To determine Prepare a production cost report for June for the Blending Department. Explanation Weighted average cost method: Weighted average cost method is the method to find out the equivalent units in the process costing . Under this method work done on all completed units taken as 100% whether these units are from beginning inventory or units introduced in the process. The work done on the ending inventory is calculated as per work done on it with respect to the completed units. Prepare a production cost report for June for the Blending Department. E Products Blending Department Production Cost Report Particulars Physical units Prior department Materials Conversion Beginning work-in-process inventory 9,000 Units started this period 116,000 Total units 125,000 Completed and transferred out Beginning work-in-process inventory 9,000 - - Started and currently completed 106,000 Total transferred out 115,000 115,000 115,000 115,000 Units in ending work-in-process inventory 10,000 10,000 10,000 (100%) 6,000 (60%) Total units 125,000 125,000 125,000 121,000 Table: (1) Compute the cost per equivalent unit of prior department, materials, labor and manufacturing overhead : Particulars Total Prior department Materials Conversion Costs in beginning work-in-process inventory $ 28,875 $ 10,540 $ 0 $ 18,335 Current period costs $ 1,077,725 $ 151,960 $ 387,500 $ 538,265 Total costs $ 1,106,600 $ 162,500 $ 387,500 $ 556,600 Cost per equivalent unit Prior department $ 1.30(1) Materials $ 3.10(2) Labor $ 4.60(3) Manufacturing overhead Table: (2) Compute the total cost of prior department, materials, labor and manufacturing overhead: Particulars Total Prior department Materials Conversion Costs accounted for: Costs assigned to units transferred out $ 1,035,000 $149,500 (4) $356,500 (5) $529,000 (6) Costs assigned to ending WIP inventory $ 71,600 $ 13,000 (7) $31,000 (8) $27,600 (9) Total costs accounted for $ 1,106,600 $ 162,500 $ 387,500 $ 556,600 Table: (3) Working note 1: Compute the cost per equivalent unit: Cost per equivalent unit = Current period costs Total units accounted for = $ 162 , 500 125 , 000 = $ 1.30 Working note 2: Compute the cost per equivalent unit: Cost per equivalent unit = Current period costs Total units accounted for = $ 387 , 500 125 , 000 = $ 3.10 Working note 3: Compute the cost per equivalent unit: Cost per equivalent unit = Current period costs Total units accounted for = $ 556 , 600 121 , 000 = $ 4

Fundamentals Of Cost Accounting (6th Edition)

6th Edition

ISBN: 9781259969478

Author: WILLIAM LANEN, Shannon Anderson, Michael Maher

Publisher: McGraw Hill Education

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Process Costing

Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.

Job Costing

Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing …

ABC Costing

Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In compari…

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Chapter 8, Problem 55P

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Fundamentals Of Cost Accounting (6th Edition)

Ch. 8 - What are the characteristics of industries most...Ch. 8 - A manufacturing company has records of its...Ch. 8 - If costs increase from one period to another, will...Ch. 8 - What are the five steps to follow when computing...Ch. 8 - What is the distinction between equivalent units...Ch. 8 - Which method, weighted-average or FIFO, better...Ch. 8 - It has been said that a prior departments costs...Ch. 8 - The more important individual unit costs are for...Ch. 8 - Assume that the number of units transferred out of...Ch. 8 - The management of a liquid cleaning product...

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