Question

The Sanding Department of Quik Furniture Company has the following production and manufacturing cost data for March 2017, the first month of operation.

Production: 7,000 units finished and transferred out; 3,000 units started that are 100% complete as to materials and 20% complete as to conversion costs. 

Manufacturing costs: Materials $33,000; labor $21,000; and overhead $36,000. 

Instructions 

Prepare a production cost report.

Answer 1

Cost report is given at the end

Reconciliation of Units
A	Opening WIP	-
B	Introduced	10,000
C=A+B	TOTAL	10,000
D	Transferred	7,000
E=C-D	Closing WIP	3,000

Statement of Equivalent Units
		Material		Conversion Cost
	Units	Complete %	Equivalent units	Complete %	Equivalent units
Transferred	7,000	100%	7,000	100%	7,000
Closing WIP	3,000	100%	3,000	20%	600
Total	10,000	Total	10,000	Total	7,600

Cost per Equivalent Units
COST	Material	Conversion Cost	TOTAL
Beginning WIP Inventory Cost			$                            -
Cost incurred during period	$             33,000	$               57,000	$                  90,000
Total Cost to be accounted for	$             33,000	$               57,000	$                  90,000
Total Equivalent Units	10,000	7,600
Cost per Equivalent Units	$   3.30	$ 7.50

Statement of cost
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$                   3.30	3,000	$           9,900.00	7,000	$          23,100.00
Conversion Cost	$                   7.50	600	$           4,500.00	7,000	$          52,500.00
TOTAL	$               90,000	TOTAL	$               14,400	TOTAL	$                75,600

Reconciliation and Cost report
Cost to be accounted for
Beginning Work In Progress:
Material	$                        -
Conversion Cost	$                        -	$                                                        -
Cost incurred during period:
Material	$         33,000.00
Conversion Cost	$         57,000.00	$ 90,000.00
Total Cost to be accounted for				$           90,000.00
Cost accounted for
Cost of Units transferred	Equivalent Units	Cost per Equivalent Units	Cost accounted for
Material	7,000	$                 3.30	$         23,100.00
Conversion Cost	7,000	$                 7.50	$         52,500.00
				$            75,600.00
Cost of ending WIP	Equivalent Units	Cost per Equivalent Units	Cost accounted for
Material	3,000	$                 3.30	$           9,900.00
Conversion Cost	600	$                 7.50	$           4,500.00
				$            14,400.00
Total Cost accounted for				$            90,000.00

Answer 2