### Educational Resource: Production Cost Report Analysis #### Objective: Understand how to determine the cost per equivalent unit for direct materials and conversion costs, and the cost to be transferred to the next department in a manufacturing process. --- ### Section 16A: Cost Per Equivalent Unit **Instructions:** Determine the cost per equivalent unit for the current period for direct materials and conversion costs. Enter the cost per equivalent unit to the nearest cent. **Abbreviations Used:** - EUP = Equivalent Units of Production - WIP = Work in Process **Cost Categories:** - **Direct Materials** - **Conversion Costs** - **Total Costs** - **Cost per Unit** **Steps:** 1. Calculate total costs to account for (Direct Materials + Conversion Costs). 2. Determine the cost per equivalent unit for both direct materials and conversion costs. --- ### Data Table: - **Direct Materials:** - Beginning WIP: $840 - Added this month: $2,940 - Total: $3,780 - **Conversion Costs:** - Beginning WIP: $1,400 - Added this month: $3,972 - Total: $5,372 - **Overall Totals:** - Beginning WIP: $2,240 - Added this month: $6,912 - Total: $9,152 --- ### Section 17A: Transfer of Costs **Objective:** Determine the cost to be transferred to the next department. **Instructions:** Complete the partial production report through the calculation of "Transferred to finished goods." Complete all input fields. Enter "0" for any zero balances. **Abbreviations Used:** - WIP = Work in Process **Cost Categories:** - **Direct Materials** - **Conversion Costs** - **Total Costs** **Steps:** 1. Record costs for beginning WIP. 2. Compute total costs for direct materials and conversion. 3. Calculate the amount transferred to finished goods. --- This exercise provides practical knowledge on production cost accounting, focusing on tracking and managing costs throughout the manufacturing process. Understanding these concepts is crucial for accurate financial reporting and effective operational management. Pearce Company uses the FIFO method in its process costing system. The Mixing Department started the month with 400 units in process that were 10% complete, started production on 1,400 units, and transferred 1,500 units to the finished goods storage area. All materials are added at the beginning of the process and conversion costs occur evenly. The units in process at the end of the month are 65% complete with respect to conversion costs. The department incurred the following costs: 14A. How many units are still in process at the end of the month? Determine the formula, then enter the amounts to calculate units in process at the end of the month. [ ] + [ ] - [ ] = [ ] In process units 15A. Compute the equivalent units of production for the Mixing Department for the current month. **Pearce Company** **Production Cost Report - Mixing Department** | UNITS | Equivalent Units | |-------|------------------| | | Physical Units | Direct Materials | Conversion Costs | | Units to account for: | | | | Total units to account for | | | Units accounted for: | | | | Transferred to Finished Goods | | | | Total units accounted for | | **Data Table:** | | Beginning WIP | Added this month | Total | |----------------|---------------|-----------------|-------| | Direct Materials | $840 | $2,940 | $3,780 | | Conversion Costs | $1,400 | $3,972 | $5,372 | | Total | $2,240 | $6,912 | $9,152 | Options: - Print - Done