Question

Lansing, Inc. provides the following information for one of its department's operations for June (no new material is added in Department T). WIP inventory-Department T Beginning inventory ((8,500 units, 30 % complete with respect to Department T costs) Transferred-in costs (from Department S) Department T conversion costs Current work (19,500 units started) Prior department costs 39,700 15,190 97,500 Department T costs 168,350 The ending inventory has 3,500 units, which are 60 percent complete with respect to Department T costs and 100 percent complete for prior department costs.

a. Complete the production cost report using the weighted-average method. (Round "Cost per equivalent unit" to 2 decimal places.)

Complete the production cost report using FIFO

Answer 1

a. Production Cost Report using Weighted Average Method

	Physical Units	Equivalent Units
		Prior Department	Department T
Flow of units
Units to be accounted for
Beginning WIP Inventory	8500
Units started this period	19500
Total units to account for	28000
Units accounted for
Completed and Transferred out	24500	24500	24500
Units in Ending Inventory	3500
Prior Department		3500
Department T			2100(Note 1)
Total units accounted for	28000	28000	26600
Flow of Costs
Costs to be accounted for
Costs in Beginning WIP inventory	$ 54890	$ 39700	$ 15190
Current Period Costs	$ 265850	$ 97500	$ 168350
Total Costs to be accounted for
Cost per Equivalent Unit
Prior Department		$ 4.90(Note 2)
Department T			$ 6.90(Note 2)
Costs Accounted for
Costs assigned to units transferred out	$ 289100	$ 120050(Note 3)	$ 169050(Note 3)
Costs of Ending WIP Inventory	$   31640	$   17150(Note 3)	$   14490(Note 3)
Total Costs Accounted for	$ 320740	$ 137200	$ 183540

               Note 1: Ending Equivalent Units

Given Ending Inventory is 60% complete as to current period.

Therefore Ending Equivalent Units=60%(3500 units)=2100 units

Note 2: Cost per Equivalent Unit

Cost per Equivalent Unit= Total Costs/Total Equivalent Units

Prior Department=$ 137200/28000 units=$ 4.90 per equivalent unit

Department T=$ 183540/26600 units=$ 6.90 per equivalent unit

Note 3: Costs assigned to units

Prior Department:

• Costs assigned to units transferred out=$ 4.9*24500 Units=$120050
• Costs of Ending WIP Inventory=$ 4.9* 3500 Units=$ 17150

Department T:

• Costs assigned to units transferred out=$ 6.90* 24500 units=$ 169050
• Costs of Ending WIP Inventory=$ 6.90 * 2100 units=$ 14490