Question

Matoyo Ltd manufactures large metal waste containers. These containers are produced in two processing departments, Fabricating and Painting. In both departments, all the direct materials are added at the beginning of the process, labour and overhead costs are applied evenly throughout the entire process.

 

Matoyo uses process costing and had the following production and cost information for the Fabricating Department for the month of April.

 

Units in work in process at 1 April, 60% complete		10,000
Units started during April		65,000
Units completed and transferred out in April		60,000
	Beginning	Incurred
	Work in Process ($)	in April ($)
Direct materials	9,090	27,000
Direct labour	2,490	7,740
Manufacturing overhead costs applied	5,730	18,060

 

 

 

At the end of April, units remaining in work in process in the Fabricating Department were 20% complete.

 

Required:

 

a)        Prepare a cost of production report for the Fabricating Department for the month of April.

 

b)        Based on the production report prepared for Fabricating Department, determine the following:

i)          number of equivalent units of direct materials and conversion cost;

ii)         cost per equivalent unit for direct materials, conversion and the department’s production;

iii)        value of ending work in process