Answered: repare the August cost of production…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Carmal Corporation uses the average process costing method. All spoilage that occurred in Department 2 during August was normal and applicable to all production. August cost data for Department 2 were as follows:

Beginning Inventory
August cost incurred

Cost transferred from Department 1
12,000
89,200

Conversion cost
6,000
60,400

The Department 2 beginning inventory (2/3 converted) was 1,200 units and 8,000 units were transferred from Department 1. The ending inventory was 1,000 (1/2 converted) and 7,800 units were transferred to Department 3.

Required:
Prepare the August cost of production report for Department 2

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