With the information given how do I calculate the current cost conversion? Support2 DashboardProduct Cost Report-Weighted Average MethodReston Manufacturing Corporation produces a cosmetic product in three consecutive processes. The costs of Department 1 for May 2016 were as follows:Cost of beginning inventoryDirect material$14,700Conversion costs24,885Costs added in Department 1Direct material$443,100Direct labor447,825Manufacturing overhead304,695 1.195,620Department 1 handled the following units during May:Units in process, May 12,000Units started in Department 140,000Units transferred to Department 2 39,000Units in process, May 313,000On average, the May 1 units were 30% complete. The May 31 units were 60% complete. Materials are added at the beginning of the process, and conversion costs occur evenly throughout the process in Department 1. Reston uses the weighted average meprocess costing.RequiredPrepare the product cost report for Department 1 for May.Round average cost per equivalent unit to four decimal places. Use rounded answers for subsequent calculations. Round other answers to the nearest whole number.Reston Manufacturing Corporation Department 1Flow of Units and Equivalent Units Calculations, May 2016Equivalent Units% WorkDirect% WorkConversionDoneMaterialsDoneCostsComplete/Transferred39000100 % V39000 v100 % V390003000 v100 96 v300060 % v1800 vEnding Inventory4200040800 VTotal42000Product Cost ReportDirectConversionMaterialsCosts395851470024885 VBeginning Inventory443100 v1338750 xCurrent0 x $457800 vS0 xTotal Costs to Account For42000 v40800 v+ Total Equivalent Units10.9 $1212Average cost / Equivalent unit (round four decimal places)1/2120

Equivalent units of products concept came in to existence when some units are not fully completed at…

Answered: With the information given how do I…

Business

Accounting

With the information given how do I calculate the current cost conversion?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: How do you calculate contribution margin?

A: The contribution margin can be calculated by deducting the variable cost from the sales revenue.

Q: How I can calculate the gross margin?

A: Gross margin formula Sale-Cost of goods sold

Q: Define initial direct costs.

A: Initial direct cost: A cost that is incurred during the process of initiating the agreement of lease…

Q: How do i caculate the fixed cost

A: The objective of this question is to understand how to calculate the fixed cost in a business. Fixed…

Q: What is the standard cost income statement?

Q: Discuss what the contribution margin is and how it is used.

A: Contribution margin is an excess amount of selling price of a product over the variable costs. In…

Q: What is cost-plus pricing? Who uses it?

Q: What is meant by relevant costs and there use in making short-term decisions?

A: Cost refers to the amount of expenditure incurred by an individual or an entity in relation to goods…

Q: A total cost equation can be used to predict future costs for various activity levels. Write the…

A: Concept The total cost is the sum of variable cost and fixed cost incurred For example if variable…

Q: What is cost-plus pricing?

A: Cost plus pricing is a method in the cost accounting to fix the selling price of the product.

Q: Explain any one pros and cons of historical cost.

A: Historical cost is one of the four basic accounting principles. This method is used under Generally…

Q: What is the standard cost income statement? Give an example?

A: Meaning of Standard cost income statement:A standard cost is the estimated cost of production based…

Q: How can we determine the operating margin?

A: Operating margin refers to percentage of net operating income over the sales of the company.

Q: COSTING METHOD. 1. What is average cost method? 2. What is FIFO cost method?

A: Solution: 1. Average cost method: Average cost method is also known as weighted average method.…

Q: How is life-cycle-cost analysis useful?

A: Life Cycle Costing (LCC) is a process of accounting which is used by the owner or management of an…

Q: Please explain the calculation of Unit contribution

A: Unit Contribution margin is contribution margin earned per unit It is calculated in 2 ways Unit…

Q: Which costs make up “prime” costs？

A: Prime cost is that cost, which is directly concerned with the product such as direct material,…

Q: How can we calculate the Total Present Cost for the Base Case and Alternative?

A: The question is based on the concept of calculation of cost benefit analysis of base case and…

Q: Write the general formula for cost-plus pricing, and briefly explain its use.

A: Cost-plus pricing: It can be defined as the pricing strategy which includes the determination of the…

Q: he Thotho income statement variable costing

A: In variable costing income statement, the sale revenue is reduced by all the variable cost to arrive…

Q: Explain the arguments for and against using historical cost as a measurement base.

A: Historical Cost Accounting is a method of accounting in which the assets in the balance sheet are…

Q: How to calculate total prime cost

A: Meaning of Prime Cost: Prime costs are a firm's expenses directly related to the materials and labor…

Q: What is meant by the incremental cost of refinancing?

A: Refinancing refers to making change in the capital structure of the company by replacing the…

Q: Can you label revenue, loss, total costs, dollars, variable cost, and fixed cost on the provided…

A: Cost Volume Profit Analysis (CVP Analysis): This analysis is helpful in determining how any type of…

Q: Understand how fixedand variable costs behave andhow to use them to predictcosts.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Then, how about the fixed cost and the shipping cost?

A: Special Order: A non-routine or one-time sales order that falls beyond the typical parameters of a…

Q: Define sunk cost

A: Companies when making crucial decisions about their operations consider relevant costs i.e. costs…

Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

With the information given how do I calculate the current cost conversion?

Support
2 Dashboard
Product Cost Report-Weighted Average Method
Reston Manufacturing Corporation produces a cosmetic product in three consecutive processes. The costs of Department 1 for May 2016 were as follows:
Cost of beginning inventory
Direct material
$14,700
Conversion costs
24,885
Costs added in Department 1
Direct material
$443,100
Direct labor
447,825
Manufacturing overhead
304,695 1.195,620
Department 1 handled the following units during May:
Units in process, May 1
2,000
Units started in Department 1
40,000
Units transferred to Department 2 39,000
Units in process, May 31
3,000
On average, the May 1 units were 30% complete. The May 31 units were 60% complete. Materials are added at the beginning of the process, and conversion costs occur evenly throughout the process in Department 1. Reston uses the weighted average me
process costing.
Required
Prepare the product cost report for Department 1 for May.
Round average cost per equivalent unit to four decimal places. Use rounded answers for subsequent calculations. Round other answers to the nearest whole number.
Reston Manufacturing Corporation Department 1
Flow of Units and Equivalent Units Calculations, May 2016
Equivalent Units
% Work
Direct
% Work
Conversion
Done
Materials
Done
Costs
Complete/Transferred
39000
100 % V
39000 v
100 % V
39000
3000 v
100 96 v
3000
60 % v
1800 v
Ending Inventory
42000
40800 V
Total
42000
Product Cost Report
Direct
Conversion
Materials
Costs
39585
14700
24885 V
Beginning Inventory
443100 v
1338750 x
Current
0 x $
457800 vS
0 x
Total Costs to Account For
42000 v
40800 v
+ Total Equivalent Units
10.9 $
1212
Average cost / Equivalent unit (round four decimal places)
1/2120

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

What is an opportunity cost? How is this concept used in TVM analysis, and where is itshown on a time line? Is a single number used in all situations? Explain.
Define prime cost and conversion cost.
Please explain what is meant by the contribution margin. Also, please provide an example of how the contribution margin ratio is calculated and how the unit contribution margin is calculated.
What is the standard cost system?
Why do you use incremental cost analysis when picking alternatives and how do you constuct a choice table
What formula is used to calculate fixed cost and variable cost per unit? Explain with an example.
Follow up question: What is the total variable cost and what is the total cost formula?
Define Replacement cost.