Exercise 6-8 UNEVEN APPLICATION – MULTIPLE DEPTS Mahaba Manufacturing Co. operates three departments with the following processes: Cutting – This department adds 60% of the materials at the start of the process, 40% when the process is 4/5 completed, and applies labor and overhead uniformly to production. Grinding – This department adds all the materials at the end of processing, applying conversion costs evenly throughout the process. Mixing – This department adds 30% of the materials at the beginning of processing, 30% when processing is 1⁄2 completed, and 40% at the end of the process. It applies conversion costs evenly throughout the process. Production data for the month of March of the current year follows: Quantity data: Cutting Grinding Mixing WIP, beg 10,000 8,000 6,000 Stage of Completion 3/4 4/5 1/3 Transferred to next Dep’t. 42,000 44,000 46,000 WIP, end 8,000 6,000 4,000 Stage of Completion 2/5 2/3 3⁄4 Cost data: WIP, beg P116,100 P166,800 P223,800 Factory costs: Materials 244,800 132,000 419,400 Direct labor 226,200 249,600 282,000 FOH 113,100 124,800 141,000 Required: Prepare the cost of production report for each of the three departments.
Exercise 6-8 UNEVEN APPLICATION – MULTIPLE DEPTS
Mahaba Manufacturing Co. operates three departments with the following processes:
Cutting – This department adds 60% of the materials at the start of the process, 40% when the process
is 4/5 completed, and applies labor and
Grinding – This department adds all the materials at the end of processing, applying conversion costs
evenly throughout the process.
Mixing – This department adds 30% of the materials at the beginning of processing, 30% when
processing is 1⁄2 completed, and 40% at the end of the process. It applies conversion costs evenly
throughout the process.
Production data for the month of March of the current year follows:
Quantity data: Cutting Grinding Mixing
WIP, beg 10,000 8,000 6,000
Stage of Completion 3/4 4/5 1/3
Transferred to next Dep’t. 42,000 44,000 46,000
WIP, end 8,000 6,000 4,000
Stage of Completion 2/5 2/3 3⁄4
Cost data:
WIP, beg P116,100 P166,800 P223,800
Materials 244,800 132,000 419,400
Direct labor 226,200 249,600 282,000
FOH 113,100 124,800 141,000
Required: Prepare the cost of production report for each of the three departments.
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