Question

local thrift shops. In its Department R, Recyclers, Inc., processes donated scrap cloth into towels for sale 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, 350 towels were in process and were 60 percent complete. The costs incurred were $779. During the month, costs of $27,600 were incurred, 4,600 towels were started, and 175 towels were still in process at the end of the month. At the end of the month, the towels were 20 percent complete. sells the products at cost. The direct materials costs are zero, but Required: Prepare a production cost report; the company uses weighted-average process costing. (Round "Conversion costs" to 2 decimal places.) RECYCLERS, INC. Production Cost Report-Weighted Average Compute Equivale nt Units Flow of Production Units Conversion Physical Units Costs 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 0 Conversion Costs Total Costs Costs Costs to be accounted for Costs in beginning WIP inventory Current period costs Total costs to be accounted for 0 S 0 Cost per equivalent unit: Conversion costs Costs accounted for Costs assigned to units transferred out Conversion costs Costs assigned to ending WIP inventory: Conversion costs Total costs accounted for S 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.) Work in Process Various Payables Beginning inventory Beg.bal This period's costs: End.bal. Ending inventory Finished Goods Inventory Beg.bal. End.bal.

Answer 1

a.

RECYCLERS, INC.
Production Cost Report-Weighted Average
Flow of Production Units	Compute Equivalent Units
	Physical Units	Conversion Costs
Units to be accounted for:
Beginning WIP inventory	350
Units started this period	4600
Total units to be accounted for	4950
Units accounted for:
Units completed and transferred out	4775	4775
Units in ending WIP inventory	175	35
Total units accounted for	4950	4810
Costs	Total Costs	Conversion Costs
Costs to be accounted for:
Costs in beginning WIP inventory	779	779
Current period costs	27600	27600
Total costs to be accounted for	28379	28379
Cost per equivalent unit:
Conversion costs ($28379/4810)		5.90
Costs accounted for:
Costs assigned to units transferred out:
Conversion costs (4775 x $5.90)		28172.50
Costs assigned to ending WIP inventory:
Conversion costs (35 x $5.90)		206.50
Total costs accounted for		28379

b.

Work in Process					Various Payables
Beginning inventory	779				Beg. Bal.		0
							27600	Conversion costs
This period's costs:					End. Bal.		27600
Direct materials	0	28172.50	Completed goods
Conversion costs	27600
Ending inventory	206.50
Finished Goods Inventory
Beg. Bal.	0
Completed goods	28172.50
End. Bal.	28172.50