Question

Cheery Chews makes all-natural dog bones in a two-stage process - Formulary and Production. In the formulary stage, the many different natural ingredients are combined and processed to create the different textures and flavors of the dog bones. In, the production stage, the ingredients combined in the formulary stage are shaped into various shapes, additional flavor coatings are added, and the bones are baked and packaged. During May, the following information for the Formulary Department was recorded: Units Costs Materials Conversion Work in Progress Beg. Inventory, May 1 Added to production Ending inventory, May 1 15,000 250,000 5,000 $2,110 $34,990 $2,625 $52,395 All materials are added at the beginning of the process. Ending inventory was 100% complete as to materials and 40% complete as to conversion. Required: What is the total cost to be accounted for? Compute the equivalent units. Determine the cost per equivalent unit. Determine the total cost of the units transferred to the Production Department. Determine the total cost of the units still in process in the Formulary Department at the end of May. Reconcile costs to be accounted for (#1) to costs accounted for.

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.

Answer 3 2 Part 1) Cost to be accounted for 4. Particular 5 Cost In Beginning Inventory 6 Cost Incurred during the month 7 Total cost to be accounted for Amount 4735 87385 92120 22 Part 2) Equivalent units of Material and Conversion Cost 24 Particulars Physical Units Material Conversion Cost 25 Units completed and transferred out (15000+250000-500 260000 260000 260000 (260000*100%) (260000*100%) 27 Units in ending work in process 5000 5000 2000 (2020*100%) (2020*40%) 29 Equivalent units 265000 265000 262000 30 Part 3) Statement for calculation of unit cost Material Conversion Cost Unit Cost mm 34 Cost in beginning work in process 35 Cost incurred during the period 36 Total cost to be accounted for 37 Equivalent units 38 Equivalent cost per unit 2110 34990 37100 265000 0.14 2625 52395 55020 262000 0.21 0.35

Part 4) Total cost of units transferred to the production department (-35+265000) 91000 Part 5) Total cost of unit still in process in the ending inventory (5000*.14)+(2000*21)) 1120 Part 6) Total cost accounted for Particulars Cost of units transferred out Cost of units in ending inventory Total cost accounted for Amount 91000 1120 92120