.00 End. Bal. Beginning inventory This period's costs: Direct materials Conversion costs Ending inventory $ 11,257.50 Completed goods $ $ $ 10,800.00 118.50 Beg. Bal. Completed goods Finished Goods Inventory $ $ 11,257.50 End. Bal. $ 11,257.50 * Kindly Comment down for any clarifications/ queries and please upvote.