Prepare a statement of cost of goods manufactured for January 31, 2016.

Question

The Techno Chemicals Inc. uses a process costing system. During October, 2nd Department received 28,000 units from 1st Department at a total cost of $280,000. The costs added by 2nd Department during the month are: Conversion cost: $180,000 Materials: $24,000 During October, 2nd Department completed 16,000 units and transferred the same to finished goods store room. 10,000 units were still in process in 2nd Department at the end of the month. These units were estimated to be 60% complete with respect to conversion costs. Materials are added at the end of the process and identification of loss which take place at the end of process. Normal spoilage is expected to be only 5% of Units completed. Any spoilage more than 5% is considered as abnormal and is charged to factory overhead. Required: Prepare a cost of production report of 2nd Department of Techno Chemicals Inc.

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Chapter 5, Problem 12E

To determine

Prepare a statement of cost of goods manufactured for January 31, 2016.

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The Techno Chemicals Inc. uses a process costing system. During October, 2nd Department received 28,000 units from 1st Department at a total cost of $280,000. The costs added by 2nd Department during the month are: Conversion cost: $180,000 Materials: $24,000 During October, 2nd Department completed 16,000 units and transferred the same to finished goods store room. 10,000 units were still in process in 2nd Department at the end of the month. These units were estimated to be 60% complete with respect to conversion costs. Materials are added at the end of the process and identification of loss which take place at the end of process. Normal spoilage is expected to be only 5% of Units completed. Any spoilage more than 5% is considered as abnormal and is charged to factory overhead. Required: Prepare a cost of production report of 2nd Department of Techno Chemicals Inc.

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