Question

5. Costing of Units Transferred Out; Abnormal Loss During February, the Assembly department received 60,000 units from Cutting department at a unit cost of $3.54. Costs added in the Assembly department were: materials, $41,650; labor, $101,700; and factory overhead. $56,500. There was no beginning inventory. Of the 60,000 units received, 50,000 were transferred out; 9,000 units were in process at the end of the month (all materials, 2/3 converted); 1,000 lost units were 1/2 complete as to materials and conversion costs. The entire loss is considered abnormal and is to be charged to factory overhead. Required: Cost of production report,

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Answer 1

Assembly Department Cost of Production Report

Quantity Schedule

Unit Received from Preceding Department		$60,000
Unit Transferred to next department	$50,000
units still in process (All material 2/3 Labor & Overhead)	$9,000
Unit Lost in Process (Abnormal loss 1/2 Materials Labor Overhead	$1000	$60,000

Cost charged to the Department	Total Cost	Unit Cost
Cost from Preceding Department ;
Transferred in during the month (60,000)	$212,400	$3.54
Cost added by the Department
Material	$41,650	.70
Labor	$101,700	1.80
Factory Overheads	$56,500	1.00
Total Cost Added	$199,850	3.50
Total Cost to be accounted for	$412,250	7.04

Cost Accounted for as follows;

Transferred to Next Department (50000×7.04)		$352,000
Transferred to Factory Overheads;
From Precession department (1000×35.4)	$3,540
Materials (1000×1/2×.70)	$350
Labor (1000×1/2× $1.80)	$900
Factory Overheads (1000×1/2×$1)	$500	$5,290
Work in process ending inventory;
Cost from Preceding Department (9000×3.54)	$31,860
Materials (9000×.70)	$6,300
Labor (9,000×2/3×$1.80)	$10,800
Factory Overheads (9,000×2/3×1)	$6,000	$54,960
Total Cost Accounted		$412,250

Calculations;

Materials = 50,000+ $9,000+1000/2 lost unit = 59,500 Units

Labor and Factory Overheads =$50,000+(9000×2/3)+1000/2 lost unit = $56,500

Materials = .70 Per Unit ($41,650 /$59,500)

Factory Overheads = 1 Per Unit ($56,500/$56,500)

Labor =$ 1.80 Per Unit ($101,700/$56,500)