Question

UUS. uns in ending Work in Process. valent $3.60 Appendix EX 17-27 Cost of production report: average cost method The increases to Work in Process Roasting Department for Highlands Coffee Company for May as well as information concerning production are as follows: Work in process, May 1, 1,150 pounds, 40% completed $ 1,700 Coffee beans added during May, 10,900 pounds 28,600 Conversion costs during May 12,504 Work in process, May 31, 800 pounds, 80% completed Goods finished during May, 11,250 pounds Prepare a cost of production report for May, using the average cost method,

Answer 1

Statement of Equivalent Production( Average Cost Method)
Particulars		Units Produced	Total Units	Equivalent Units on which total cost incurred in Month
Opeining WIP(40%)	1150	Opening	1150	690	(60 percent completed this month)
		Current Introduce	10900	10900	(100 percent completed this month)
Started into Production	10900	Transferred Out(Given)	11250	11590
		Closing WIP(80%)	800	640	(80 percent completed this month)
		Equivalent Units Produced		12230
Statement of Cost/Unit
		Total Cost
Opening and Current Cost		42804
Units		12230
Cost/Unit		3.50
Cost of production Report
Total Cost Incurred for production = No. of units produced/transferred out * cost per unit
= 11250*3.5
=39375
Total Cost Incurred on closing stock/wip = No. of units under production * cost per unit
= 800*3.5
=2800