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The Cutting Department of Sheridan Company has the following production and cost data for July.
Production Costs
1. Transferred out 13,700 units. Beginning work in process $0
2. Started 3,500 units that are 60% Materials 69,660
complete as to conversion Labor 18,480
costs and 100% complete as Manufacturing overhead 22,600
to materials at July 31.
Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process.
A) Determine the equivalent units of production for (1) materials and (2) conversion costs.
Materials Conversion Costs
Total equivalent units of production
B) Compute unit costs.
Materials $
Conversion costs $
Prepare a cost reconciliation schedule.
Cost Reconciliation
Costs accounted for
Transferred out $
Work in process, July 31
Material $
Conversion costs $

Respuesta :

akiran007

Answer:

1.                                                                   Materials       Conversion Costs

Total equivalent units of production        17,200                  15,800  

2. Cost per Equivalent Unit                    $ 4.05                           $ 2.6

Explanation:

Cutting Department

Weighted-Average Method

1. Equivalent Units

Particulars              Units       % of Completion       Equivalent Units

                                     Materials Conversion   Materials Conversion

Transferred Out    13,700     100         100             13,700      13,700

Ending Inventory     3500      100          60             3500        2100    

Total Equivalent Units                                             17,200      15,800  

The Ending Inventory  units are 3500 which are not yet complete.

                                                                   Materials       Conversion Costs

Total equivalent units of production        17,200                  15,800  

2. Cost Per Equivalent Units

                                                    Materials         Conversion

Cost Added                               69,660                18,480 + 22,600

                             

Total Costs                                69,660                  41,080

Equivalent Units                       17,200                    15,800

Cost per Equivalent Unit             69,660 / 17,200         41,080/ 15,800  

                                                    $ 4.05                           $ 2.6

Cost of Ending Work In Process  $ 19635

Materials = 3500 * $ 4.05= $ 14175

Conversion = 2100 * $ 2.6=  $ 5460

We multiply the equivalent number of units with the cost per unit to find the cost.

Cost Of Units Transferred Out = $ 91,105

Materials = 13,700 * $ 4.05= $ 55,485

Conversion = 13,700 * $ 2.6 =  $ 35620

B. A Cost Reconciliation Report

                                    Materials              Conversion

Ending WIP                     $ 14175                  $ 5460

Transferred Out             $ 55,485              $ 35620

Total                                 $ 69660                 41080  

These calculated costs reconcile with the costs given in the above data.

                                                  Materials              Conversion

Cost Added                               69,660                18,480 + 22,600

Total Costs                                69,660                  41,080

These costs reconcile with the given costs.

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